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Nearly
70% of Baby Boomers could go broke in
lifetime…One-Third
reconsider Retirement Age ... Most plan to
delay
CLEVELAND, Jan. 29 /PRNewswire-FirstCall/
-- The generation that said "never trust
anyone over 30" and "let it all hang out"
are now between the ages of 43 and 61 -- and
when it comes to managing their finances
they are living up to their mantras.
A recent survey by
KeyBank and Zogby International shows that
Boomers are living contradictions when it
comes to finances. They want to be in
control, but many have a laissez-faire
attitude when it comes to managing their
money.
According to the
survey, Boomers are quite confident in their
ability to plan and manage their financial
future, yet uncertain their actions will
produce the right results.
Over half (51 percent)
said they are doing financial planning, and
their goals are set and on track, yet 67
percent believe they will or could run out
of money in their lifetime.
"Given the size of the
Baby Boom generation, it is astounding they
feel this uncertain at this point in their
lives," said Marc Vosen, President of Key
Investment Services.
Eighty-two percent said
retirement planning should begin by age 30.
Asked what they are more likely to do on a
regular basis, 42 percent said they are more
likely to get a physical exam from a doctor,
25 percent are more likely to get a tune-up
from a mechanic, while only 5 percent said
they would review their finances with an
outside expert.
"Boomers have a yin
yang philosophy about their money. They view
their financial stewardship one way, but
their actions don't seem to reflect those
views," said Vosen.
"There's
conflicted confidence in what Boomers say
they are doing, what they actually are
doing, and consequently there's a real
concern about how financially prepared they
are for retirement," he said.
The survey focused on
Boomers with investable assets between
$100,000 and $500,000. Vosen said this is
the time in life when Boomers have
accumulated some money on their own and are
beginning to inherit money from their
parents.
REALITY
IS SETTING IN
When asked to describe
their current financial outlook in terms of
a Reality TV scenario, 42 percent chose
"Survivor." The balance of respondents
selected "Amazing Race," "The Apprentice",
"Fear Factor," "Extreme Makeover" and "Lost"
to best describe their situations.
Reality is beginning to
hit home and changing circumstances are
causing 35 percent of Boomers queried to
reconsider their retirement age. Of those
changing their plans, more than two-thirds
(77 percent) are delaying their retirement
date. Reasons cited for the delay include
the need for more savings (46 percent) and
concern about rising health care costs (41
percent).
FROM
PROCRASTINATION TO PROACTIVITY
One reason why
retirement may be taking a backburner is
that Boomers are more concerned with
immediate financial problems or issues.
Asked "what keeps you up at night" Boomers
place health care coverage, caring for aging
parents, job security and oil/energy costs
above saving for retirement.
It is clear that
Boomers need to do more, but there seems to
be inertia when it comes to taking action.
Vosen said Boomers are procrastinating
because financial planning sounds
cumbersome, complicated and time consuming,
but he adds, it doesn't have to be. He
offers the following tips:
1. Zero in and
balance various needs
Identify the most
important issues and utilize specialized
tools to assess them (e.g., mortgage, debt
management, education savings or retirement)
2. To visualize the
future you want, take three simple steps:
1) Estimate the number of years you plan to
live in retirement
2) Determine the
lifestyle you want to have (similar to your
life today; more simplified; more travel;
vacation home etc.)
3) Estimate the
annual income you will need to have to live
your desired lifestyle (make a monthly
budget, multiply by 12 and include some
unexpected expenses for additional security)
3. Calculate the
cost of procrastination
The cost of
procrastinating increases exponentially over
the course of only a few years. For example:
A person investing $2,000 a year between the
ages of 21 and 30 will earn $347,508 more
(by the age of 65) than one who invests
$2000 a year from the age of 30 through 65.
4. Bite the bullet
Review assets
with a financial professional to ensure the
money and investments are working as hard as
possible, now and in retirement
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