Most Boomers lack confidence in their retirement readiness, and the unease is growing.
According to the Insured Retirement Institute (IRI), 37% of Boomers are confident about their financial preparations for retirement, down from 44% in a similar survey in 2011. The IRI report also found that 48% of Boomers who work with a financial professional are very or extremely confident with their financial preparations for retirement, compared to only 28% of those Boomers putting together their own plans.
Our research shows that many Boomers are still experiencing financial difficulties, Cathy Weatherford, IRIs president and CEO, said. Twenty-four percent of Boomers have trouble paying their mortgage or rent; 22% percent of working Boomers have stopped contributing to a retirement savings plan; and 21% of Boomers have postponed their plans to retire.
IRI research also shows that many Boomers have not been able to take advantage of rebounding markets due to insufficient savings, Weatherford added. Twenty-two percent of Boomers have no savings for retirement, she said. Among Boomers who have savings for retirement, 41% have saved less than $100,000. As Boomers get closer and closer to retirement, we believe the realization is setting in that, for many, they are not well prepared.
While many Boomers are not prepared for retirement, those who work with advisors are much more likely to be ready to relinquish their paychecks.
No matter what the field, theres a benefit to working with a trusted professional, Weatherford said. When working with an expert, clients can lean on their years of training, experience and knowledge. Most Americans do not spend their careers working in the retirement planning space. Americans can rely on a financial advisor as a resource--someone who will help them develop a long-term financial plan.
Weatherford described the client-advisor relationship is a special partnership. An advisor is going to be a clients retirement planning partner, guiding clients through the steps they should take, she explained. An advisor is going to learn whats important to clients and what clients goals are, both personal and financial. Then he or she will help map out a financial plan to help clients get there. An advisor will help determine what the clients retirement income needs are, and identify sources to develop that income during retirement. An advisor is going to help explain how financial products work and answer questions.
As Weatherford said in a statement, The silver lining to this report is that Boomers who work with a financial professional are much more confident in their retirement plans. They also are more likely to have determined a retirement savings goal, more likely to have retirement savings, and more engaged with their retirement plans. Developing a holistic retirement strategy, saving, and remaining engaged with the plan--these are the fundamental steps toward attaining financial security during one's retirement years." In the IRI report, consumers are engaged with their retirement plans if they calculate how much they will need to save for their retirement and periodically rebalance their portfolios.