The Insured Retirement Institute released a new study this week that found baby boomers’ confidence in retirement continues to decline, following a trend that began in 2011. The percentage of baby boomers who had strong amounts of confidence in their financial planning sank from 44% to 35% in the past three years. However, IRI also found that there were some small improvements in other crucial measurements, such as the amount of Boomers who have retirement savings, the total amount of these savings, and the percentage of Boomers with retirement goals.
“One of the most striking developments since we began this research series is the decline in Boomers who did not know when they would retire,” says Cathy Weatherford, President and CEO of the IRI. “That number has been cut in half. While the research shows that they are deciding to retire later in life, the important thing is that they are grappling with important aspects of retirement planning and beginning to develop a clearer picture of where they are and where they intend to be.”
According to Principal Financial Group, 10,000 Boomers retire every day as the generation continues to age out, a trend that’s expected to continue for the next 15 to 20 years. This means that by the 2028, a massive portion of the 76 million Boomers–24% of the U.S. population–will have retired.
The rate at which Baby Boomers retire won’t only affect the field of employment, but could also have ripple effects, impacting industries such as the real estate market.
“I don’t think this will affect the market here in Florida,” explains Frank Vigliotti, Realtor and Co-Founder of the Henri Frank Group. “I think that we have opportunities for 55 and older housing, especially in South Florida. In most cases, 55 and older housing can be purchased upwards of 30% less than housing purchased by people under the age of 55.”
The Employee Benefit Research Institute conducted a similar study last month that had more optimistic results, though. Maggie Dietrich of Voya Financial said the two studies’ differences reflected the fact that IRI’s study was focused solely on Boomers, who have a much more urgent situation in regards to financial planning.
“It makes a difference to take some steps to figure out what that [retiree’s] goal is,” says the co-director of the EBRI Center for Research on Retirement Income Nevin Adams. “In fact, they’ll find if they take some steps to do some sort of retirement planning, either by themselves or with an adviser, they will feel better about the situation even if they end up setting higher goals.”
Though the Baby Boomer Generation’s confidence in the future has sunk, some optimism is beginning to show, as 42% expect for things to improve within five years, which is a nine percent increase from 2013.
Though things may not look as good now, it doesn’t mean that the situation won’t improve.