A report released Thursday by TD Ameritrade looked at the difference between boomers who are prepared for retirement and those who are not. What it comes down to, according to the report, is to start saving before age 30 and talk to your children about finances and money management to keep them on track as well.
Prepared boomers were more likely to save for retirement by 20 percentage points, the report found, and they started saving at a younger age than unprepared boomers. The median age at which prepared boomers began saving was 30, compared with 35 for unprepared boomers.
Prepared boomers may also have had advantages unprepared boomers didn’t. The survey found prepared boomers were more likely to have family members that could help with financial obligations like paying for college or a new home, and had lower health care costs on average.
Those influences had a greater impact on boomers’ retirement preparedness than more obvious factors like education and income. However, their parents’ influence had a dramatic effect on boomers’ preparedness. Less than 30% of unprepared boomers said their parents talked to them about money management and saving for retirement, compared with 42% of prepared boomers.
Over half of prepared boomers are generally conservative with their money, even in good financial times, compared with just 35% of unprepared boomers. Prepared boomers, unsurprisingly, tend to be more patient as well, and plan carefully (53%), compared with 38% of unprepared boomers.
Respondents were asked to identify themselves as prepared or unprepared based on how they felt about their retirement prospects.