The Insured Retirement Institute’s Boomer Expectations for Retirement 2019 reports that one out of three of baby boomers plan to retire at the age of 70 or older, overestimating the age at which they will actually retire. Involuntary retirement allows only about 7% of boomers to actually make it to age 70. More than four in 10 boomers erroneously believe that Medicare will cover long-term care costs. Six in 10 boomers have taken no action with their workplace-defined contribution plans. One-third of boomers are not sure if their savings is enough to retire on. Furthermore, only one out of four baby boomers who don’t have a financial advisor have ever attempted to calculate a retirement savings goal.
Boomers’ lack of confidence is a mismatch in parity between expected expenses and potential income. Boomers have been unaware of the need to take actions that can ensure efficient and sustainable income is created from their savings, or unaware of the need to take such action to improve their retirement readiness.
But what if saving for retirement isn’t a top priority for you? Would you save more, and put forth effort to put a plan in place, for the long term? Maybe a happy, healthy retirement is not one of your goals. Northwestern Mutual’s 2019 Planning & Progress Study found that 56% of Americans don’t know how much money they’ll need to retire comfortably. It further found that Americans continue to define “success” based on relationships, health and lifestyle, over material goods, career, and wealth.
Baby boomers are likely to need a financial advisor (FA) for the following specific reasons:
- create a retirement income plan
- tax planning
- plan for health and long-term care costs
- set realistic retirement savings goals
- select investments
- determine when to claim Social Security benefits
The Transamerica Center for Retirement Studies (TCRS) 19th Annual Retirement Survey provided the following recommendations for workers:
- create a budget
- save for retirement
- participate in employer-sponsored retirement plans
- calculate retirement savings needs and develop a retirement strategy
- get educated about retirement investing
- be proactive to help ensure continued employment even in retirement
- be sure to have a backup plan
- take good care of yourself and safeguard your health