The 50+ Market

5 steps to guide boomers to retirement

Fidelity Investments unveiled research that can help boomers close their estimated retirement income gaps.

• Adjust asset allocation  Twenty-one percent of those surveyed are invested too conservatively with limited exposure to stocks, based on their current age and planned retirement date. This highlights how many investors have improperly allocated their assets and are losing the long-term earnings potential of stocks.

• Increase savings  Respondents indicate they saved an average of $3,500 in 2011, but most are still not fully benefiting from the tax-advantaged/deferred savings potential of their workplace or individual retirement accounts. 

• Adjust retirement date  The average planned retirement age is 65, but delaying full retirement by a couple of years or continuing to work part-time can help preserve assets so they have a better chance of lasting through retirement. This tactic can be especially powerful for boomers, many of whom Fidelity found are facing a potential drop in retirement income.

• Annuitize retirement assets  Fewer than one-fifth (17 percent) of retirees are using an annuity to create a guaranteed lifetime income stream to cover essential expenses, but it can be an important tool to help ensure savings last through retirement–particularly if a retiree lives beyond his or her mid-80s.

• Tap into home equity  Seventy-two percent of respondents own a home and one-third (32 percent) of homeowners have no mortgage. Through downsizing and expense reduction, this home equity could be harnessed to generate income in retirement.

Source: Bill Coffin, LifeHealthPro.com

60% OF ADVISORS report their boomer clients say suffering another stock market decline is their top concern. Source: SEI Quick Poll