When it comes to money, the baby boomer generation is woefully underprepared for their golden years. And according to a recent study, Boomer Expectations for Retirement 2016, from the Insured Retirement Institute (IRI), time is of the essence when it comes to helping this group implement a comprehensive plan to get its finances in order.

The IRI research shows that a majority of baby boomers (76 percent) aren’t confident their savings will last through retirement — the lowest level of confidence ever shown over the six years the annual study has been conducted. Just over half (55 percent) of boomers have put money away for retirement, and only 42 percent of those with retirement accounts have saved less than $100,000 — which would generate less than $7,000 in retirement income. One in five boomers is concerned they won’t have enough savings to cover even basic living expenses. Thirty percent of boomers stopped contributing to a retirement account, and 16 percent have already taken premature withdrawals from their retirement accounts.

“The road to a confident financial future begins with developing a holistic retirement plan,” said Cathy Weatherford, IRI president and CEO. “Unfortunately, most boomers are not taking important planning steps. 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. 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.”

Even as they age into their ’60s, boomers will face more years in the workforce. During the past year, 30 percent of boomers postponed their retirement plans, with 59 percent looking to retire at age 65 or older.

Boomers benefit from advisors

Individuals who work with professional advisors are in better financial shape than those who don’t have professional help, says the IRI study. More than eight in 10 boomers who work with an advisor say they are better prepared for retirement as a result. More than two-thirds (68 percent) of boomers who own annuities and 78 percent of boomers who work with financial professionals have at least $100,000 saved for retirement. Those who don’t work with advisors are more likely than ever to say they have nothing saved for retirement. Boomers typically contact their advisors for three main reasons, according to the IRI report:

  1. For help and advice
  2. To tap into their expertise
  3. Knowledge and the action of actually investing

In general, it’s best to meet with members of this generation. The IRI study says that a majority – 62 percent – of baby boomers prefer to interact with their financial professionals in person, while 14 percent prefer email contact, and another 11 percent like to communicate with their advisors by phone. Not surprisingly, traditional advisors aren’t in much danger of being replaced with machines: Only 13 percent of baby boomers say they are very or somewhat likely to use a “robo-advisor.”

The FIA connection

Advisors can stand out in their marketplace by understanding the specific needs and financial concerns of this group. They worry that their money won’t be safe, that they will outlive their assets, and that they won’t have anything left to pass along to heirs.

Fixed indexed annuities (FIAs) can be an ideal fit with baby boomers since they offer no risk of losing principal invested, provide lifetime income withdrawals, include guaranteed income with a fixed interest crediting strategy, and have either a death benefit or the option to receive any remaining contract value. FIAs also offer tax-deferred interest accumulation and the potential for growth linked to the performance of an external market index. Stressing these FIA attributes can not only meet baby boomers’ needs, but can result in sales, as well.