Financial advisors, annuities boost confidence and retirement peace of mind
The United States is facing a retirement savings shortfall, according to a new report by the Insured Retirement Institute (IRI). Nearly one-quarter (22 percent) of baby boomers report they have no retirement savings, while of those do, four-in-ten say they have less than $100,000.
A 2012 Millionaire Corner wealth level study of Millionaire households finds retirement concerns uppermost in the minds of affluent baby boomers ages 45-65. Sixty-one percent, compared with 48 percent of respondents overall, worry about having enough money to sustain them through their retirement years. Sixty-one percent (vs. 44 percent overall) said they are concerned about being able to retire as planned.
In a separate Millionaire Corner survey conducted last May, nearly one-quarter (23 percent) of baby boomers said that not saving enough for retirement was their biggest financial regret.
In a time of financial uncertainty in the wake of the recession, baby boomers face several challenges in saving for retirement. Nearly one-third (29 percent) said they have stopped contributing to a retirement plan, while 25 percent report having had difficulty in meeting mortgage or rent obligations in the past year. Sixteen percent said they have made a premature withdrawal from a retirement plan to meet day-to-day expenses.
Tax increases (a concern for 62 percent of Millionaire baby boomers, according to our study) will also be a barrier to saving for retirement for 54 percent of respondents to the IRI study. Thirty-nine percent said they would be less likely to save should there be an increase in the capital gains tax, while 36 percent responded similarly in the case of a Social Security tax increase.
Working with a financial advisor is one way to overcome barriers to saving for retirement, the IRI report finds. Forty-five percent of baby boomers who have consulted with a financial advisor reported that they are very or extremely confident they will have enough retirement savings, compared with 33 percent who have not consulted an advisor.
An October Millionaire Corner survey of Affluent households finds a similar boost in confidence about their investment knowledge (72 percent) and peace of mind (57 percent) from working with an advisor. Fifty-six percent of baby boomers ages 55-64 said they had received retirement planning advice from their advisor.
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.