Baby boomers’ expectations for the future aren’t so rosy, especially when compared to the previous generation’s retirement experience, says a recent study from the Bankers Life and Casualty Company Center for a Secure Retirement (CSR). Replacing visions of slowing down, enjoying retirement, and being taken care of by others, 78% have a focus on work, with 77% planning to keep up with technology; 75% of those surveyed expect to continue working even in retirement.
In March 2011, independent research firm The Blackstone Group conducted Middle-Income Boomers, Financial Security and the New Retirement, surveying 500 middle-income Americans aged 47 to 65 with an income between $25,000 and $75,000. The survey found that 60% of boomers envy the pensions and guaranteed incomes that characterized their parents’ retirements, but will be largely absent from their own, and 67% think their retirement experience will differ drastically from their parents’.
This change in outlook, says the CSR, is due to responsibility for retirement saving shifting from the government and employers to individuals, including 401(k) plans replacing corporate pension plans, the uncertain future of the Social Security and Medicare programs, and the discontinuation of many employer-paid retiree health benefits.
With the shift away from defined-benefit plans to defined-contribution plans, the CSR found that only 56% of middle-income boomers work for an employer that offers a retirement savings plan, compared to the national average of 72% of all workers. And, out of those, nearly a quarter of those retirement contributions aren’t matched by the employer.
A significant portion of boomers have no pension or retirement accounts at all, at about 14%, and 55% of middle-income boomers have saved less than $100,000 for retirement.
“The retirement of the Baby Boom generation will not only test the limits of government programs such as Medicare and Social Security, but also help shape the definition of retirement itself,” said Scott Perry, president of Bankers Life and Casualty Company, a national life and health insurer. “Boomers may have to take more personal responsibility for their retirement financial security than was the case of their parents’ generation and plan for the risks that may jeopardize this security, like long-term care, inflation and outliving their money.”
The complete study can be viewed here.
Written by Alyssa Gerace