No matter what generation consumers fall into, they struggle to know how much they need to save for retirement, according to a LIMRA study released today at The Retirement Conference, being held in Arlington, VA.
Millennials are the most clueless demographic with only 30 percent of them knowing how much they should be saving. Boomers and Generation X aren’t much better with only 40 percent of folks having a clue about their savings needs.
“Not surprisingly, our study found that the majority of Americans — no matter their generation — are not confident that they will be able to achieve the retirement lifestyle they desire,” said Cecilia Shiner, associate research director, LIMRA Secure Retirement Institute. “If consumers aren’t confident that they are doing the basics correctly — like saving enough for retirement — it is unlikely that they will be confident of their retirement prospects.”
According to Shiner, most people will live at least 30 years in retirement. “With 7 in 10 pre-retirees reporting that their social security and pensions will not cover their basic living expenses, it is concerning that more than half of boomers have less than $100,000 saved for retirement and more than a third have less than $25,000 saved for retirement,” he said.
The news doesn’t get better. According to the LIMRA report, “Only 1 in 10 American workers report being very knowledgeable about investments or financial products. Boomers and Gen X consumers were more likely to feel somewhat knowledgeable (51 percent and 46 percent, respectively) while more Millennials describe themselves as not very or not at all knowledgeable (49 percent).”
The boomers who are getting close to retiring, if they haven’t retired already, are particularly at risk and most in need of advice from financial experts. “Our research shows only 30 percent of Boomers have a retirement plan – and only a third of them say it is a formal one,” said Shiner. “Working with a financial professional to develop a retirement plan would likely improve preparedness and confidence for retirement.”