A new study by MetLife finds that both groups of boomers–the younger set and the older one–are still not saving enough. The study, Boomer Bookends: Insights Into the Oldest and Youngest Boomers, examined the baby boomers who turned 62 last year as well as the Youngest Boomers, those now turning 45, and found that 46% of the older set and 57% of the younger ones are falling short in saving for their retirement.
The study was conducted on behalf of the MetLife Mature Market Institute during October 2008 as a follow-up to the study Boomers Ready to Launch, which was released in 2007. That study consisted of a telephone survey of 1,000 participants aged 61 who consented to be re-contacted for the follow-up survey.
The Boomer Bookends study found that in the group born in 1946–some 2.7 million Americans–about one in five have delayed collecting Social Security, and few have fully retired (19%). Only 13% have saved fully for their retirement and another 25% say they are on track to do so; a leading concern is affordable health care, the study reports. About two-thirds of the Oldest Boomers remain in the work force, 50% full-time. Almost six in 10 have provided financial assistance to their children and grandchildren, perhaps putting their own plans at risk. The study also found an “unexplained contradiction”–that a large portion (24%) say they have no concerns about retirement, across income levels.
When looking at the younger group, 4.6 million people born in 1964, many of them would rather be described as Generation X than baby boomer and say they will consider themselves “old” at age 71, the study found. Their Older Boomer counterparts say 78 is “old.”
The younger boomers “want to retire by age 64, but believe they will not be able to do so until age 65, though they will not be eligible for full Social Security retirement benefits until they are 67,” the study notes. “Only 36% say their retirement savings plans are on schedule and a good deal express concern about outliving their money. This group will not rely on defined benefit pensions for their retirement income like the Oldest Boomers; they expect to depend largely on the funds in their 401(k)s. Social Security still plays an important financial role for both groups,” the study says.
Sandra Timmerman, director of the MetLife Mature Market Institute, says that while the older group is behind on retirement saving and many are delaying both Social Security and retirement, the economic downturn “has impacted the Oldest Boomers, who have fewer years to recover financially, and points to the need for the younger group to build a financial safety net as they look ahead to their retirement.”
In MetLife’s comparison between the Oldest Boomers first contacted in 2007 and re-contacted late last year, Timmerman says, “we found that there are many consistencies, but not when it comes to retirement.” The Oldest Boomers “continue to rate their health as good; they have remained in their own homes, and they continue caring for their aging parents. However, only 15% of those who said in 2007 that they would retire in 2008 actually did.”