Scottrade Study: Aging U.S. Baby Boomer Population May Find Financial Stress in Retirement
65 percent of Boomers not sure whether IRA or other retirement savings will be enough, according to 2007 American Retirement Study by Scottrade
St. Louis – Forty-two percent of American Baby Boomers*, those between the ages of 45 and 64, say they will not have enough money to do the things they want to do when they retire and nearly one-third (31 percent) say they will have to cut back on their current lifestyle in retirement, according to the 2007 American Retirement Study by Scottrade, the leading branch-supported online investment firm.
With over 78.2 million Baby Boomers, this aging population may soon find itself in dire straits. According to Scottrade’s 2007 American Retirement Study:
· 65 percent believe they have not saved enough for retirement
· 29 percent have saved less than $25,000 for retirement
· 23 percent of Boomers say they will never be able to retire and not need to earn an income
· 41 percent will have to keep working during retirement
“There’s a disparity here in that while most Boomers feel very unprepared financially for retirement, this demographic remains keenly aware of the problem but is not addressing it properly,” said Chris X. Moloney, Scottrade’s chief marketing officer. “This may be a case of doing too little, too late. Three in ten have saved under $25,000, which is concerning.”
According to the study, the biggest financial concern among Boomers (62 percent) was having enough money for retirement. Boomers also expressed other general financial concerns, including:
* Having enough money to cover healthcare related costs (50 percent)
* Paying for unexpected, major expenses (50 percent)
* Protecting family in case of premature death/disability (43 percent)
* Getting a good return on investment (44 percent)
* Protecting wealth (38 percent)
* Having too much debt (36 percent)
* Caring for elderly parents/relatives (35 percent)
With 51 percent of Boomers relying on 401(k) plans to provide the necessary resources in retirement, 37 percent also have IRAs, SEPs or similar retirement plans, according to Scottrade.
“It is never too late to increase the rate at which you are saving for retirement,” Moloney said. “401(k)s and IRAs are an easy way to plan for retirement, even if you are doing so later in life.”
The 2007 American Retirement Study by Scottrade polled 1,000 Americans 18 years of age or older using Synovate’s national online research tool, eNation®, in early February 2007 to gauge Americans’ attitudes and behavioral information about retirement and retirement planning. The sample was balanced to be representative of the general population based upon region, gender, age and household income data from the U.S. Census Bureau. The margin of error was +/- 3 percent.
*While there are many different age groupings often classified as “Baby Boomers,” this study represents the core segment of ages 45 to 64 as “Baby Boomers.”
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