What are baby boomers’ most pressing retirement concerns and what are they doing about them?
Baby boomers have put saving and debt reduction at the top of their to-do list to allay their concerns about retirement, according to ongoing Millionaire Corner research.
Mass Affluent boomers with a net worth between $100,000 and $1 million (not including primary residence) are more concerned than their wealthier boomer counterparts about their retirement financial situation. Seventy percent worry about having enough money set aside for retirement (compared with boomers who have over $1 million, while early two-thirds (62 percent) worry about being able to retired as planned (vs. 48 percent of Millionaires).
Nearly three-fourths (74 percent) are concerned about maintaining their current financial situation (compared with 68 percent of Millionaires). Not surprisingly, they are significantly more likely than Millionaires to be worried about either themself or their spouse losing their job (43 percent vs. 29 percent).
Mass Affluent baby boomers are the least likely to be confident they will have sufficient income to live comfortably during retirement. They are three times as likely than boomer Millionaires to say that their household is not saving enough to meet their financial goals, while almost one-third (32 percent) believe that they will be compelled to delay their retirement due to the prolonged economic downturn.
In a survey of affluent households conducted last month, more than one-third (37 percent) of boomer-aged respondents said that reducing their current spending was their primary strategy to be financially secure in retirement. This was especially important to the youngest boomers in their 40s and 50s (43 percent).
Not surprisingly, these youngest boomers have prioritized increasing contributions to their employer-sponsored retirement accounts, an issue not relevant to those in their 60s who are most likely retired or near retirement (they hope).
They are also more likely than their older counterparts to resolve to reduce their current debt levels., which at this age level probably includes a mortgage and saving for their children’s college.
Risk averse boomers, for whom it is more important to protect their principal, also include saving money in federally insured bank accounts as another strategy to achieve a financially secure retirement. They are also more likely than younger boomers to invest in municipal bonds and purchase annuity products that guarantee income.