For many, retirement may simply have to be delayed
New research from MintelMintel is the world’s leading market intelligence agency. For over 40 years, Mintel’s expert analysis of the highest quality data and market research has directly impacted on client success. With offices in London, Chicago, Belfast, Kuala Lumpur, Mumbai, Munich, New York, São Paulo, Shanghai, Singapore, Sydney, Tokyo and Toronto, Mintel has forged a unique reputation as a world-renowned business brand. Please visit www.mintel.com.
While the US economy is bouncing back from the recent recession, it appears Baby Boomers may have incurred lasting consequences: new research from Mintel reveals that 20 percent of Boomers do not have any retirement savings.
What’s more, two in five (41 percent) Baby Boomers report having less than $250,000 saved for retirement.
Among Boomers who have been relatively good about saving, with more than $250,000 stashed away, there exist concerns: half (52 percent) say they are worried about having enough money to retire. Another one third of Baby Boomers overall are worried that they will outlive their money (31 percent) despite the majority of non-retired Boomers saying they regularly contribute to a retirement savings account (55 percent). These concerns are driving some Boomers to put off retirement with 15 percent reporting that they do not plan to retire.
This could be the result of Baby Boomers’ lack of education on retirement savings. Mintel research indicates that just 28 percent of Boomers agree that they understand enough about retirement investing decisions; understanding declines drastically among Boomers with less than $100,000 saved for retirement (11 percent).
Additionally, only one in 10 Boomers manage their finances according to a written financial plan, and one third (33 percent) use a financial adviser to help with planning and investing. A mere 10 percent of Boomers say they do not have financial concerns about life in retirement.
An mounting shortfall
“Our research reveals that many Baby Boomers are facing a shortfall that will be difficult to overcome if they plan on retiring in the coming years. Even Boomers who have a substantial amount saved for retirement are concerned that they don’t have enough and are worried about the possibility of outliving their savings,” said Robyn Kaiserman, Senior Financial Services Analyst at Mintel.
“What’s more, Boomers freely admit they don’t understand enough about retirement investing to make good decisions, yet they are not seeking help from an adviser. This presents huge opportunities for financial services brands, especially those that offer products and services that work with Boomers specifically to maximize future earnings prior to retirement.”
While having enough money to enjoy retirement is a major concern to the majority of Baby Boomers (55 percent), being healthy enough to enjoy retirement is also top of mind (45 percent). As such, three in 10 Boomers agree that major concerns upon retiring include having adequate health insurance (30 percent), paying for health insurance (29 percent) and paying day-to-day bills (29 percent). The youngest Boomers age 51-54 are significantly more likely than Boomers overall to be worried about having enough money to retire (66 percent) and paying day-to-day bills (39 percent).
Healthcare concerns grow with age
“As Boomers age, they become more concerned about their health. This not only translates to the obvious concern about health insurance, but also to the cost of any anticipated or unanticipated care at a healthcare facility.
To help them overcome these frustrations, insurance companies could engage Boomers in wellness programs. Offering rewards for participating in exercise or healthy eating programs may also motivate Boomers to engage in more healthful behaviors, easing some of their retirement worries,” continued Kaiserman.
All concerns aside, the majority of US Baby Boomers who plan to retire are in agreement that retirement is for resting and relaxation, not for work (56 percent). Mintel research indicates that the majority of Baby Boomers (55 percent) say that, financially speaking, they are able to do everything they planned to do in retirement. However, not everyone is so lucky: in the wake of the recession, 47 percent of Boomers are worried they will have to work longer than they want to in order to do everything they planned for retirement.
Shining a spotlight on retirement activities for US Baby Boomers, one in five say they will work part-time because they want to (21 percent).
In addition to day-to-day finances, this supplemental income could help pay for travel and family entertainment, as nearly half (47 percent) of Baby Boomers plan to travel once they retire, and 38 percent plan to spend more time with family. In order to fulfill their plans, two in five Boomers already have a monthly retirement budget in place (38 percent). That said, not everyone is a planner, as Mintel research reveals 21 percent of Boomers say that they have not yet thought about their plans after retiring.
“While many Baby Boomers plan to travel, spend more time with family and even work part-time during their retirement, there exists a sizable portion of Boomers who haven’t thought about their plans for after retirement. Brands could step in to help Boomers not only save more in advance of retirement, but also begin to budget for the lifestyle changes that lie ahead,” concluded Kaiserman.