Nine in 10 baby boomers who are former members of the U.S. military say they are confident that their lifestyle in retirement will be everything they’ve hoped for, according to a survey released Tuesday by Charles Schwab.
Eighty-seven percent of survey participants anticipate that their quality of life in retirement should be better than that of their parents, and 84% expect it to be better than that of their children.
The online survey included 416 veterans, who are between 55 and 75 and have at least $100,000 in investable assets. It was conducted by Logica Research from Aug. 20 to Sept. 4.
Boomer veterans also are ready to make the most of their retirement, the survey found, with 63% saying they want to spend their money rather than leave an inheritance for their children.
On average, boomer veterans surveyed have accumulated $980,000 in retirement savings, including assets in 401(k)s, other workplace retirement accounts and IRAs. Eighty-six percent believe their savings should allow to live out a comfortable retirement.
Although this amount seems ample, the survey respondents also believe that they will need $130,000 per year on average to live their best life in retirement.
“Military service members are trained to be confident and disciplined, and for those in our survey, it seems that carries over into their finances,” Danielle Munoz, vice president and leader of Charles Schwab’s virtual branch network, said in a statement.
“But we also know many Americans, including active duty military and veterans, often live paycheck to paycheck, which can make the idea of retirement even more overwhelming. That’s why it’s important for everyone to put pen to paper,” Munoz explained.
Having a basic plan in writing, she said, can help boomer veterans ensure that the math adds up between their savings and other potential sources of income like Social Security or even a military pension.
Munoz and her team joined Schwab as part of its USAA acquisition, which closed earlier this year.
Virus Influences Priorities
Despite an ongoing global pandemic, Schwab’s survey finds that 76% of boomer veterans’ lifestyle priorities in retirement remain the same as before the onset of the pandemic:
- Stay fit and healthy – 97%
- Spend time with family – 95%
- Spend time at home – 93%
Eighteen percent of survey respondents report that they or their spouse have taken a financial hit due to the pandemic, through a salary cut or reduced hours, by being laid off or furloughed, or by having to retire earlier than planned.
Still, only 4% of boomer veterans say they have withdrawn money from retirement accounts owing to the coronavirus.
Although most boomer veterans state they either have not lost much of their retirement savings during the March market slide or that their portfolio has since recovered, 54% worry about future market volatility affecting their retirement plans — more so that about the presidential election and the ongoing pandemic.
Developing a Written Plan
Schwab’s survey finds that boomer veterans have laid the groundwork for financial preparedness early. Thirty-four percent say they began saving for retirement in their 20s, while 36% started in their 30s.
A fifth waited until their 40s, 8% until their 50s, and 1% until their 60s and up.
Half of boomers surveyed believe the coronavirus has made them more focused on developing a clear financial plan for retirement.
But boomers can do better in planning for retirement, Schwab said. Only 39% have a written plan to help them achieve their financial goals in retirement. Fifty-eight percent state they’ve saved for their goals but not yet put their plan in writing.
“A written plan can help smooth the transition from saving for retirement to living off your savings and help ensure that your portfolio can go the distance,” said Munoz. “A plan can help you understand your strategy for withdrawals and how they can work with other sources of income as well as your tax situation.”
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