Cecily O'Connor
RedwoodAge.com
When it comes to retirement planning, baby boomers are full of contradictions.
As a generation, boomers are generally optimistic about their golden years. They think they'll fare better than their parents, and even advocate that younger generations save early.
| What single issue might prevent you from accomplishing things you wish to do in retirement? | |
| Lack of money | 71% |
| Health problems | 13% |
| Lack of time | 6% |
| Family obligation | 6% |
| Other | 4% |
Yet boomers' actions paint a very different picture.
Nearly 60 percent of boomers have not done any formal retirement planning, even though the majority of them fear a lack of money may hinder their "envisioned retirement," according to a new report from Thrivent Financial , which surveyed 2,500 men and woman between 45 to 64.
Only 20 percent believe they will worry less about money than their parents. And while 86 percent would advise younger generations to start saving for retirement as soon as possible, only about a quarter have begun saving themselves.
They're right to be worried. The average 401k in the US is only about $58,000. The average stay in a nursing home for a single year is about $75,000.
“Planning is key,” said Pam Moret, Thrivent Financial executive vice president of marketing and products. “And the planning process will likely uncover some obvious solutions - saving more and possibly working longer."
Money managers that oversee 401(k)s and other savings accounts recently said planning for longer retirements is one of many big issues affecting boomers trying to stretch every dollar.
Savings Regret
Overall, boomers' "contradictory state of
optimism versus reality" is somewhat understood by looking at their actual
plans for retirement. Those plans, for the most part, don't include grandiose,
expensive details. When asked how they wanted to spend retirement, almost half
expected to travel within the United States. Thirty-nine percent wished to spend
more time with children and grandchildren, and 23 percent want to take up a new
hobby, craft or activity. None of those simple things require a fortune.
Even as they plan their next step, many boomers expressed regret about poor savings habits. The majority of boomers said they wished they had begun saving when they had their first full-time job. One in five didn't start putting money away until they were at least 45. And one in four boomers hadn’t begun saving for retirement at all.
The biggest savings obstacle for many boomers was they started to save and invest too late in life. Meanwhile, about 32 percent of baby boomers believed the cost of health care or health insurance was an obstacle. A low-paying job, credit card debt and the cost of housing rounded out the top five obstacles at 29 percent, 28 percent and 27 percent, respectively.
Many boomers are concerned that lack of money will prevent them from achieving what they wish to accomplish in retirement, the study found. The potential for health problems also hit a nerve.
Overall, financial-related activities are low on boomers' list of priorities. Pre-retirees said they were least likely to leave a significant inheritance, start a new business or contribute money to organizations during retirement.
While most boomers have not met with a financial advisor to discuss their plans, they are talking with others. Forty-one percent plan to discuss retirement with family members other than their adult children, while an additional 37 percent plan to discuss their retirement plan with adult children. One-quarter also stated that they will likely discuss retirement with close friends.
