More than 7 in 10 baby boomers believe they’re financially prepared for retirement, new research shows.
That’s the word from TD Ameritrade Inc., which unveiled this finding in a new report, “2012 Baby Boomers: What Separates those who are financially prepared for retirement from those who are not?” Conducted last October by Head Research, the survey polled 2,000 boomers about their attitudes toward planning and saving for retirement, their financial knowledge and behaviors and influences on retirement preparedness.
The report indicates that 71 percent of boomers feel financially prepared for retirement. A higher percentage of boomers who are semi or fully retired (84 percent) feel prepared — 20 percent more than those who are not yet retired (64 percent).
The report notes that 45 percent of boomers in the U.S. plan to retire at some age. Nearly a quarter (23 percent) don’t know when they’ll be able to retire. And 13 percent want to retire, but are prevented from doing so due to financial needs.
Most boomers who are not yet retired (87 percent) think they will have to work until more than 60 years of age (median age = 62).
More than 9 in 10 (92 percent) of surveyed boomers believe they will have to work until they are more than 60 years old; however, about half (51 percent) will stop working by age 55, resulting in 6 fewer years of employment (on average) than they believe they will have.
The report reveals that a clear majority of boomers (84 percent) who are not retired say they will require less than $100,000 in income annually to live “comfortably” (median = $82,350 per year). But significantly more prepared boomers (18 percent) believe they will need more than $100,000 per year to live comfortably.
The report also discloses these findings:
Almost half of non-retired boomers (46 percent) don’t know how much they must save to have a comfortable retirement income.
Fewer unprepared boomers believe their savings will come primarily from their own savings and investments (66 percent compared to 89 percent of prepared individuals).
The median amount that boomers have saved for retirement ($275,000) is far below what they believe they’ll need ($750,000).
One quarter of boomers (26 percent) who are not yet retired believe they will be able to live comfortably without Social Security.
Nearly half (46 percent) of retired/unprepared boomers say they should have reduced discretionary spending to ensure they had enough in savings to meet daily living expenses.