LIMRA SecureRetirement Institute examines generational differences in retirement confidence.
ARLINGTON,Va., April 16, 2015—A new LIMRA Secure Retirement Institute research studyfinds that only 4 in 10 Boomers and Gen X workers, and only 3 in 10 Millennialsknow how much money they should be saving in retirement.
“Notsurprisingly, our study found that the majority of Americans — no matter theirgeneration — are not confident that they will be able to achieve the retirementlifestyle they desire,” said Cecilia Shiner, associate research director, LIMRASecure Retirement Institute. “Ifconsumers aren’t confident that they are doing the basics correctly — likesaving enough for retirement — it is unlikely that they will be confident oftheir retirement prospects.”
TheInstitute found nearly half of Baby Boomers and 4 in 10 Gen X and Millennialswho have access to a defined contribution (DC) plan are saving at least 10percent of their income in their current DC plan. Across all generations, about 4 in 10 selecttheir DC plan investments on their own. Millennials and Gen X workers are more likely to be auto-enrolled sotheir investments are automatically selected for them, while Boomers wereslightly more likely to engage a financial professional to help them selecttheir investments.
“LIMRA Secure Retirement Institute estimatesthat individuals could live upwards of 30 years in retirement,” saidShiner. “With 7 in 10 pre-retireesreporting that their social security and pensions will not cover their basicliving expenses, it is concerning that more than half of Boomers have less than$100,000 saved for retirement and more than a third have less than $25,000saved for retirement.” (See Generations Chart)
Only1 in 10 American workers report being very knowledgeable about investments orfinancial products. Boomers and Gen Xconsumers were more likely to feel somewhat knowledgeable (51 percent and 46percent, respectively) while more Millennials describe themselves as not veryor not at all knowledgeable (49 percent).
“Acrossall generations, only about one quarter of workers are using a paid financialprofessional,” noted Shiner. “Prior Institute research has found that consumerswho use a financial professional to plan for retirement are more likely to feelconfident in their retirement security. Our research shows only 30 percent of Boomers have a retirement plan –and only a third of them say it is a formal one. Working with a financial professional todevelop a retirement plan would likely improve preparedness and confidence forretirement.”
Findingsbased on a 2014 survey of more than 2,000 working Americans who are householdfinancial decision-makers and aged 20 to 75.
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