Who Will Still Feed Them When They’re 64?
BALTIMORE – Retirement was for squares when baby boomers were young. Love you when you’re 64? We don’t even trust anybody over 30, they said.
But now many of the cool kids are thinking of nothing but retirement, the subject of the Retirement Industry Conference starting today in Baltimore with about 300 attendees. The event is co-hosted with the Society of Actuaries.
In an era when pensions are as old-fashioned as plaid bell bottoms, four in 10 boomers have less than $100,000 saved for retirement; one quarter has less than $25,000, according to LIMRA. With 10,000 boomers hitting 65 every day, it is a mystery who will feed them once they are past 64.
David Levenson, who is scheduled to address the conference Thursday for the first time as LIMRA/LOMA’s CEO, said although the current situation looks dire, he sees some promising trends.
“Some positives from our data would tell you that 77 percent of Americans believe that paying for retirement is their responsibility. So that has been a nice evolution as we think about people relying on the pension plans and Social Security,” he said, adding that the recognition is also throwing a stark light on retirement readiness. “That being said, 70 percent of preretirees are still nervous about whether or not they'll going to have enough funds. While they believe it's their responsibility, they're still concerned about whether they saved enough.”
That is where the insurance and financial industries can step in, Levenson said. The answers are not simple because the problems are not simple.
“It's complicated,” he said, positing the average mindset. “‘I've got a pool of money and I've got to think about saving for retirement; I've got to think about what happens if I become disabled; I've got to think about, gosh, I've got bills I have to pay today. And I've got to think about my kids and their education. I've got to think about premature death. I've got to think about all of this stuff.’”
The absence of pensions throws retirement anxiety in the mix with all the other concerns. Although we have more choices these days, including in how we save for retirement, each of those choices is its own strand of anxiety.
“Our lives have in some ways become simpler and in some ways our lives have become more complicated,” Levenson said. “But those individuals who work with a financial advisor and their financial readiness as compared to those that don't and the difference is significant.
LIMRA research shows people who work with an advisor to create a formal retirement plan are twice as likely to have taken the steps to prepare for retirement. That includes taking steps such as estimating their expected income and expenses in retirement, and assessing how many years their assets will last. Only about a third of preretirees and retirees have a formal retirement plan.
And the challenge is only going to get more difficult.
“One thing that jumps out to me is that, in 15 years there's going to be more 72 million retirees in the Unites States which means our country is going to have more Americans over 65 than under 18,” Levenson said.
The research shows that people who save early and work with a professional are ready for the retirement they want. How to help them do it is what this conference hopes to answer.
“That's a big challenge,” Levenson said. “It's way broader than just our industry. It's a big challenge for our country. Trying to find ways to discipline individuals to save early, to invest prudently, those are things that we've got to get better at.”
Steven A. Morelli is editor-in-chief for InsuranceNewsNet. He has more than 25 years of experience as a reporter and editor for newspapers and magazines. He was also vice president of communications for an insurance agents’ association. Steve can be reached at [email protected].
© Entire contents copyright 2019 by InsuranceNewsNet. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.
Steven A. Morelli is a contributing editor for InsuranceNewsNet. He has more than 25 years of experience as a reporter and editor for newspapers and magazines. He was also vice president of communications for an insurance agents’ association. Steve can be reached at [email protected].
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