Here’s a stat to wake you up—and one reason it’s critically important to continually bang the drum about retirement savings. After all the cajoling, pleading, encouraging and coaxing, 42 percent of baby boomers have absolutely nothing saved.
Baby boomers—even the youngest of whom are just a decade or so away from retirement age —are “in large measure unprepared, having failed both to plan adequately and save enough,” according to a study from the Insured Retirement Institute.
As part of National Retirement Planning Week, the organization said of those who have saved, 38 percent have less than $100,000.
Further, only 38 percent have calculated the amount they will need to retire. However, 79 percent of boomers who work with financial professionals have at least $100,000 saved.
Only 25 percent of boomers believe that they will have enough money and only 28 percent believe they are doing (or did) a good job financially preparing. While a growing number (25 percent, up from 20 percent in 2017) plan to retire earlier than age 65, 29 percent expect to work past age 70.
Forty-six percent expect they will need $45,000 (in current dollars) or more in annual income. Assuming the current average Social Security benefit of $16,848, an individual would need to generate at least $28,152 in additional annual income from a combination of pension benefits and savings.
At current rates, a life annuity paying $28,152 in annual guaranteed lifetime income would cost approximately $430,000, far more than most boomers have saved, according to IRI.
“Many Americans are simply not financially prepared for retirement,” Cathy Weatherford, president and CEO of the Insured Retirement Institute, said in a statement. “This is especially worrisome for baby boomers, a generation whose oldest members are past 70 and whose youngest will turn 65 in just over a decade.”
Baby boomers began reaching age 65 in 2011; 26 million so far, and another 50 million will turn 65 over the next 10 years.
National Retirement Planning Week 2018 is a national effort to help consumers focus on their financial needs in retirement. It runs from April 9-13.