Tags: Baby boomers | save | retirement | income

Survey: 40 Percent of Baby Boomers Haven't Saved for Retirement

By    |   Thursday, 16 April 2015 10:10 AM

By now you've probably read descriptions of many studies showing that we haven't saved enough for retirement.

Now, here's another one from the Insured Retirement Institute, an association for the retirement income industry, focusing on baby boomers.

The survey found that just 60 percent of them report having saved some money for retirement, down from about 80 percent in prior years. Only 19 percent of Boomers have $250,000 or more saved for retirement.

"Yet at the same time, many boomers with smaller retirement savings may have unrealistic retirement expectations," the report states.

Four out of 10 Boomers with less than $250,000 saved for retirement and no private pension believe they will be able to pay for their basic needs and medical expenses in retirement, and have at least some money left over for travel and/or other leisure activities.

During the past year, nearly a quarter of boomers reported experiencing difficulties paying their rent or mortgage, and 19 percent stopped contributing to a retirement account.
The percentage of boomers feeling extremely or very confident they will have enough money to last throughout retirement has declined significantly, to 27 percent of boomers in 2015 from almost four in 10 in 2011.

Meanwhile, more than one-third of boomers believe they will be more comfortable in retirement than their parents, despite only about one in four expecting a defined benefit or defined contribution plan to be a major source of income.

It sounds like some boomers may have been ingesting the hallucinogens that were so popular in the 1960s.

Elsewhere on the retirement front, one rule of thumb posits that your retirement income must total 80 percent of your final salary to maintain your standard of living.

"But there is a decent chance you could happily retire with far less," writes Wall Street Journal columnist Jonathan Clements.

He cites a 2014 survey of recent retirees by T. Rowe Price Group, showing that on average they were living on 66 percent of their pre-retirement income.

But that wasn't sending them to the poor house. A total of 57 percent were living as well or better than when they were working, and 85 percent felt "I don’t need to spend as much as I did before I retired to be satisfied."

Remember that in retirement you no longer have to save for retirement, you no longer have to contribute to Social Security and Medicare, your taxes will likely go down, and at some point you will start receiving Social Security income.

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By now you've probably read descriptions of many studies showing that we haven't saved enough for retirement.
Baby boomers, save, retirement, income
Thursday, 16 April 2015 10:10 AM
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