Less than one quarter of baby boomers are confident they will have enough savings to last throughout their retirement years, according to new research.
The Insured Retirement Institute unveils this finding in “Boomer Expectations for Retirement 2016.” Released during a conference call with reporters to open National Retirement Planning Week 2016 (April 11-15), IRI’s 6th annual update on boomers’ retirement preparedness is based on a survey of 800 Americans aged 53 to 69.
The 24 percent of boomers who express confidence in their retirement savings outlook is “the lowest level” since IRI began this research in 2011. In that first study, 37 percent of boomers expressed the same level of confidence.
Just 55 percent of boomers, the report notes, have saved for retirement. And more than 4 in 10 of those boomers with savings (42 percent) have saved less than $100,000, an amount that would generate less than $7,000 a year in retirement income. The survey notes also that one in five boomers are concerned they will not have enough savings to cover basic living expenses.
“Unfortunately most boomers are not taking important [retirement] planning steps,” says IRI President and CEO Cathy Weatherford. “Less than 40 percent have determined a savings goal, and just over a quarter are seeking help from a financial professional.
“Time is running out,” she adds. “Unless boomers begin to focus on their long-term needs now and commit to savings, they will need to work longer and make steep cutbacks to make ends meet in retirement.”
The study finds that boomers lacking confidence in their retirement security have some common regrets, with 68 percent wishing they had saved more and 67 percent wishing they started saving earlier. Other key findings from the report include:
Only 22 percent of boomers are confident with their preparations for retirement
27 percent are confident their savings with be sufficient to cover health care costs in retirement. And only 16 percent are confident they can cover the cost of long-term care.
During the past year, 30 percent of boomers postponed their plans to retirement. About six in 10 boomers (59 percent) now plan to retire at age 65 or later. This includes 26 percent who plan to retire at age 70 or later.
If their financial resources become exhausted in retirement, 71 percent will try to cut back to rely only on Social Security. And 54 percent say they will try to return to work if able.
3 in 10 boomers stopped contributing to a retirement account. And 16 percent of boomers took premature withdrawals from their retirement accounts.
Nearly 6 in 10 boomers (59 percent) expect Social Security to be a major source of income in retirement, up from 43 percent in 2014.
6 in 10 boomers believe their retirement income will cover basic expenses as well as some for travel and leisure activities.
Only 46 percent of boomers believe it is important to leave money to heirs, down from a high of 67 percent in 2013.