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In October 2006, Thrivent
Financial for Lutherans surveyed 2,500 pre-retirees, ages 45 to 64, to gauge
their retirement readiness and expectations. The survey sampled from four U.S.
regions – West, Midwest, South and East – and was weighted to reflect
the population for age, sex, race, education and household income.
With the survey, Thrivent
Financial sought to gather a more holistic view of how baby boomers feel about
retirement. Instead of focusing exclusively on financial preparedness, the survey
explored baby boomers’ attitudes toward, and aspirations for, retirement.
Thrivent Financial’s
Seven Principles for Retirement – Have a Vision, Make a Plan, Rethink
Working, Spend Wisely, Save and Invest, Protect the Future and Give Back –
provided a framework for the survey questions.
A couple of paradoxical
themes emerged from the survey:
• While boomers are
generally optimistic about retirement, with 56 percent believing that they will
have the same or an even better standard of living than their parents, only
20 percent believe they will worry less about money than their parents.
• Seventy-one percent
of baby boomers cite a lack of money as the single greatest issue that might
prevent them from accomplishing their envisioned retirement, yet most boomers
(59 percent) surveyed have not done any formal retirement planning.
• While 86 percent
stated that they would advise younger generations to start saving for retirement
as soon as possible, nearly a quarter have not taken action toward saving for
their own retirement.
With 76 million baby boomers
set to retire over the next 20 years, these startling disparities between their
ideal plans and actual retirement readiness reinforce the importance for pre-retirees
to map out their personal vision for retirement. It’s never too late for
anyone – baby boomers or others – to start saving for retirement.
Thrivent Retirement
Survey Report
Thrivent Financial for Lutherans’
October 2006 survey of 2,500 American men and women ages 45 to 64 was structured
around Thrivent Financial’s Seven Principles for Retirement, which are
Have a Vision, Make a Plan, Rethink Working, Spend Wisely, Save and Invest,
Protect the Future and Give Back.
Each of the principles
offers insight into the retirement decisions, hopes and paradoxes of baby boomers.
Titled “Thriving in Retirement,” the survey utilized these principles
to interlock the respondent’s retirement preparedness with their expectations.
The survey uncovered a generation of pre-retirees with a positive outlook on
retirement, but an inconsistent – and sometimes contradictory –
path to their golden years.
Conclusion
Baby boomers have demonstrated
that the road to retirement and the plan to actually reach a retirement destination
can be convoluted and even contradictory. Pre-retirees today envision a sound,
comfortable retirement, despite not making the crucial financial preparations
needed to accomplish that goal. Perhaps it shouldn’t come as a surprise
that more than a third of the baby boomers likened their retirement vision to
the classic Beatles anthem, “The Long and Winding Road.”
However, the more dire
Bee Gees’ song “Stayin’ Alive” came in second. Eight
percent chose The Who’s “hope I die before I get old” lyric
as their retirement vision. Despite baby boomers’ inconsistencies between
retirement planning and actual retirement readiness, they have a clear plan
about how they will spend their golden years.
While the underlying fear
of a lack of money in retirement lurks in the data, almost half of those surveyed
still seek the simple pleasures in life.
The “me generation”
moniker also may stick with boomers even in retirement. One of the final questions
on the survey asked pre-retirees what they would do with an unexpected $1 million.
Sixty-one percent stated
that they would invest it in their retirement, but only 29 percent would divide
it among family members and a paltry 1 percent would give a majority to charity.
As the boomer generation faces the probability of a longer, more active retirement,
an extra $1 million may come in handy.
Baby Boomers and Retirement:
A Generation’s Catch-22
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