U.S. boomers stalling on retirement planning, survey suggests

(September 24, 2003) The bulk of America’s baby boomers aren’t paying much attention to financial planning and remain ill-prepared for retirement, according to a survey conducted for ING. Nearly two-thirds of boomers questioned said they spend one hour or less on retirement planning activities in a typical month. One in three said they don’t spend any time on such activities.

“Despite the floundering economy, a dismal job market, war in Iraq and the events of September 11, a significant number of baby boomers have not heeded the warnings about preparing for their retirement,” the survey concludes.

Half of those surveyed said they felt comfortable and in control with regard to their financial preparations for retirement. But when asked how they would fare in a financial emergency, nearly half also said they wouldn’t last more than six months before having to tap into their retirement savings.

About three-quarters of boomers said they’d prefer to seek the assistance of an advisor for financial planning, but only 66% indicated they had actually taken that step.

ING conducted a similar survey in 2001. In comparing this year’s survey to the 2001 numbers, ING found that many boomers have not significantly altered their retirement plans. However in 2003, most respondents said they expect to financially secure enough to retire when they reach the age of 62. In 2001, most felt they’d be secure by age 60.

“Boomers are finally realizing that they will have to work longer than they ever thought,” said Thomas J. McInerney, CEO of ING U.S. Financial Services. “They are beginning to understand that they may not be prepared for retirement and have to recover financially from the economic downturn.”

On the positive side, the vast majority of boomers said they belong to an employee pension plan and nearly half contribute to a personal retirement savings plan. More than 80% said they have contributed as much or more to those plans compared to two years ago. Only 5% have decreased their contributions.

ING interviewed 500 people between the ages of 35 and 55, with incomes ranging from $50,000 US to $125,000 US.

Filed by Doug Watt, Advisor.ca, dwatt@advisor.ca