The declining economy and the aging process are making baby boomers less optimistic about retirement, according to “Baby Boomers Envision What’s Next,” a report from AARP.
Some 76 million boomers are headed toward their retirement years—the oldest turn 65 this year, AARP reports. As they approach retirement, boomers are less confident about their ability to finance their retirement with their own savings or pensions, they’re more likely to rely on Social Security, their health is declining, and they anticipate working longer for the additional income.
Although most boomers (60%) are at least “fairly optimistic” about retirement, that’s down 10 percentage points from 1998. Plus, 26% of respondents have become more pessimistic in the last five years, primarily due to the economy.
Compared to 1998, more boomers (44%) won’t be able to afford to do what they want during retirement (up 10 percentage points), 36% won’t be able to afford to retire (up 12 percentage points), and 33% will struggle to make ends meet (up 10 percentage points).
The AARP report segments boomer retirees into five segments:
1. Self Reliants (22%). This group is optimistic and affluent, and will rely on personal investments to finance retirement. Many will continue to work for the enjoyment of it.
2. Enthusiasts (10%).This group also is optimistic and affluent. It looks forward to retirement and is satisfied with its retirement savings. People in this group are most likely to be married.
3. Traditionalists (26%). Cautiously optimistic, this segment will continue to work for the money. It is favorable toward and intends to rely on Social Security and Medicare.
4. Anxious (22%). This group has lower income and education and is less favorable about retirement and finances. It is especially concerned about health issues.
5. Strugglers (20%). This is the least optimistic group, and has the lowest levels of income, education, and retirement savings. It is the most likely to have suffered job loss, serious illness, the death of a spouse, and other adverse life events.
Only 23% of boomers believe they need more information to help them prepare for retirement, down from 30% in 1998. That’s despite the fact that their knowledge of critical information may be limited—evidenced by the fact that most boomers don’t know the age at which Social Security benefits are available.
Only one third of boomers (34%) say they often discuss retirement with family or friends.
View the full survey here [pdf].