Between their debt burdens and continued spending, 69 percent of Boomers don't believe or don't know if they have enough money to live comfortably to age 85, which, according to the Social Security Administration, is their average life expectancy.
For many, poor retirement planning, lack of savings, and limited knowledge of financial tools and investment vehicles have compounded the problem.
"Americans tend to prepare for what they can anticipate," said Scott Goldberg, president of Bankers Life. "Most do not anticipate the amount of debt they will carry into retirement, in addition to other unplanned expenses such as long-term care and various health related costs. Our studies show us that few Boomers are taking the steps to plan for and overcome these hurdles."
According to the latest CSR report, many middle-income Boomers are expecting to rely on retirement income streams—such as employer pensions or Social Security—that are becoming less common or may be insufficient to sustain a lifestyle they are comfortable with. In addition, only about half (47 percent) feel they have a strong understanding of financial matters.
"The average Boomer has struggled to stay current on what financial planning options are available to them, which magnifies the weight of any financial distress they experience," Goldberg explains. "Retirement in 2016 looks a lot different than it did just 20 years ago, and there's been a lag in planning as those preparing for retirement try to solve a financial challenge that continues to evolve."
Paying for the New Retirement surveyed 1,001 Americans age 52 to 75 that have an annual household income between $25,000 and $100,000 and less than $1 million in investable assets. The study shed light on the following gaps in retirement planning:
- Only three in ten retired middle-income Boomers (28 percent) say they were financially prepared when they retired.
- Although three-quarters (78 percent) of non-retired middle-income Boomers say that they will wait to age 65 to start collecting Social Security benefits, in reality, only about four in ten (38 percent) do. This is despite the fact that delaying one's benefits can lead to increased monthly benefit amounts—approximately an 8% increase for every year one waits up to age 70.
- Only half are confident in their understanding of annuities (51 percent) and Roth IRAs (48 percent).
The survey also revealed that most middle-income Boomers are concerned about what they largely cannot control, including decisions made by the federal government regarding budgets and spending. Meanwhile, few are taking proactive steps to address the things they can control. Only 9 percent of those surveyed say they were very prepared for retirement, but 39 percent have not taken any active retirement planning steps.
"It is never too late to improve the outlook for your retirement financial security," Goldberg says. "Beginning to pay down debt and developing an action plan are critical first steps toward a secure retirement. A financial professional can help you understand the range of tools available and create an informed plan toward your retirement goals."
About the Center for a Secure Retirement
The Center for a Secure Retirement is the Bankers Life's research and consumer education program. The Center's studies and consumer awareness campaigns provide insight and practical advice to help everyday Americans achieve financial security in retirement.
About Bankers Life
Bankers Life focuses on the insurance needs of middle-income Americans who are near or in retirement. The Bankers Life brand is a part of CNO Financial Group, Inc. (NYSE: CNO), whose companies provide insurance solutions that help protect the health and retirement needs of working Americans and retirees. There are more than 5,000 Bankers Life insurance agents at over 300 offices across the country. To learn more, visit BankersLife.com.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/debt-and-continued-spending-can-keep-retirement-from-being-anything-but-golden-for-boomers-300296912.html
SOURCE Bankers Life