One-third of boomers aged 55 to 65, or "transition boomers," are unsure how much money they will need to cover basic living expenses in retirement, according to "The Transition Boomers and Retirement Income Survey," from Allianz Life Insurance Co. of North America. Nearly three in 10 (28%) said their biggest retirement concern is not being able to cover basic living expenses, according to the report.
"It's alarming that so many boomers on the cusp of retirement are still unclear about the basic factors which determine their ability to fund their lifestyle once they stop working," said Walter White, Allianz Life president and CEO. "When you consider rising health care costs and the devastating effects of inflation on purchasing power, the fact that so many transition boomers are still confused about retirement income planning is a significant issue which urgently demands more education. Allianz Life developed a new planning framework , specifically to help boomers tackle these challenges."
Transition boomers also are starting too late with their retirement income planning. The survey found that 43% will not focus on retirement income strategies until they are less than five years from retirement; 16% will not begin until six months to a year prior to retirement.
The majority (94%) said Social Security will play a role in their retirement income, followed by pension plans (46%), DC plans (43%) and "other investments" (30%). And 30% indicated they expect some retirement income from part-time work, while 20% anticipate income from inheritance (9%) or "other sources" (11%).
"Although many boomers say they'll work in retirement, studies show that many may have difficulty doing so due to layoffs, health issues, or the need to care for other family members," said Katie Libbe, Allianz Life VP of Consumer Insights. "When only 14% say they can count on guaranteed income from an annuity, and 20% expect an inheritance or income from 'other sources,' it's crucial for transition boomers to start thinking and talking about retirement income issues as soon as possible."
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