January 20, 2018

Boomers: This is for You!

Bank of America HeadshotsBoomers–this is for you!

A recent report by the Bankers Life Center for a Secure Retirement found that 8 in 10 boomers don’t know the amount of pre-retirement income they would feel comfortable living on into their golden years. Seven in 10 boomers surveyed said they “do not have or do not know” whether they’ll have the funds to make ends meet in retirement to age 85 (the average life expectancy of a retiring 65-year-old boomer). The figure rises to an eye-popping 83% of respondents when asked if they can comfortably finance retirement needs to age 95.

The lack of retirement preparedness reflects a more troubling issue. The fact that large numbers of working-age boomers are struggling financially. And often putting their nest egg on the back-burner to meet expenses today. Consider this: Six in 10 of the pre-retirees polled by Bankers Life are spending “as much or more” than they earn in income. And 4 in 10 have had to revise budget priorities to compensate for an inadequate nest egg.

The report notes that Survey respondents who work with a financial advisor are better prepared to fund retirement needs and experience “less financial anxiety.”  The report also notes that the components of a retirement plan (developing a budget to cover living expenses, identifying lifestyle goals, and pegging savings to an amount needed to fulfill those objectives) will induce boomers to be more disciplined with their finances and, thus, to reduce expenses.

Despite their stated familiarity with common types of retirement accounts, boomers are not yet doing enough to plan for their own retirement. Only six in 10 boomers (including those who have already retired) have done any active retirement planning beyond contributions to a retirement or savings account.

Steve Geist teaches 3 classes at CFU to help you solve the Retirement Puzzle.