Retirement Conversations Need to Start Sooner to Help Achieve Best Possible Outcomes

While more working baby boomers with pensions indicate they are more likely (56%) to retire at or before the traditional age of 65 than those without (39%), almost half of them still expect to retire with debt, according to a recent Fidelity Investments survey. Additionally, retired baby boomers receiving payments from pensions today say they should have saved earlier than they did. One in five retirees with pensions acknowledged they did no planning before retirement, with half (51%) indicating they only began planning just a year or more before retirement. 

Our research uncovered the fact that even the small population of baby boomers who actually receive a pension payout today feel they should have saved earlier than they did for their income in retirement,” said Wendy Foster, senior vice president at Fidelity Investments. “Saving more aggressively and planning well ahead of your expected retirement date becomes even more critical for the majority of Americans, particularly younger workers, without traditional pensions.


While boomers currently participating in pension plans may feel more flexibility around their expected retirement date, nearly half (48%) of all boomers – regardless of whether they expect to retire with a pension – anticipate retiring with debt from some of life’s typical demands; primarily mortgage payments followed by credit cards, car payments and student loans for either themselves, a spouse or their children.

Also, regardless of whether they have access to pension payments in retirement, seven out of 10 retired boomers said they wished they had done more to save for retirement during their working years.


More companies are offering current and former employees participating in a pension plan a lump-​sum distribution option in lieu of a future traditional annuity payout. The Fidelity study found that 63% of employed boomers would roll all of their pension assets into an IRA/401(k) if given the choice or required to take a lump sum today. Sixteen percent would roll some of it into an IRA/401(k) and use some to purchase an annuity and just six percent would purchase an annuity with the entire amount.

What to do when offered a lump sum payout is a personal decision, making it critical that individuals seek help from a financial professional to fully understand their options and the potential impact on their overall financial plan,” said Ken Hevert, vice president at Fidelity Investments.


More women report feeling confident about their retirement than in the past two years according to new findings from the 2012 New Retirement Mindscape City Pulse index by Ameriprise Financial. One in four women (24%) report feeling very confident they’ll reach their retirement goals and another 44% report feeling somewhat confident. Only 20% say they feel worried when they think about their retirement – down significantly from 25% last year. Despite this trend, the fewest number of women since the index began in 2010 report making any kind of financial preparations for this milestone (66%).

While women are as confident as men, they have some catching up to do when it comes to financial preparation. Only 44% of female respondents say they’ve contributed to a workplace retirement plan, compared to 51% of males. Ten percent fewer women than men have set aside funds in their own investments (42% vs. 52%) and only one in five (19%) have determined the amount of income they’ll need in retirement compared to 28% of males.

This lack of financial planning is especially concerning because many women face unique challenges in preparing for retirement like lower earning power and more time spent out of the workforce to be a caregiver. Women also tend to live longer than men; the average life expectancy for American women is about 80 years (compared to 75 years for men), yet 24% of women underestimate the years they’ll need to tap into their retirement funds, saying that they plan to live from their savings for only ten years or less.

To learn more about Baby-​Boomers, check out the Audience Interests & Intent report available on the Research Store at ad​-ology​.com.

[Source:  Survey conducted by Fidelity Investments.  6 Dec. 2012.  Web.  6 Dec. 2012; "2012 New Retirement Mindscape City Pulse index."  Ameriprise Financial.  5 Dec. 2012.  Web.  6 Dec. 2012.]