CHICAGO, July 12, 2016 /PRNewswire/ -- A majority (53
percent) of America's non-retirees think that they will pay off
their debts before retirement, however only 23 percent of retirees
actually report being debt free, and 38 percent of retired Boomers
have had to adjust their spending to compensate for a financial
shortfall in retirement, according to a new study commissioned by
Bankers Life Center for a Secure Retirement® (CSR). As
Baby Boomers struggle to reduce their debt before retiring, 60
percent of non-retirees still spent as much or more than their
household incomes in 2015.
The study—Paying for the New Retirement: Responsibilities and
Challenges for Middle-Income Boomers—reveals that more than
eight in ten middle-income Boomers (81 percent) currently have some
debt, and among those who are retired, 77 percent still carry debt.
Six in ten (60 percent) non-retired middle-income Boomers report
they are spending as much or more than their household income,
making it difficult to build their retirement nest egg. Of those
who are spending more than their income, more than half (55
percent) say it is because of bills, debt, loans or other expenses.
One in six (15 percent) say health or medical issues are to
blame.
Between their debt burdens and continued spending, 69 percent of
Boomers don't believe or don't know if they have enough money to
live comfortably to age 85, which, according to the Social Security
Administration, is their average life expectancy.
For many, poor retirement planning, lack of savings, and limited
knowledge of financial tools and investment vehicles have
compounded the problem.
"Americans tend to prepare for what they can anticipate," said
Scott Goldberg, president of Bankers
Life. "Most do not anticipate the amount of debt they will carry
into retirement, in addition to other unplanned expenses such as
long-term care and various health related costs. Our studies
show us that few Boomers are taking the steps to plan for and
overcome these hurdles."
According to the latest CSR report, many middle-income Boomers
are expecting to rely on retirement income streams—such as employer
pensions or Social Security—that are becoming less common or may be
insufficient to sustain a lifestyle they are comfortable with. In
addition, only about half (47 percent) feel they have a strong
understanding of financial matters.
"The average Boomer has struggled to stay current on what
financial planning options are available to them, which magnifies
the weight of any financial distress they experience," Goldberg
explains. "Retirement in 2016 looks a lot different than it did
just 20 years ago, and there's been a lag in planning as those
preparing for retirement try to solve a financial challenge that
continues to evolve."
Paying for the New Retirement surveyed 1,001 Americans
age 52 to 75 that have an annual household income between
$25,000 and $100,000 and less than
$1 million in investable assets. The
study shed light on the following gaps in retirement planning:
- Only three in ten retired middle-income Boomers (28 percent)
say they were financially prepared when they retired.
- Although three-quarters (78 percent) of non-retired
middle-income Boomers say that they will wait to age 65 to start
collecting Social Security benefits, in reality, only about four in
ten (38 percent) do. This is despite the fact that delaying one's
benefits can lead to increased monthly benefit
amounts—approximately an 8% increase for every year one waits up to
age 70.
- Only half are confident in their understanding of annuities (51
percent) and Roth IRAs (48 percent).
The survey also revealed that most middle-income Boomers are
concerned about what they largely cannot control, including
decisions made by the federal government regarding budgets and
spending. Meanwhile, few are taking proactive steps to address the
things they can control. Only 9 percent of those surveyed say they
were very prepared for retirement, but 39 percent have not taken
any active retirement planning steps.
"It is never too late to improve the outlook for your retirement
financial security," Goldberg says. "Beginning to pay down debt and
developing an action plan are critical first steps toward a secure
retirement. A financial professional can help you understand the
range of tools available and create an informed plan toward your
retirement goals."
About the Center for a Secure Retirement
The Center
for a Secure Retirement is the Bankers Life's research and consumer
education program. The Center's studies and consumer awareness
campaigns provide insight and practical advice to help everyday
Americans achieve financial security in retirement.
About Bankers Life
Bankers Life focuses on the
insurance needs of middle-income Americans who are near or in
retirement. The Bankers Life brand is a part of CNO Financial
Group, Inc. (NYSE: CNO), whose companies provide insurance
solutions that help protect the health and retirement needs of
working Americans and retirees. There are more than 5,000 Bankers
Life insurance agents at over 300 offices across the country. To
learn more, visit BankersLife.com.
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SOURCE Bankers Life