A SECOND LOOK AT THE FIRST WAVE OF BABY BOOMERS AND A NEW LOOK AT THE YOUNGEST BOOMERS SHOWS BOTH GROUPS BEHIND ON THEIR SAVINGS PLANS, ACCORDING TO METLIFE MATURE MARKET INSTITUTE® STUDY
Only 38% of Oldest Boomers are Financially Prepared for Retirement and Many Have Delayed Plans Oldest Boomers Plan to Retire by Age 66, Youngest by Age 64 — and Resist Delayed Retirement
Westport, CT, February 26, 2009
A second look at the Baby Boomers who turned 62 last year and a new look at the Youngest Boomers, now turning 45, shows 46% of the oldest group and 57% of those in the younger, vastly larger group are not saving as much as they had hoped. The two groups, part of the same generation, but with 18 years between them, are in very different life stages and do not even agree on whether or not they are Boomers.
The MetLife study entitled, Boomer Bookends: Insights Into the Oldest and Youngest Boomers, shows that in the group born in 1946, some 2.7 million Americans, about one in five have delayed collecting Social Security, and few have fully retired (19%). Only 13% have saved fully for their retirement and another 25% say they are on track to do so; a leading concern is affordable health care. About two-thirds of the Oldest Boomers remain in the work force, 50% full-time. Almost six in ten have provided financial assistance to their children and grandchildren, perhaps putting their own plans at risk. It is seen as an unexplained contradiction that a large portion (24%) say they have no concerns about retirement, across income levels.
Many in the youngest group, 4.6 million people born in 1964, would rather be described as Generation X than Baby Boomer and say they will consider themselves “old” at age 71. Their Older Boomer counterparts say 78 is “old.” They are resisting the conventional wisdom that retirement will be put off. They want to retire by age 64, but believe they will not be able to do so until age 65, though they will not be eligible for full Social Security retirement benefits until they are 67. Only 36% say their retirement savings plans are on schedule and a good deal express concern about outliving their money. This group will not rely on defined benefit pensions for their retirement income like the Oldest Boomers; they expect to depend largely on the funds in their 401(k)s. Social Security still plays an important financial role for both groups.
| How do oldest and youngest baby boomers compare? | ||
| QUESTION | OLDEST | YOUNGEST |
| How is your health? | 70% unchanged from last year. 49% report their health is excellent or very good. | Excellent or very good – 65% |
| Are you collecting Social Security? | Yes, 9% - Retirement 11% - Disability |
Plan to collect at age 64 or later |
| Do you like the word “retirement” to describe your next life transition? | 82% | 78% |
| Do you like the term “Baby Boomer” to describe people your age? | 83% | 46% |
| Are you fully retired? | 19% | Plan to retire fully at 64 |
| How many children do you have? | 2.1 children, on average | 2.0 children, on average |
| Do you have grandchildren? | 77% | 14% |
| What is your net worth, excluding home value? | $236,700 | $206,600 |
| Are you a caregiver to one or more of your parents? | 14% (23% provide more than 20 hours per week providing care) | 17% (12% provide more than 20 hours per week providing care) |
| What is your annual income? | $71,300 on average | $89,100 on average |
| How old do you consider “old” to be? | 78 years old | 71 years old |
| Have you provided/received financial assistance to/from your children/parents? | 57% say they have helped children and grandchildren, averaging $59,000 in the last 5 years | 18% say they have received financial assistance from their parents, averaging $61,100 |
“Our conclusion from this data is that the Oldest Boomers are behind in their savings and many are delaying both Social Security and retirement. The youngest group, twice the size of the oldest group, is also behind on saving, which has ramifications for the entire economy as we move through the next 20 years,” said Sandra Timmermann, Ed.D., director of the MetLife Mature Market Institute. “Our current economic downturn has impacted the Oldest Boomers, who have fewer years to recover financially, and points to the need for the younger group to build a financial safety net as they look ahead to their retirement.
“In our comparison between the Oldest Boomers first contacted in late 2007 and re-contacted late last year, we found that there are many consistencies, but not when it comes to retirement,” said Timmermann. “They continue to rate their health as good; they have remained in their own homes and they continue caring for their aging parents. However, only 15% of those who said in 2007 that they would retire in 2008, actually did.”
Methodology
The Boomer Bookends study was conducted by GfK on behalf of the MetLife Mature Market Institute during October 2008 as a follow-up to Boomers Ready to Launch, released in 2007. The 2007 study consisted of a telephone survey of 1,000 participants age 61 in 2007 who consented to be re-contacted for the follow-up survey. For those re-contacted, responses to a select number of questions from the earlier survey were compared to 2008 responses. A total of 1,072 respondents born in 1946 (Oldest Boomers) were surveyed by telephone for the 2008 study, including 562 of the 910 respondents from the 2007 study. The re-contacted group was supplemented with an additional 510 new respondents provided by Dunhill. A total of 1,000 respondents born in 1964 were surveyed by telephone. The data were weighted by demographics to reflect the total population.
The MetLife Mature Market Institute®
Established in 1997, the Mature Market Institute (MMI) is MetLife’s research organization and a recognized thought leader on the multi-dimensional and multi-generational issues of aging and longevity. MMI’s groundbreaking research, gerontology expertise, national partnerships, and educational materials work to expand the knowledge and choices for those in, approaching, or caring for those in the mature market.
MMI supports MetLife’s long-standing commitment to identifying emerging issues and innovative solutions for the challenges of life. MetLife, a subsidiary of MetLife, Inc. (NYSE: MET), a leading provider of insurance, employee benefits and financial services with operations throughout the United States and the Latin American, Europe and Asia Pacific regions.
For more information about the MetLife Mature Market Institute, please visit:www.maturemarketinstitute.com.
The full study, Boomers Bookends, is available at www.maturemarketinstitute.com under “What’s New.” To order a copy of the printed version of the study, write to: MetLife Mature Market Institute, 57 Greens Farms Road, Westport, CT 06880 or e-mail: maturemarketinstitute@metlife.com.