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Baby Boomers Not
Getting the Retirement Message
ING survey, "Boomers Still on the Brink," shows Boomers
remain ill-prepared for retirement
HARTFORD, Conn., Sept. 8 /PRNewswire-FirstCall/ --
Key Survey Findings:
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Baby Boomers are spending less time on
financial planning -- with most spending little to no time on it.
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While Baby Boomers recognize retirement is now
further away than they hoped, most hope to retire at 62.
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Of respondents who have changed jobs, 22
percent cashed out their retirement plans.
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Women respondents feel much less confident
about their retirement planning than men, and more women
than men believe they will be worse off in retirement than they are now.
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While younger respondents (ages 35 to 44) are
significantly more confident than older Boomers that
they will be better off in retirement, they are less likely to
seek financial advice from professionals and are more likely to
state they "live beyond their means."
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On a positive note... A majority of Baby
Boomers stayed the course in the past two years, contributing
the same or more to their employer- sponsored retirement plans.
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Despite the floundering economy, a dismal job market,
war in Iraq, and the
events of Sept. 11, a significant number of Baby Boomers have not heeded
the
warnings about preparing for their retirement. According to the
national
survey, "Boomers Still on the Brink," a follow-up to research
conducted in
2001 by ING, many Boomers remain ill prepared for their golden years, and
a
significant number are in worse financial shape than they were two years
ago.
ING, a leading provider of retirement plans in the
United States, serving
approximately 2.3 million participants in more than 34,000 plans,
interviewed
500 people between the ages of 35 and 55 for the survey.
"Our survey found that the events of the past two
years seem to have put
many Baby Boomers in a perpetual stall when it comes to planning for their
retirement," said Thomas J. McInerney, CEO of ING U.S. Financial
Services. "Many Boomers have a 'glass is half-full' mentality, which is
certainly
admirable, but the reality is that for many, they are not prepared."
Close to two-thirds (62 percent) of Baby Boomers said
they spend one hour
or less on retirement planning activities -- such as checking their
existing
investment portfolios and talking with a professional advisor -- in a
typical
month. One in three (32 percent) said they don't spend any time on
such
activities. This compares to 44 percent of respondents in 2001 who
spent one
hour or less on planning and 12 percent who didn't spend any time.
McInerney called this lack of attention to financial
planning "truly
disturbing" and once again explained that regardless of age or
financial
situation, most people should be guided by three rules when retirement
planning:
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Pay yourself first
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Force yourself to not take anything out of your
long-term savings
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Be disciplined in how you choose to spend money
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A Longer Retirement Road
The "Boomers Still on the Brink" survey
suggests that while Baby Boomers
are not oblivious to their financial situation, many haven't significantly
altered their retirement preparations over the past two tumultuous
years. In
2003, respondents said they expect they'll be financially secure enough to
retire when they are 62, which is almost seven years longer than they
would
like to be working. In 2001, respondents expected to be able to
retire by age
60, just four years more than they would like.
"Boomers are finally realizing that they will have
to work longer than
they ever thought," said McInerney. "They are beginning to
understand that
they may not be prepared for retirement and have to recover financially
from
the economic downturn. The statistics, however, point to people
needing to
work even longer."
More than half (56 percent) of those surveyed believe
that when they
retire, they will be in about the same financial situation as they are
now.
Slightly more think they will be financially better off than they are now
(23 percent) compared to those who think they will be worse off then they are
now
(18 percent). Two years ago, more than half (52 percent) said they
would be
about the same; however, more were optimistic about being better off in
retirement (30 percent) and fewer felt they would be worse off (14
percent).
Ability to Retire
"Boomers Still on the Brink" shows that half
of respondents (50 percent)
in 2003 said they feel comfortable and under control regarding their
financial
preparations for retirement, and 55 percent gave themselves an
"A" or "B"
grade on their preparation. Yet, when asked if they had an
emergency, how
long they could maintain their standard of living without tapping into
long-
term savings or retirement plans, half also said they wouldn't last more
than
six months.
In 2001, Baby Boomers had an even more favorable
opinion of their planning
skills with 61 percent ranking themselves "A" or
"B." But, nearly 50 percent
also said they wouldn't last more than six months if faced with an
emergency.
In 2003, Baby Boomers said they would prefer to consult
a professional
financial advisor (74 percent) for reliable advice and information on
retirement planning decisions more than consult anyone else. Friends
and
relatives (56 percent) were the next most sought consultants, and
accountants
(52 percent) rounded out the top three.
Yet, while three-fourths say they would consult a
professional, only two-
thirds (66 percent) have actually consulted a professional for advice.
It's Not All Bad -- Many are Saving
On a positive note, the large majority of Baby Boomers
surveyed
(83 percent) said they have an employer-sponsored retirement plan, while
nearly half have an IRA (46 percent). And, more than half of
respondents
(54 percent) said they are relying on their employer-sponsored plan as
their
largest source of retirement income.
More encouraging news: A majority of the Baby
Boomers "stayed the course"
and contributed the same or more to their employer-sponsored retirement
plan
over the past two years, with 47 percent not changing their contributions
and
35 percent increasing the percentage of income they contributed.
Very few (5
percent) decreased the percentage of contribution, and just 3 percent
cashed
out.
Baby Boomers in the moderate income category ($50,000
to $75,000) are more
likely to rely on Social Security and less likely to rely on their
employee-
sponsored retirement plans than those with incomes of $75,000 to $125,000.
Other findings in the survey:
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Women feel much less confident about their
retirement planning than men. Forty-three percent of
women said they are comfortable with their retirement planning, compared to 58
percent of men.
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More women than men believe they will be worse
off in retirement than they are now (25 percent vs. 10
percent).
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Younger Boomers (ages 35-44) are more confident
that they will be better off in retirement than older
Boomers (32 percent vs. 14 percent).
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Younger Boomers are more likely than their
older counterparts to say that "living beyond their
means," (32 percent vs. 17 percent) and "lack of time" (34 percent vs. 16
percent) are reasons they grade themselves low in financial preparation.
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Young Boomers are more likely than their older
counterparts to consult friends and relatives (65 percent vs.
47 percent).
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On average, men spend more time per month on
financial planning than women (4 hours vs. 2.5 hours).
Baby Boomers with children over age 18 spend more time than respondents with
no children over age 18 (4.3 hours vs. 2.3 hours).
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Of those who feel they are doing an
above-average job in retirement planning (rating themselves an
"A" or "B"), two-thirds (64 percent) say "planning early" is the
key. Half or more say "living modestly" (56 percent), "investing
wisely" (56 percent), and "self-discipline" (50 percent) were reasons they feel
prepared.
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Both "bulls" and "bears"
are cautiously optimistic on predictions for the stock market for the next
year. Thirty percent said it would stabilize, 46 percent said it would
increase slightly, and 5 percent said it will increase
dramatically. Another 12 percent expected the stock market to decrease slightly (9
percent) or dramatically (3 percent).
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The "Boomers Still on the Brink" survey was
conducted in July 2003 by the
research firm, KRC Research. The survey of 500 respondents included
people
ages 35 through 55 with annual household incomes between $50,000 and
$125,000.
Those surveyed were predominantly Baby Boomers born between 1945 and 1964.
The poll's margin of error was plus or minus 4.4 percentages points at the
95 percent confidence level.
About ING
ING Groep N.V. (NYSE: ING)
is one of the largest integrated financial
services companies in the world, providing insurance, banking, and asset
management products. The company strives to provide an innovative, client-
focused approach to its financial products and services through strategic
global distribution channels. In the U.S., ING offers a comprehensive
array of
financial services to retail and institutional clients that includes
retirement plans, mutual funds, managed accounts, alternative investments,
direct banking, institutional investment management, annuities, life
insurance, employee benefits, financial planning, and reinsurance.
Currently,
ING holds top-tier rankings in key U.S. markets and serves over 14 million
customers across the nation. Globally, ING serves over 65 million private,
corporate, and institutional clients throughout 60 countries. For more
information, visit http://www.ing.com
.
Media Inquiries:
Phil Margolis
Barb Hemberger
ING U.S. Financial
Services Weber Shandwick for ING
860-723-4783
952-346-6232
margolisp@ing-afs.com
bhemberg@webershandwick.com
SOURCE ING Americas
Web Site: http://www.ing.com
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