As They Near Retirement, Baby Boomers Remain Unprepared
Annual Study Released by the Insured Retirement Institute Shows That 42 Percent of Boomers Have No Retirement Savings
WASHINGTON, D.C. – APRIL 9, 2018 — Baby boomers – even the youngest of whom are just a decade or so away from retirement age – are in large measure unprepared for retirement, having failed both to plan adequately and save enough, according to a study released today by the Insured Retirement Institute, in conjunction with National Retirement Planning Week.
According to the study, 42 percent of baby boomers have nothing saved for retirement. Among boomers who do have retirement savings, 38 percent have less than $100,000 saved for retirement. Further, only 38 percent have calculated the amount they will need to retire. However, 79 percent of boomers who work with financial professionals have at least $100,000 saved for retirement.
Only 25 percent of boomers believe that they will have enough money in retirement, and only 28 percent believe they are doing (or did) a good job financially preparing for retirement. While a growing number (25 percent, up from 20 percent in 2017) plan to retire earlier than age 65, 29 percent expect to work past age 70.
Forty-six percent of boomers expect they will need $45,000 (in current dollars) or more in annual retirement income. Assuming the current average Social Security benefit of $16,848, an individual would need to generate at least $28,152 in additional annual income from a combination of pension benefits and retirement savings. At current rates, a life annuity paying $28,152 in annual guaranteed lifetime income would cost approximately $430,000, far more than most Boomers have saved.
“Many Americans are simply not financially prepared for retirement,” said Cathy Weatherford, President and CEO of the Insured Retirement Institute. “This is especially worrisome for Baby Boomers, a generation whose oldest members are past 70 and whose youngest will turn 65 in just over a decade. Those who have not adequately prepared for a life without regular paychecks from employment must educate themselves, plan adequately, save as much as possible and consult financial professionals to create effective and realistic retirement strategies.”
Baby boomers began reaching age 65 in 2011, 26 million so far and another 50 million will turn 65 over the next 10 years.
Boomer Expectations for Retirement 2018 is based on a survey of individuals broadly defined as members of the Baby Boomer Generation. The research was conducted by means of internet interviews with 806 Americans ages 55 to 71. Data were weighted by age and gender to the 2016 American Community Survey. Data was collected from March 13 through March 16, 2018. The margin of error for the sample of 806 was ± 3.5%.
See a PDF version of the full research report.