The MainStay Investments’ Boomer Retirement Lifestyle Study results show that many pre-retirees from the baby boomer generation are willing to put off retirement in order to live comfortably in the future. The survey focused on those ages 45 to 65 who are not retired yet and it found that 40 percent of these Americans are planning to delay retirement in order to afford the lifestyle they are currently living.
According to Matthew Leung, director and head of practice management programs at MainStay Investments, “Baby boomers are redefining what constitutes a basic need and what they consider a luxury.”
The survey results found that the majority of boomers consider healthcare coverage, Internet connection, shopping for special occasions and birthdays, and pet care, to be among their basic needs. Almost half of boomers also consider family vacations and weekend getaways, elder care or home aid, professional hair care, and funding educations for their children or grandchildren to be basic needs as well. This information indicates that things once considered luxuries are now being considered basic needs.
In order to afford these needs and luxuries, boomers plan to continue working longer, start saving more, adjust portfolio allocations, and seek help from a financial advisor. Forty-seven percent of boomers surveyed said they would be willing to downsize their current home in order to afford the luxuries they desire. When asked what would be the hardest luxuries to give up, boomers most frequently answered travel and dining out. Overall, men and women seemed to be on the same page with basic needs and luxuries, with the exception of a few gender-specific luxuries.
Almost every boomer surveyed, at 98 percent, reported that healthcare was a basic need and are “extremely concerned” about being able to afford it. Nearly a quarter of boomers, 74 percent, considered healthcare as their number one or number two most important concerns. However, it seems that boomers actions are not a reflection of their reported concerns –41 percent are not currently doing anything to save for healthcare and plan to rely entirely on retirement assets in order to afford it. Over 55 percent of boomers claim they will work longer before retiring in order to afford healthcare, as opposed to giving up luxuries.
In order to guarantee income for life, 84 percent of consumers reported that they would be willing to allocate a portion of their total assets. Of that 84 percent, half reported that they would only be willing to allocate a portion of their assets if the income was enough to cover both basic and “discretionary” expenses.
While 48 percent of baby boomers are not currently seeking the assistance of a financial advisor, these survey results indicate that they do need help creating a retirement plan. Though 52 percent of boomers do not plan to consolidate their retirement assets, this research clearly shows boomers have a healthy “appetite” for guaranteed income products.
Written by Kelly Mellott