WASHINGTON, D.C. –The Insured Retirement Institute (IRI) on Monday released a new research report that found Baby Boomers’ confidence in having sufficient savings to last throughout retirement has dropped to a five-year low.
The report was released during a conference call with reporters to open National Retirement Planning Week® 2015. The annual campaign promotes and encourages comprehensive retirement planning.
Declining each year since 2011, the first year this study was conducted, the report found only 27% of Boomers are highly confident their savings will last. Despite the drop in confidence, 44% of Boomers expect their financial situation to improve during the next five years, up from 32% in 2012.
“These numbers suggest that uncertainty is creeping in, and more Baby Boomers are doubting their ability to make their savings last,” IRI President and CEO Cathy Weatherford said. “Many Boomers have witnessed their last payday or are quickly approaching the day their final paycheck arrives. Even with financial outlooks improving, there appears to be some second-guessing when it comes to their retirement security and making ends meet. Unfortunately, the reality is few Boomers can be absolutely certain their savings can last 20 to 30 years in retirement.”
Other key findings from the report:
· During the past year, nearly a quarter of Boomers reported experiencing difficulties paying their rent or mortgage, and 19% stopped contributing to a retirement account.
· Only 19% of Boomers have $250,000 or more saved for retirement, while 4 in 10 Boomers report having no savings for retirement.
· In the past year, 24% of Boomers postponed their plans to retire. About 3 in 10 Boomers, 28%, expect to retire at age 70 or later. In 2011, only 17% of Boomers expected to retire at age 70 and beyond.
· A quarter of Boomers are confident in their financial preparations for retirement, 28% believe they will have sufficient savings to cover medical expenses in retirement, and only 19% believe they will be able to cover any long-term care needs.
· More than half of Boomers (55%) expect to budget income in retirement for travel and leisure activities. Among Boomers with less than $250,000 dollars saved for retirement, 40% expect to budget retirement income for these activities.
· Nearly 6 in 10 Boomers (58%) have made no preparations to plan for future cognitive issues. Among those that have, the most common preparations include documenting financial affairs and recording their wishes.
· Boomers who own annuities are more likely, by more than two-fold, to be highly confident that their savings will last throughout retirement, compared to Boomers without an annuity.
· Nearly 9 in 10 (86%) of Boomers who plan for retirement with the help of a financial professional say they are better prepared as a result of their advisor’s help.
The IRI study is based on a survey of 803 Americans aged 52 to 68. The entire report, “Boomer Expectations for Retirement 2015,” is available HERE.
About National Retirement Planning Week® 2015: National Retirement Planning Week® 2015 takes place from April 13 to 17. National Retirement Planning Week® and other coalition activities will demonstrate that it is possible to “Retire On Your Terms” if comprehensive retirement plans are properly developed and managed. To support these education efforts, the coalition has collected the latest resources to help consumers and financial professionals focus on long-term financial goals. These tools are available at: www.retireonyourterms.org.
About the Insured Retirement Institute: The Insured Retirement Institute (IRI) is the leading association for the retirement income industry. IRI proudly leads a national consumer coalition of more than 30 organizations, and is the only association that represents the entire supply chain of insured retirement strategies. IRI members are the major insurers, asset managers, broker-dealers/distributors, and 150,000 financial professionals. As a not-for-profit organization, IRI provides an objective forum for communication and education, and advocates for the sustainable retirement solutions Americans need to help achieve a secure and dignified retirement. Learn more at www.irionline.org.
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