CHICAGO, Dec. 9, 2014 /PRNewswire/ -- More than nine
in 10 (94%) working middle-income Baby Boomers have plans to retire
one day, but many will be working past age 65, according to a new
study commissioned by Bankers Life Center for a Secure Retirement
® (CSR).
The study - The Middle-Income Boomer Retirement Gap: Savings,
Education and Advice – surveyed 1,000 Americans aged 50 to 68
with an annual household income between $25,000 and $100,000. Of the respondents,
45% were already retired.
Of those still working, more expect to retire after age 65 (43%)
than before age 65 (16%). Just two in 10 (19%) expect to
retire at age 65.
Financial barriers to a comfortable retirement
Although Boomers are optimistic about retirement, many are
concerned about meeting their financial needs in
retirement.
While one-third (38%) feel very or extremely confident about
their retirement savings, two-thirds (62%) express some doubts,
with a quarter (25%) being not too confident or not at all
confident.
Greater investable assets equal greater peace of mind
Middle-income Boomers view a half-million dollars in investable
assets as the financial threshold for retirement security.
Two-thirds (66%) of those with investable assets between
$500,000 and $1 million, and nearly
nine in 10 (86%) of those with investable assets greater than
$1 million, are very confident their
money will last throughout their retirement.
However, most middle-income Boomers have not achieved this level
of asset attainment. Only one in 10 (13%) Boomers had
investable assets of $500,000 or
more. Even more concerning, more than half (54%) have less
than $100,000 and one-third (34%)
reported investable assets of less than $25,000.
One explanation for lower investable assets may be that Boomers
are heavily invested in their homes. While the median
investable assets are $25,000 to
$100,000, the median home equity value reported by survey
participants was $100,000 to
$250,000.
Health care expenses a growing concern, with good
cause
According to the National Center for Health Statistics, the life
expectancy of a 65-year-old has grown by 37% since 1950. As a
result, the amount of money needed to fund a secure retirement –
especially health care – has grown as well.
In an August 2013 CSR survey,
Retirement Care Planning: The Middle-Income Boomer
Perspective, middle-income Boomers estimated the cost of
one year of nursing home care at $46,890. Yet the true cost is nearly
double: $90,520 on average.
With median investable assets of $25,000 to $100,000, one year in a nursing home
could effectively consume the entire savings of many middle-income
Boomers.
Further, Boomers are largely unprepared for managing major
changes in their health:
- 65% don't have a current health care power of attorney
- 64% lack an up-to-date living will
- 63% do not have a current last will and testament
"Boomers are facing a challenging retirement environment, but
just about any of them can improve their financial security through
a combination of investment and protection products," said
Scott Goldberg, president of Bankers
Life. "A professional advisor can play an important role in
repositioning assets for future income and reducing the risk of
financial disruption throughout retirement."
Methodology
The Middle-Income Boomer Retirement Gap: Savings,
Education and Advice is part of a series of
studies commissioned by the Bankers Life Center for a Secure
Retirement. It was conducted in July
2014 by the independent research firm The Blackstone
Group.
The internet-based survey consisted of a nationwide sample of
1,000 Americans. All respondents were aged 50 to 68 and have an
annual household income between $25,000 and
$100,000.
Quotas were established based on the U.S. Census Current
Population Survey data for age, gender and income to obtain a
nationally representative sample. The margin of error is +/- 3.1
percentage points at the 95% confidence level.
About the Center for a Secure Retirement
The Bankers Life Center for a Secure Retirement is the Company's
research and consumer education program. Its studies and consumer
awareness campaigns provide insight and practical advice to help
everyday Americans achieve financial security in retirement.
Bankers Life products focus on the insurance needs of the
middle-income retirement market through nationwide subsidiaries of
CNO Financial Group, Inc. (NYSE: CNO). These companies offer a
broad portfolio of life and health insurance designed especially
for those near or in retirement.
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SOURCE Bankers Life Center for a Secure Retirement