Something to Keep in Mind as Busiest Shopping Day Approaches
NORTHBROOK, Ill., Nov. 26 /PRNewswire-FirstCall/ -- Baby Boomers who don't
think they are saving enough for retirement may want to think twice before
racking up those extra charges on their credit cards on the busiest shopping
day of the year. According to the second annual Allstate "Retirement Reality
Check" survey, 59 percent of those Baby Boomers surveyed carry credit card
balances, and 28 percent believe they will have outstanding credit card
balances in retirement as well.
And while the vast majority of surveyed Baby Boomers (84 percent) are
currently saving for retirement, and 69 percent believe they know how much
they will need for retirement, many admit they may fall short of their
retirement goals. According to the survey, the number of Baby Boomers who are
concerned that they will not have enough money to last throughout retirement
rose from 29 percent in 2001 to 53 percent in 2002.
To compensate for their savings shortcoming, 76 percent of survey
respondents expect to continue to save money during their retirement. And 71
percent anticipate they will never completely retire. Of those, 47 percent
cite necessity as their reason for continuing to work.
"Those who keep spending under control during the holiday season are
generally those with a plan," said Peggy Dyer, senior vice president of
strategy and marketing, Allstate Financial, a business unit of The Allstate
Corporation. "A financial professional can show individuals how they can
enjoy today without running up debt that may threaten their future retirement
security."
Holiday spending -- a cause for pause
Excessive credit card debt -- before and after retirement, at holiday time
or anytime -- can lead to even larger financial problems. Research by the
Federal Reserve indicates that household debt is at a record high relative to
disposable income and some analysts are concerned that this unprecedented
level of debt might pose a risk to the financial health of American
households. According to the Federal Reserve, more than 400,000 Americans
filed for personal bankruptcy in the second quarter of 2002 -- an increase of
more than eight percent over the same period in 2001. And the national
balance on credit cards and auto loans rose to a record level of
$1.73 trillion as of September.
Shop 'til They Drop
But this mountain of debt has not dampened Baby Boomers' spending plans.
In addition to paying credit card debt, 59 percent of surveyed Baby Boomers
will spend their retirement paying other large bills, with 36 percent making
car payments and 27 percent continuing to pay a mortgage. Currently,
56 percent of those surveyed owe car payments and 71 percent are paying
mortgages.
And that's not all. Surveyed Baby Boomers expect to spend significantly
on luxury goods during retirement, with 68 percent planning to purchase at
least one big-ticket item, up from 56 percent in last year's survey.
Specifically, those surveyed plan to splurge on the following:
-- Forty percent intend to purchase a new car, up from 27 percent in 2001
-- Twenty-seven percent expect to buy a new computer, compared to 18
percent last year
-- Sixteen percent plan to purchase a recreational vehicle -- more than
double last year's response of seven percent
The second annual Allstate "Retirement Reality Check" survey was created
by Allstate Financial in conjunction with Harris Interactive. Using a random
digit dialing methodology, Harris polled 1,400 people born between 1946 and
1961, with household incomes ranging from $35,000 to $100,000. A sample of 200
African-Americans and 200 Hispanics were interviewed as part of the total
sample surveyed. The margin of error is plus or minus 3.1 percent for the
general population, and plus or minus 6.9 percent for information specific to
Hispanics and African-Americans.
The Allstate Corporation (NYSE: ALL) is the nation's largest publicly held
personal lines insurer. Widely known through the "You're In Good Hands With
Allstate(R)" slogan, Allstate provides insurance products to more than 16
million households and has approximately 12,500 exclusive agents and financial
specialists in the U.S. and Canada. Customers can access Allstate products
and services through Allstate agents, or in select states at allstate.com and
1-800-Allstate. Encompass(SM) and Deerbrook(R) Insurance brand property and
casualty products are sold exclusively through independent agents. Allstate
Financial Group includes the businesses that provide life
insurance, retirement and investment products, through Allstate agents,
workplace marketing, independent agents, banks and securities firms.
SOURCE Allstate Corporation
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CONTACT:
Laura Margolis of Allstate Media Relations,
+1-847-402-5600
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