Home > All articles

Baby Boomers and Retirement: A Generation’s Catch-22 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         By K.S. Date 21-08-2007 Print this article  OTHER ARTICLES Barbara Beck : A special report on ageing   Pension savers miss out on £720 million   Critically Understanding Asian Perspectives on Ageing   Germans, French and Spanish Adults Oppose Working Past Retirement Age for Larger Pensions While American, British and Italian Adults Support Idea   China’s Long March to Retirement Reform   The 2009 Ageing Report   How to make European pensions adequate and sustainable ?   Aging in Asia: Trends, Impacts and Responses   Many Americans Still Committed to Saving and Investing for Retirement   Do Health Problems Reduce Consumption at Older Ages?