A survey of baby boomers reveals that “guaranteed income” is their top retirement wish list item.
With an estimated 26 million baby boomers (age 65+) in retirement and an estimated 50 million boomers (age 55-64) knocking on retirement’s front door – it makes sense that boomers are at the center of most retirement surveys.
The resulting insight of those surveys? Not so great.
This Investment News article outlines a survey conducted by the Insured Retirement Institute (IRI) of baby boomers’ retirement expectations and preparedness.1 Of the over 800 respondents, 42% say they have no retirement savings. Even worse, of those boomers with retirement savings – 38% have less than $100,000 saved.
“Only 25% of boomers believe they will have enough money in retirement.”
The bottom line is that retirement confidence amongst baby boomers is very low, with only 25% of boomers believing they will have enough money in retirement. Even those with retirement savings do not know how best to use them, as 40% of boomers are unsure how to turn their 401(k) and IRA accounts into retirement income. Many boomers are simply planning to tap their retirement accounts with an “as-needed” approach.
Compound this lack of retirement savings with greater longevity, higher health care costs, and a volatile market – and boomers are facing more challenges on their road to retirement than previous generations. The result of which could see many of them running out of money while in retirement.
Baby boomers are looking for sources of retirement income
Many baby boomers know they need more retirement income, but don’t seem to know where to get it. When asked about the most important trait in a retirement investment, 41% identified “monthly guaranteed income” as their top choice – with 70% saying it needs to be guaranteed for life. Yet only 14% looked at annuities as a source for lifetime income.
Working with a financial professional helps boomers
On the bright side of this study – nearly 85% of boomers who have a financial professional have either included an annuity or have discussed annuities as a way to provide guaranteed retirement income.
Have you talked to your clients about securing additional sources of protected lifetime income? If you have boomer clients who are close to retirement, annuities can offer a variety of options for predictability and growth potential. Annuities could also help them supplement what Social Security delivers and could ensure their essential expenses are covered no matter how long they live in retirement.
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