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Data & Research June 10, 2008
Boomers Not Following in Parents’ Footsteps
Baby Boomers are failing to follow the retirement planning disciplines that enabled their parents to achieve a satisfying retirement, according to a new study by NAVA, the Association for Insured Retirement Solutions.
Reported by Ellie Behling and Rebecca Moore
One reason for that could be that Boomers have a less positive view of their parents’ retirement than their parents have, according to a NAVA press release. Sixty-four percent of Baby Boomers categorized their parents’ nest eggs as “modest” or “quite small.” Only 37% of Boomers surveyed said they would be very satisfied with their parents’ lifestyles, and the majority of the Boomers surveyed expect a different lifestyle; with 86% of those respondents expecting it to be better than that of their parents.
Among retired parents of Boomers, most attributed their retirement success to the avoidance of credit card debt (81%), the creation of an emergency fund (86%), and their ability to save enough for retirement (79%). Baby Boomers are not doing as well in these departments.
So far, 57% of Boomers reported success in avoiding credit card debt—24 percentage points less than their parents’ responses. Less than half (44%) of Boomers said they have done a “good job’ saving for retirement. Only 32% of Boomers said they did an “excellent job’ creating an emergency fund.
More Adventurous
However, the study suggests Boomers possess a more adventurous attitude toward retirement investments, which could be to their benefit. The majority is willing to consider new financial products, including annuities, to help them meet their retirement goals, NAVA said.
More specifically, 76% of Boomers expect to invest more aggressively than their parents have done in retirement, and two-thirds expect to differ in their willingness to use new types of financial vehicles, with half saying guaranteed lifetime income annuities provide an “attractive’ option.
Generational Differences in Retirement Planning (GDRP): Adult Children of Retired Parents surveyed more than 1,000 people age 45 to 65 about their expectations for retirement and the experiences of their retired parents. The study compared those findings with a survey of 100 retired people age 70 to 80 regarding their views on retirement as compared with that of their adult children.