Fearing Retirement More Than Death
Boomers aren't exactly optimistic about their retirement prospects. In fact, most of them are downright scared.
A study by Allianz Life Insurance Co. found the economic downturn was a big wake-up call. Baby boomers now fear running out of money during their retirement more than they fear death.
Katie Libbe, vice president of consumer marketing and solutions at Allianz, noted the survey obtained responses from 3,300 people age 44 to 75, so it actually covered a group larger than boomers, defined as those born between 1946 and 1964. The white paper identified younger boomers as those 44 to 49 years old.
"The older respondents typically have access to traditional pension plans, but as you get into the younger group-certainly the youngest of the boomers-they don't have traditional pension funds any more. All they have are 401(k)s. There is a big difference between those markets," Libbe said.
Among the questions asked:
Is there a retirement crisis in the U.S.? Ninety-two percent of all respondents said yes. Ninety-seven percent of younger boomers agreed.
Do you have a pension plan? Most of those 44 to 49 years old said no. Many of those 60 to 75 said yes.
What will your expenses be in retirement? Thirty-one percent don't know.
Will your income last through retirement? Thirty-six percent don't know.
What do you fear more-running out of money in retirement or death? Sixty-nine percent feared running out of money more than death. That rose to 77% among younger boomers.
All this sounds like a cry for help, but only 19% of younger boomers are working with a financial adviser. Forty-one percent are receptive to the idea.
"There are a couple reasons for that," Libbe suggested. "Number one, nobody thought the market would do what it did in 2008 and 2009. A lot of baby boomers have seen short-term bear markets. The market goes up, the market goes down. Now that they're getting close to retirement, a lot of them are thinking, 'Hey, maybe this isn't something I should try to do myself.'"
"Boomers are much more interested now in protecting a portion of their retirement portfolios. They want a nice balance of conservative investments as well as some type of exposure to upside growth. Depending on the sort of products and what kind of education they get from the credit union, it could serve a nice niche between people trying to do it themselves, and people who don't feel they have a big enough portfolio to work with a financial adviser."
"Could be your boomer members will be paying closer attention to the financial information they receive, including statements from their credit union."