Retirement is looming for the “transition boomers”—those ages 55 to 65—but a third of them are unsure how much they will need to cover their basic living expenses, according to the Transition Boomers and Retirement Income Survey from Allianz Life Insurance Co.
The survey also found that one-quarter appear to be uninformed about the effects of inflation and more than 40% may not have a realistic idea of when to start planning.
“It’s alarming that so many boomers on the cusp of retirement are still unclear about the basic factors which determine their ability to fund their lifestyle once they stop working,” Allianz Life President and CEO Walter White said in a statement. “When you consider rising health care costs and the devastating effects of inflation on purchasing power, the fact that so many transition boomers are still confused about retirement income planning is a significant issue which urgently demands more education. Allianz Life developed a new planning framework, the Four C’s of Successful Retirement Income Strategies, specifically to help boomers tackle these challenges.”
Of the one-third of transition boomers who indicated uncertainty about their retirement income needs, 64% were ages 55 to 60 and more than one-third (36%) were between 61 and 65. When asked about their biggest concerns in retirement, 28% of transition boomers cited “not being able to cover basic living expenses.”
While health care costs ranked as the biggest retirement concern at 32%, only 10% of respondents picked keeping up with inflation and only 6% called taxes in retirement as a top concern.
To illustrate the threat inflation poses to retirees, respondents were asked to predict the cost of a loaf of bread in 2022 (based on today’s average price of $2.50). While 75% predicted the cost would double to $5 in 10 years, 25% showed unfamiliarity with inflation and the effect it can have on purchasing power in retirement.