The coronavirus pandemic has derailed millions’ of people’s routines, incomes, and plans for the future. For the younger generations, saving for retirement was difficult enough. But according to a recent survey from Charles Schwab, it’s business as usual for Baby Boomers.
Despite months of rampant unemployment, financial insecurity, and volatility, many feel just as confident that they won’t only meet their retirement goals but enjoy the lifestyle they prepared for.
Charles Schwab surveyed older Americans between 55 and 75, with an average savings of $920,400, who expect to live on $135,100 each year. The firm found that most assume their standard of living will be higher than the preceding and subsequent generations.
82% think their savings are enough to bring them “all the way” or “most of the way” to their retirement dreams, while over 80% believe they will have a more satisfying lifestyle than their children.
Moreover, the pandemic failed to change over 75% of Baby Boomers’ retirement priorities. According to the study, 97% intend to focus on their health and fitness, 95% want to spend more time with loved ones, while 93% want to enjoy time at home. More than 19% of those surveyed said the pandemic financially affected them or their spouse.
Rob Williams, a certified financial planner and the firm’s vice president of financial planning and retirement income, said, “Boomers in this study have been saving for retirement and are confident, but for many there’s a potential gap between what they have saved and the retirement they’re envisioning. The reality is that they may come up short considering an average savings of $920,400 will only last about seven years at their expected spending rate.”
“The good news is that these Boomers may have other sources of income like Social Security, but the only way retirees can be sure the math adds up is by putting pen to paper and having a plan in writing,” he added.
Interestingly, the findings also indicate the various outlooks among older Americans who are nearing retirement, those who retired within the last five years, and those who retired more than five years ago.
33% of those approaching retirement said they will probably still work, versus 2% of current retirees. Similarly, older adults closing in on retirement also believe they will work longer relative to their retired counterparts — with the average respondent planning on retiring at 66 compared to current retirees who left the workforce at 59.
“As Boomers who have yet to retire think about winding down from their decades-long careers, many of the traditional senses of ‘retirement’ don’t apply today—their needs and wishes are diverse and for many, a hard stop at 65 just doesn’t sit right,” Williams observed.
He continued, “No matter what their dream retirement may look like, it’s important for rising retirees to think about how they may need to boost their savings or adjust their portfolio, when it may be the right time to start taking Social Security and how to plan for future health care costs. Answering these questions can help make the transition to retirement smoother.”
- “Most Boomer Investors Are Confident About Their Retirement Despite Pandemic and Market Uncertainties.” Most Boomer Investors Are Confident About Their Retirement Despite Pandemic and Market Uncertainties | Charles Schwab, 14 Oct. 2020, pressroom.aboutschwab.com/press-releases/press-release/2020/Most-Boomer-Investors-Are-Confident-About-Their-Retirement-Despite-Pandemic-and-Market-Uncertainties/default.aspx.
- Murphy, Coral. “Baby Boomers Believe They Will Have a Better Retirement than Their Parents, Kids, Survey Finds.” USA Today, Gannett Satellite Information Network, 14 Oct. 2020, eu.usatoday.com/story/money/2020/10/14/retirement-plan-boomers-remain-confident-retirement-despite-pandemic/3650350001/.