Is the glass mostly empty or mostly full?
Nearly half (47 percent) of baby boomers and Gen Xers believe their ideal retirement is very attainable, which is another way of saying over half do not. But add in another 45 percent that feel their ideal retirement is somewhat attainable and the numbers suddenly aren’t so bad.
A new T. Rowe Price study finds those who did not feel their ideal retirement was attainable cited obstacles such as not having enough money, future health issues and family obligations.
And as one would expect, attitudes differed by gender:
- Men (40 percent) were more likely than women (36 percent) to describe their retirement years as a time to relax and indulge.
- Men (50 percent) were more likely than women (44 percent) to say their ideal retirement was very attainable.
- Women (76 percent) were more likely than men (64 percent) to list traveling as part of their ideal retirement.
“It’s great to see that most people have positive perceptions of this next chapter in their life and that they believe their dreams are attainable,” Judith Ward, CFP and senior financial planner at T. Rowe Price, said in a statement. “Despite very different mind-sets, we found that these investors have taken the steps that will help them get there, such as taking advantage of 401(k) and IRA accounts, saving 10 percent– 20 percent of their income, diversifying their portfolio, and keeping their retirement funds intact.”
Longevity Bonus: A Blessing or a Curse?
The study also looked at emotions around longevity in retirement. Americans are living longer and with an increased life expectancy, many will have an extra 30 years of retirement for which they need to plan. Surprisingly, respondents had mixed emotions on whether these additional years were a positive or a negative.
- More than half (55 percent) of respondents said an additional 30 years of life would be “both a blessing and a curse,” noting potential health issues during the later years may outweigh the benefits of living longer.
- Gen Xers (37 percent) were more likely to label it a blessing compared with baby boomers (29 percent).
- 45 percent of respondents were skeptical about the idea of an extra 30 years of life, while 35 percent were optimistic and 26 percent were excited.
- Gen Xers (73 percent) were significantly more likely to say the “longevity bonus” would impact how they plan and save for retirement than baby boomers (62 percent). Both cited they would need to work longer in order to save more money.