If you could go back in time and fix some of the things you’ve come to regret in life, what would you change? Would you choose a different major in college? Not buy the car that turned out to be a lemon? Take a vacation you didn’t take because you thought you were too busy? Would you save more for retirement?
Recent data from the Insured Retirement Institute found that only 24 percent of baby boomers believe they will have enough money throughout retirement and only 22 percent believe they have done a good job of preparing for retirement. Of those, 68 percent wish they had saved more money for retirement and 67 percent wish they had started saving earlier. These figures reveal a growing lack of confidence. This generation is unsure they will have the financial resources available to see them through their retirement years.
One of the more prevalent and interesting statistics I’ve come across in my first month at Retirement Advisor is that 10,000 baby boomers reach retirement age every day. At first, I was somewhat taken aback by that statistic. (Most journalists are confounded by numbers.) That’s a lot of people going through a substantial change in their lives every single day.
But that’s also a lot of people entering their retirement with fear, and probably regrets, about their financial situation every day. A large portion of the boomer population had the misfortune of seeing the investments that made up their nest egg suffer during the 2008 recession without enough time to recover before retirement. To make matters worse, many boomers lost their jobs during the recession or were forced into an unplanned, early retirement as a result of corporate downsizing tied to the economy.
While the economy has bounced back in recent years, many boomers have not. IRI’s survey found a growing number of boomers have stopped contributing to retirement accounts (30 percent), have found it more difficult to pay their mortgage or rent (30 percent) and have taken premature withdrawals (16 percent) than in recent years. For an increasing number of boomers, Social Security is their primary plan for retirement income.
The report demonstrates other areas of concern. Only 27 percent of boomers think they have enough money to pay for health care expenses and only 16 percent believe they have enough money saved to pay for long-term care — expenses that are a reality for an aging population.
The good news for boomers who have worked with a financial advisor is that while their confidence may have taken a hit, their actual preparedness is solid. Nine in 10 boomers who have worked with an advisor reported they have retirement savings, compared with 42 percent of those who haven’t, according to IRI’s data.