Boomer Confidence in Retirement at a Five-Year Low
More than three quarters of Baby Boomers don’t believe they’ve saved enough for retirement, and just 22% think they’re doing a good job preparing for it financially, according to a new survey cited by ThinkAdvisor.
Those numbers are the worst since 2011 and 2012 respectively, according to an Insured Retirement Institute survey of 800 Americans between 53 and 69 years old, the web publication writes.
Boomers are less confident than they were five years ago about most aspects of retirement: 27% think they’ll be able to shoulder healthcare costs, compared to 37% who did in 2012, and just 16% think they’ll be able to afford long-term care, compared to 24% in 2012, according to the survey.
Cathy Weatherford, president and CEO of IRI, blames the falling confidence on the low interest rates which have dampened savings, and the length of the recession, during which many Boomers have lost their jobs or had to take in their kids, ThinkAdvisor writes.
But the low confidence levels also reflect reality, the publication writes; just 55% of Baby Boomers had retirement savings and 42% of those who did saved no more than $100,000, according to the survey.
For financial advisors, Boomers’ low confidence could be encouraging. On the one hand, just 27% of those surveyed sought financial advice from a professional. On the other hand, the majority want to change their ways; 68% said they would have saved more, 67% said they would have been better off starting saving earlier, ThinkAdvisor writes.
More Boomers are also paying attention to the intricacies of retirement savings; 27% said they realize they should have maximized employer-provided benefits, compared to 17% who said so last year, according to the survey.
The falling confidence is actually a positive development, Jamie Hopkins, associate professor of taxation at the American College, tells Financial Advisor magazine.
It means Boomers are increasingly aware of retirement issues and their need for assistance from professionals, he tells the publication.
Advisors who want to reach Baby Boomers, however, should note that 62% of them prefer to meet in person, according to the survey, and the same number would likely not use an automated platform for financial planning, Financial Advisor magazine writes.