In a recently released study, the Insured Retirement Institute (IRI) found that nearly 48% of Generation Xers who consulted a financial advisor have high levels of confidence that they will live comfortably throughout retirement, compared with less than 29 percent who have not. Among Baby Boomers the corresponding numbers are 43% and 32%. Yet neither generation is really prepared for retirement — even though they think they are knowledgeable about investing.
Key findings include:
• 51% of Baby Boomers and 41% of Gen Xers have not calculated how much they will need
• 22% of Baby Boomers and 41% of Gen Xers have less than $50,000 in retirement savings
• 22% of Baby Boomers and 28% of Gen Xers have no retirement savings
The past 12 months have been particularly troubling. Significant percentages of both generations reported that they:
• stopped adding money to a retirement savings plan (29.3% of Baby Boomers and 22.6% of Generation Xers);
• postponed plans to retire (20.9% of Baby Boomers and 17.1% of Generation Xers); and
• prematurely withdrew funds from a retirement plan (16.0% of Baby Boomers and 15.0% of Generation Xers).
All of this adds up to a crisis. These two generations seem to want to postpone dealing with the realities of retirement planning — 76% of Baby Boomers and 78% of Gen Xers are confident they will have enough money to live on in retirement. This presents a real challenge to advisors willing and able to help.
