Those aged 55 to 74 are referred to as the baby boomer generation and a recent survey shows that this group who are now nearing or in retirement are on the large, unprepared for the event.
Are you a baby boomer? Are you concerned how you will afford to support yourself in retirement?
40% not started saving for retirement
Some startling facts emerged from the BlackRock Global Investor Pulse Survey relating to baby boomers and their retirement plans.
40% of this age group surveyed had in fact not started to save for retirement yet, despite it being around the corner and a huge 66% (two thirds) are aware that the State Pension will not provide sufficient income.
Almost 60% have concerns about the comfort of living they can expect following a lack of focus on retirement planning.
Lack of knowledge in this area
Retirement planning is complex, which is why working with a financial adviser helps. This was not a norm though during the working life of a baby boomer, so most have a serious lack of knowledge and understanding of what to do now the time has arose … and for some it is too late.
81% of respondents don’t know how to access their pension income. Do you need help understanding the pension system?
The Pension Reform – what choice will you make?
The new Pension Reform offers pensioners more flexibility to draw their pension.
- 9% have said they would reinvest the funds
- 8% have suggested they will move their money to a cash savings account
- 28% are undecided
- 26% will continue investing in their pension and use withdrawals to buy an annuity
- 6% will clear debt
- 3% will spend their funds
This means as many as one in five will utilise the new pension freedoms to reinvest their money.
Unfortunately, there has been little faith in pension planning over the last decades, partly due to a lack of education but 50% of respondents agreed they would have been more inclined to invest into a pension had the government provided a more stable system that didn’t change so regularly when governments changed.