Time is running out for baby boomers, says Cathy Weatherford, CEO and president of the Insured Retirement Institute.
Weatherford was not referring to their life spans, but to the time older Americans have to plan for retirement, which many have not done. A group of retirement specialists have kicked off National Retirement Planning Week with dire warnings about boomers unpreparedness for retirement, which is now staring them in the face.
Retirees and near retirees would be hard pressed to sort through all of their retirement options and needs without a financial advisor to assist them, says James Mullery, head of distribution and sales for Prudential Annuities. Right now, many are falling far short of knowing what they need for retirement and knowing how to provide for it.
IRI, a trade association for the retirement industry, on Monday released a study called Boomer Expectations for Retirement 2017 that surveyed 800 Americans ages 54 to 70 and found them to be an age group unprepared to face their retirement. Only 54 percent of boomers have any retirement savings, and only 40 percent have tried to calculate how much they need to save to retire, the report says.
A mere 23 percent of boomers believe that their savings will last throughout retirement, or that they have done a good job preparing for retirement. “Paradoxically, however, six in 10 boomers believe their retirement income will cover their basic expenses, with at least some leftover for travel and leisure activities,” the study says, a disconnect that could cause them to run out of money.
Boomers who work with a financial professional are better off. More than 90 percent of those with an advisor have retirement savings, and 75 percent have saved $100,000 or more, the report says. Eighty-five percent of baby boomers believe it is important to have a source of guaranteed lifetime income in addition to Social Security, but only 8 percent would consider purchasing an annuity.
Diane Garnick, chief income strategist at TIAA, a financial services organization, says the lack of enthusiasm for annuities can be partly blamed on boomers who have not stopped to consider how much money they will need. Weatherford says National Retirement Planning Week is designed to spark that kind of research on the part individuals.