Baby Boomers are retiring in droves, yet retirement looks vastly different for Baby Boomers than it did for their parents and grandparents. In fact, two-thirds of middle-income Boomers say their retirement will be different from that of previous generations.
Previous generations found financial security in retirement through pensions and guaranteed income. However, with pensions largely a thing of the past, Boomers are having to create their own financial security by funding their own retirements.
Unfortunately, many Boomers are woefully unprepared for retirement. Half (52%) of middle-income Boomers are not confident that they have saved enough to live comfortably in retirement, and thirty-eight percent (38%) are only somewhat confident. Only one in ten (10%) feel confident about the adequacy of their retirement savings.
So how are Boomers facing their retirement challenges? Many Boomers plan on relying on Social Security for financial security in retirement; however, Social Security isn’t meant to be a retiree’s sole retirement plan and financial security.
Other Boomers who are unsure about their financial post retirement readiness end up working after retirement. However, for many Boomers, working in retirement looks a lot different than their career years. Many boomers who are working during retirement are cutting back to part-time, turning hobbies into careers, doing consulting work or are taking advantage of the gig economy.
This new study from Bankers Life and Casualty Company Center for a Secure Retirement reports findings on Boomers’ view of retirement and the impact of the economic downturn on their retirement financial security. This study is a great read if you find yourself wondering, “Am I financially ready for retirement?”
Two-thirds (67%) of middle-income Boomers say their retirement will be different from that of previous generations; the ideas of being taken care of by family, slowing down and moving to a retirement community (associated with the retirement of previous generations) are being replaced with an active lifestyle and work.
More than half (55%) of middle-income Boomers are looking forward to retiring. However, one in four (28%) are still uncertain.
Three out of four (73%) middle-income Americans age 47 to 65 say that their financial situation, not age, is now the key indicator for when to retire.
Financial security in retirement through pensions and guaranteed income are what sixty percent (60%) of middle-income Boomers envy most about the retirement of previous generations.
Three out of four (75%) middle-income Boomers plan on working after retirement; more than half (57%) of those expect they will be going back to work after retirement for financial reasons.
Two-thirds (67%) of middle-income Boomers feel they are behind where they expected to be at this point in their lives in terms of financial security and readiness for retirement.
Half (52%) of middle-income Boomers are not confident in their financial readiness that they have saved enough to live comfortably in retirement, and thirty-eight percent (38%) are only somewhat confident. Only one in ten (10%) feel confident about the adequacy of their retirement savings.
One-seventh (14%) of middle-income Americans age 47 to 65 do not have a pension, 401(k), IRA or any other type of retirement savings account.
More than half of middle-income Boomers (55%) have saved less than $100,000 for retirement. One-fifth (19%) have saved less than $10,000.
Uncovered healthcare expenses (80%), inflation (79%) and living longer than their money lasts (71%) are the top three financial security concerns that middle-income Boomers have about retirement.
Two out of three (68%) middle-income Americans age 47 to 65 have experienced a decline in the value of their retirement accounts since 2008; one-third (30%) of those have not seen any rebound in value as of March 2011.
Two-thirds (64%) of middle-income Boomers have taken action to reduce their healthcare expenses, including holding off going to the doctor (55%), postponing an elective surgery (26%) or changing to a less-expensive healthcare plan (25%).
Three-quarters (73%) of middle-income Boomers say the turbulent economy has caused their retirement timing expectations to change; seventy-nine percent (79%) of those are delaying their retirement, by five years on average.