A report finds that baby boomers’ confidence with their own retirement plans continues to decline, a trend dating back to 2011.
The Insured Retirement Institute (IRI) report shows that the percentage of American boomers showing high levels of confidence in their financial preparations for retirement dropped to 35% from 44%.
But while confidence continues to slip, IRI found slight improvements in several important measures, including the percentage of boomers with retirement savings, their total savings, as well as the number of boomers with a retirement savings goal and a planned retirement age.
“One of the most striking developments since we began this research series is the decline in boomers who did not know when they would retire,” says IRI president and CEO Cathy Weatherford. “That number has been cut in half. While the research shows that they are deciding to retire later in life, the important thing is that they are grappling with important aspects of retirement planning and beginning to develop a clearer picture of where they are and where they intend to be.”
While boomers’ current economic outlook has also soured, they are beginning to show optimism that their financial situation will improve, with 42% of boomers expecting things to improve in five years, compared with 33% of boomers who shared this view in 2013.
Other key findings from the report include the following:
- One-quarter of boomers postponed their plans to retire during the past year.
- Twenty-eight percent of boomers plan to retire at age 70 or later.
- One in 10 boomers prematurely withdrew savings from a retirement plan during the past year.
- Eighty percent of boomers have retirement savings.
- About one-half of boomers with retirement savings have US$250,000 or more saved for retirement.
- Fifty-five percent of boomers have calculated a retirement savings goal, up from 50% in 2013.
- Of those calculating a retirement savings goal, 76% are factoring in the cost of healthcare.
- Three in four boomers say tax deferral is an important feature of a retirement investment.
- Nearly 40% of boomers would be less likely to save for retirement if tax incentives for retirement savings, such as tax deferral, were reduced or eliminated.
- Boomers planning for retirement with the help of a financial advisor are more than twice as likely to be highly confident in their retirement plans compared to those planning for retirement on their own.
The IRI study is based on a survey of 800 Americans ages 51 to 67.
Related articles: