NORTHBROOK, Ill., Dec. 4 /PRNewswire/ -- Baby Boomers who already feel
sandwiched between financial obligations to children and aging parents can
look forward to more of the same, plus unprecedented levels of debt for
themselves, in retirement. That is the sobering conclusion of the Allstate
Financial "Retirement Reality Check," a survey released by Allstate Financial,
a business unit of The Allstate Corporation.
According to the survey, more than one in three Baby Boomers (37 percent)
will be financially responsible for parents or children during retirement.
And 7 percent of boomers will be financially responsible for both parents and
children in retirement.
That is on top of the extensive debt that three out of five Baby Boomers
(58 percent) surveyed expect to pay off during retirement:
-- 25 percent paying credit card debt
-- 37 percent paying car notes
-- 27 percent paying a mortgage on their house
The survey also revealed that Baby Boomers have saved an average of only
12 percent of the total they will need to meet even basic living expenses in
retirement.
"Our research paints a very serious picture as far as the many obligations
tomorrow's retirees will face. But it is never too late to start planning and
saving," said Tom Wilson, president of Allstate Financial. "Partners like
Allstate Financial can help people meet their obligations, secure their
retirement, and enjoy financial independence."
According to the survey, one in five retired Baby Boomers will pay college
tuition for one or more children. Fewer than one in ten (8 percent) of the
boomers surveyed said they expect financial support from their children in
retirement, though twice as many Boomers (16 percent) said they currently
support their parents.
Baby Boomers not prepared to foot the bill
On average, those surveyed said they would need $30,000 per year for basic
living expenses during retirement. Factoring in a return on savings and
inflation, to have that, Boomers will need approximately $1 million upon
retirement. But surveyed Baby Boomers have saved only a fraction of that
amount. Any benefits generated from the Social Security fund would lighten
the savings need, but not nearly as much as Boomers would expect.
Even the $30,000 that Baby Boomers think they will need per year may be
too low, as experts agree that the cost of living will likely double over the
next 20 years. Of survey respondents, 46 percent thought that living expenses
would increase less than 20 percent over the next 20 years, and only 6 percent
agreed that the cost-of-living expenses would double.
Don't Quit Your Day Job
To defray costs associated with retirement, most Baby Boomers simply won't
retire completely. Seventy-three percent of the respondents said they will
continue to work in some capacity during retirement. And the majority of
boomers surveyed (68 percent) said they would have to save money during
retirement.
Astonishingly, despite numerous financial obligations and a massive
savings shortfall, according to the survey, 67 percent of Baby Boomers still
anticipate they will have money left over to leave as an inheritance to their
children.
"This survey is a call to action for Americans," said Wilson. "The level
of financial responsibility and obligation that this generation will face is
unprecedented. When you compare what they have saved with what they will
need, both for themselves and the others who will rely on them, this
generation is woefully unprepared."
September 11 events have not changed saving or investing habits
The survey found that despite market volatility, a possible recession, and
the likelihood of a long-term war, the majority of Baby Boomers (82 percent)
do not plan to significantly increase the amount of money they are saving for
retirement. In fact, 66 percent of those surveyed plan to make no change
whatsoever to the amount they are currently saving.
Likewise, the majority of pre-retirees surveyed (74 percent) have not made
significant changes to their investment style after September 11, as only
10 percent said they would invest much more conservatively and 3 percent much
more aggressively.
The balance of respondents said they were not sure how September 11 events
would impact their savings or investing habits.
Snapshot of Current Financial Obligations
According to the survey:
-- A third of Baby Boomers (33 percent) currently pay tuition for their
children or provide some financial support for children or
grandchildren over 18 years of age (32 percent).
-- One in six (16 percent) Baby Boomers currently assists elderly
parents or in-laws financially.
-- Of the boomers who currently fund tuition for their children as well
as save money for the future, a third (33 percent) contribute more
money to savings than to tuition, another third (30 percent) put more
aside for their children's tuition than to saving, while the
remaining third (36 percent) allocate the same amount to both.
The Allstate Financial "Retirement Reality Check" survey was created by
Allstate Financial in conjunction with Harris Interactive. Using a random
digit dialing methodology, Harris polled 1,004 people born between 1946 and
1961, with household incomes ranging from $35,000 to $100,000. The margin of
error is plus or minus 3.1 percent. For the data related to September 11,
Harris surveyed 294 respondents who met the same criteria. The margin of
error for the second sample is plus or minus 5.7%.
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 Corporation
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Related links:
http://www.allstate.com
Company News On-Call:
http://www.prnewswire.com/comp/109885.html
CONTACT:
Laura Margolis, Allstate Media Relations,
+1-847-402-5600
NOTE TO EDITORS: For interviews with Allstate Financial, copies
of the survey executive summary, or third-party resources who can
address information revealed in the study, please contact Laura
Margolis, at Allstate Financial, 847-402-5600
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