Boomers say they'll need to put off retirement due to recession losses

by Jim Sloan

Baby boomers making between $25,000 and $75,000 annually say they will be delaying retirement for at least five years because they don't have enough in their savings accounts to afford it.

A study by the Bankers Life and Casualty Company Center for a Secure Retirement found that two-thirds of middle-income boomers expected to have more money in their investments, money market accounts or savings accounts, and fewer than one in four boomers feels they are on target with their retirement savings accounts. Three out of four of those surveyed expect to work in their retirement.

It's not too late to start saving

Bankers Life and Casualty provides retirement planning, and the study was used to send the message to potential clients that it's not too late to aggressively begin saving more for retirement. The report notes that the recession that decimated people's wealth occurred before many baby boomers retired, giving future retirees time to make adjustments.

One in seven of the 500 people surveyed for the study have no retirement savings account at all, and 55 percent have saved less than $100,000. That's about a sixth of what many feel they'll need to maintain their current lifestyle in retirement.

The survey revealed a deep current of anxiety and uncertainty. One in seven people surveyed believe they'll never be able to retire, yet 64 percent of those surveyed are worried they'll be forced to retire because they will lose their job or develop a disabling health problem.

Warnings about Social Security

This new study came out about the same time that the Social Security Board of Trustees warned Congress that in 25 years Social Security will only be able to cover 77 percent of all the benefits due recipients. Meanwhile, more than half of those planning to retire in 25 years are counting on federal funds to be their primary source of retirement income. The board told Congress that current Social Security Trust Funds will run out in 2036. The board said in its annual report to Congress that a $6.5 trillion infusion will be needed to cover all scheduled benefits.

The message for those contemplating retirement is to pay more attention to savings accounts, money market accounts, CDs, investments, annuities, mutual funds and private defined benefits programs to ensure a comfortable retirement without too much reliance on the federal government.

The Bankers Life and Casualty study comes on the heels of other studies showing that people are putting off retirement due to recession-related losses in investments and real estate. An Insured Retirement Institute study found that more than 40 percent of Americans between 50 and 65 believe Social Security will be a major income source during retirement while about the same percentage of people said it will be a minor source. A recent Associated Press/LifeGoesStrong.com survey found that nearly half of baby boomers between 45 and 65 aren't confident they have the resources they need for a comfortable retirement.

Disclaimer:This content is not provided or commissioned by American Express. Opinions expressed here are author's alone, not those of American Express, and have not been reviewed, approved or otherwise endorsed by American Express. This site may be compensated through American Express Affiliate Program.

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