Allstate Financial's Cost Of Leisure Index Reveals What Baby Boomers Want,
And What It Will Cost
NORTHBROOK, Ill., Feb. 20 /PRNewswire-FirstCall/ -- Baby Boomers are
gearing up for a retirement that will be more than just rest and relaxation,
according to the first ever Cost of Leisure Index, compiled by Allstate
Financial and released today.
The Cost of Leisure Index, part of the Allstate Financial Retirement
Reality Check survey, rates Baby Boomers' most desired retirement activities
and the amount they intend to spend on them. The survey found that the
majority of Baby Boomers (63 percent) feel retirement will be the best years
of their lives. Eighty-two percent of surveyed Baby Boomers believe that
their retirement will be more fun and rewarding than their parents', and
65 percent believe their retirement will be more active.
"Baby Boomers are looking forward to an active retirement, full of the
leisure pursuits that they currently enjoy today," said Tom Wilson, president
of Allstate Financial, a business unit of The Allstate Corporation. "In fact,
while in many instances surveyed Baby Boomers were accurate in estimating the
costs for their favorite activities they are still not saving enough money to
actually enjoy what they told us they want to do during retirement."
The top activities identified in the Allstate Financial Cost of Leisure
Index, and annual costs for each as estimated by surveyed Baby Boomers and
industry experts, are as follows:
Rank Activity in Retirement Surveyed Boomers' Industry Estimates
Average Annual
Estimated Spending
1 Traveling $7,700 $7,741
2 Family activities $3,900 $3,924
3 Hobbies $2,200 $827
4 Gardening $1,500 $762
5 Fishing $2,700 $1,160
6 Golfing $3,500 $4,140
7 Volunteering $2,000 $2,539
8 Reading $900 $545
9 Exercising $1,500 $1,479
10 Home improvement $7,000 $1,904
Fun and games
The first-ever Cost of Leisure Index revealed that surveyed Boomers
anticipate spending approximately $10,900 a year on having fun during
retirement. When Baby Boomers are ready to retire, more than half of the
survey respondents (55 percent) cited travel most frequently as their top-
rated retirement pursuit. On average, Baby Boomers said they would take four
trips per year, and spend about $7,700 on travel annually. Estimates from
various associations and trade groups representing these top-rated activities
were identified to determine how they compare with the survey results.
"While Baby Boomers know what they want to do in retirement, and in most
cases have a realistic estimate as to the cost, the Retirement Reality Check
survey found that there is a fundamental disconnect between what middle-income
Americans expect out of retirement and what they'll get if they don't get
help," said Wilson. "Baby Boomers have terrific enthusiasm and vision when it
comes to making their retirement the best it can be, and part of that vision
should be a program to accelerate their savings, make a commitment to their
future, and realize the rewards of their work."
Funding the Fun
Knowing how much something costs does not mean it is affordable. Survey
respondents said they would need $40,900 per year in retirement, to cover the
cost of their top-rated activities and basic living expenses. To have that,
the average Boomer will need to have more than $1.2 million at the beginning
of a 20-year retirement, factoring in a return on savings and inflation.
But surveyed Baby Boomers, on average, have less than $120,000 in assets -
not even a tenth of the amount they say they will need when they retire in the
next 10 to 20 years. Any benefits generated from the Social Security fund
would lighten the savings need, but not nearly as much as Boomers would
expect.
Allstate Financial's Cost of Leisure Index, compiled as part of the
Allstate Financial "Retirement Reality Check" survey, was created by Allstate
Financial in conjunction with Harris Interactive. The Index is a weighted
average reflecting the frequency that survey respondents chose various
activities as their top choices. Using a random digit dialing methodology for
the survey, Harris polled 1,004 people born between 1946 and 1961, with
household incomes ranging from $35,000 to $100,000. The polling took place in
July 2001. The margin of error is plus or minus 3.1 percent.
Allstate Financial Group is a business unit of The Allstate Corporation
(NYSE: ALL), representing the affiliates that provide life insurance,
retirement, investment and health and disability insurance products. Allstate
Financial is the marketing name for Allstate Life Insurance Company, its
subsidiaries and certain affiliates. Widely known through the "You're In Good
Hands With Allstate(R)" slogan, Allstate Financial can help its customers
achieve a secure financial future with a broad array of retirement solutions.
Allstate Financial is also a premier provider of variable annuities and long-
term care insurance. In addition, through workplace marketing, Allstate
Financial offers life, health and disability insurance through employee
payroll deductions. Customers can access Allstate Financial products and
services through approximately 60,000 financial professionals, including
Allstate agents, independent agents, and banks and securities firms.
SOURCE Allstate Financial Group
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