IRI Study: Retirement Planning Indicators Show Many Could Be Jeopardizing Financial Security

WASHINGTON, D.C. - The Insured Retirement Institute (IRI) today released a new research report detailing--based on several common retirement planning indicators--how a financially secure retirement could be slipping away from significant numbers of Baby Boomers and Generation Xers. The report found that significant portions of these demographic groups have insufficient savings, lack investment knowledge, and have not taken important retirement planning steps such as calculating a retirement savings goal or consulting with a financial professional. 

"The good news is that when we dug deeper, we found that those who are working with a financial advisor and those who have determined how much savings they will need for retirement are more confident in having a financially secure retirement," IRI President and CEO Cathy Weatherford said. "But on the flip side, those who are not taking these retirement planning steps are lacking this confidence, and unfortunately, this includes many Baby Boomers and Gen Xers. And when you consider how many Baby Boomers and Gen Xers have low levels of savings or haven't saved at all, it presents a rather gloomy future for a significant number of Americans."

Regarding retirement savings, 21.7 percent of Baby Boomers and 27.8 percent of Generation Xers have no retirement savings. Of those who have saved and indicated their savings levels, nearly 40 percent of Baby Boomers and about two-thirds of Generation Xers have less than $100,000 saved for retirement.

Knowledge of investing also is an important measure of retirement planning competency as the majority of accumulated savings tends to be from investing earnings, assuming a career-long savings record. Regarding their knowledge of investment, 40.8 percent of Baby Boomers and 45.1 percent of Generation Xers reported that they are "not very" or "not at all" knowledgeable about investing in securities.

The report also found that:

• Only 51.4 percent of Baby Boomers and 40.7 percent of Generation Xers have calculated how much they will need to save for retirement.
• 52.8 percent of Baby Boomers and 62.5 percent of Generations Xers have not consulted a financial advisor.
• Annuity owners have more confidence in their ability to live comfortably throughout retirement as 53.4 percent of Baby Boomer and 49.4 percent of Generation X annuity owners are extremely or very confident compared to 31 percent of Baby Boomer and 31.2 percent of Generation X non-owners.
• Baby Boomer and Generation X annuity owners are more likely to engage in positive retirement planning behaviors. Of Baby Boomers, 73.7 percent of annuity owners consulted a financial advisor and 69.6 calculated their retirement savings needs compared to 34.8 percent and 44.3 percent of non-owners, respectively. For Generation Xers, 62.3 percent of annuity owners consulted a financial advisor and 60.4 calculated their retirement savings needs compared to 29.7 percent and 34.0 percent of non-owners, respectively.

The full report can be found HERE.

About the Insured Retirement Institute: The Insured Retirement Institute (IRI) is a not-for-profit organization that for twenty years has been a mainstay of service, commitment and collaboration within the insured retirement industry.  Today, IRI is considered to be the authoritative source of all things pertaining to annuities, insured retirement strategies and retirement planning. IRI proudly leads a national consumer education coalition of nearly twenty organizations and is the only association that represents the entire supply chain of insured retirement strategies: Our members are the major insurers, asset managers, broker dealers, and more than 150,000 financial professionals. IRI exists to vigorously promote consumer confidence in the value and viability of insured retirement strategies, bringing together the interests of the industry, financial advisors and consumers under one umbrella. IRI's mission is to: encourage industry adherence to highest ethical principles; promote better understanding of the insured retirement value proposition; develop and promote best practice standards to improve value delivery; and advocate before public policy makers on critical issues affecting insured retirement strategies and the consumers that rely on their guarantees. Visit www.IRIonline.org today to experience the vast resources of the Insured Retirement Institute for yourself.     

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