Baby Boomers, born between 1946 and 1964, are heading into retirement in droves—but are Baby Boomers ready for retirement?
According to the Bankers Life Center for a Secure Retirement Middle-Income Retirement Preparedness Study, almost two in three (63%) average middle-class income Americans age 55 to 75 are unsure if they have saved enough to live comfortably in retirement.
While unfortunate, this statistic isn’t completely surprising. It can be challenging to meet daily financial obligations and fund college for children while saving for retirement on an average middle-class income. What income is considered middle class? According to Investopedia, the middle-class income range is between $40,500 and $122,000.*
Despite the fact that many Baby Boomers have questionable retirement preparedness, more than half (54%) of middle-income Americans age 55 to 75 do not receive professional retirement guidance of any kind. Why aren’t unprepared Baby Boomers seeking professional help? Analysis of the Middle-Income Retirement Preparedness Study finds that three misconceptions about professional financial services may be keeping middle-income retirees and pre-retirees from seeking this guidance.
This study explores the use, access and attitudes of middle-income retirees and pre-retirees toward planning for and managing their lives in retirement. It shares the percent of Baby Boomers ready for retirement through retirement preparedness statistics. It may also help you reflect on your own financial situation and answer the questions, “Am I financially ready for retirement?” and “Should I get a financial advisor?”
*Investopedia, What Income Class Are You?, https://www.investopedia.com/financial-edge/0912/which-income-class-are-you.aspx, February 23, 2019.
Here’s one of the study’s most startling retirement preparedness statistics: Almost two in three (63%) middle-income Americans age 55 to 75 are unsure if they have saved enough to live comfortably in retirement.
More than half (54%) of middle-income retirees and pre-retirees do not receive professional retirement guidance of any kind.
Fifty-one percent (51%) of respondents had not been contacted by any kind of retirement professional in the past 12 months.
Eighty-four percent (84%) of those surveyed who do work with a professional indicated that they reached out to their advisor first, not the other way around.
Of middle-income retirees and pre-retirees not working with a professional advisor, 84% do not think they need one. The three reasons most often given for this are:
- I can do it myself (47%)
- I don't have enough assets (37%)
- It's too expensive (23%)
Of all middle-income retirees and pre-retirees surveyed, 30% spend no time at all researching or investigating retirement planning opportunities; two out of three (61%) spend less than one hour per month.
Although those without an advisor enjoy planning, 63% spend less than one hour per month on retirement planning compared to 58% of those with an advisor. Over one-third (36%) of those without an advisor spend no time at all doing this research.
Many of those not working with a professional advisor feel it is too expensive; however, one-third (32%) do not know how much this service costs.
Many of those not working with a professional advisor feel they do not have enough assets for a retirement professional to want to meet with them; however, one-fifth (20%) do not know the asset minimum needed.
Two in three (68%) middle-income retirees and pre-retirees who work with a professional advisor feel better prepared for retirement than their peers do.
Only 14% of respondents working with an advisor do not think they have saved enough money to live comfortably in retirement, whereas one-third (34%) of those surveyed without a professional advisor have this concern.