Financial Anxiety Still Plagues Middle-Class Boomers Nearing Retirement

Living longer may have its rewards, but it also keeps middle-class boomers anxious about their retirement security. 

Declining health and the ability to create a sustainable retirement income were two primary concerns among boomers, according to a report from Bankers Life and Casualty Company Center for a Secure Retirement.

Declining health was found to be the number one longevity concern for middle-income Americans, nearly four times more than inadequate savings (10%) or outliving their money (9%).

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The study, Longevity Risk and Reward for Middle-Income Americans surveyed 500 individuals ages 55-75 with an annual household income raining between $25,000 and $75,000. 

While more than half (55%) of boomers have saved less than $100,000 for retirement, 19% have saved less than $10,000, according to the findings.

This adds to the study’s findings that nearly two-thirds, or 62%, of pre-retirees report some level of anxiety about retirement—with 28% reporting being “anxious” or “very anxious.”

For this reason, according to the study, it is not surprising that three out of four (75%) middle-income boomers expect to work in retirement, however, simply working longer may not be the answer to the longevity risk dilemma. 

Since no one can predict how long they will live,—as unexpected illnesses or accidents can threaten employment in later years—assessing longevity can be an effective tool in planning for retirement.

To compensate for the possibility of outliving their savings, boomers have planned a number of ways to deal with shortfalls in retirement income, including a reduction in spending (63%); getting a part-time job in retirement (41%); and selling their home (25%).

The study does have a silver lining after all, as the majority of today’s middle-income Americans are living within their budgets. About 70% of the study’s respondents reported living comfortably within their budget, with only 9% admitting to living beyond their means.

However, this present-day confidence may not last.

About 44% admit that their retirement savings may not last until the end of their life, yet when it comes to developing a savings goal, only 21% of middle-income retirees and pre-retirees have calculated a monthly retirement income goal number. 

“Realistically assessing longevity can be a powerful tool in planning for retirement,” said Chris Campbell, vice president of marketing and business development at Bankers Life and Casualty Company. “Set a clear retirement goal and be realistic about the amount of savings it will take to be able to live the retirement lifestyle you desire.”

All of these factors suggest that most middle-income Americans should apply some disciplined planning to overcome retirement financial anxieties, however, that does not seem to be the case, according to the study.

Written by Jason Oliva