Poll Finds Boomers Less Optimistic About Retirement

All along it was assumed that Baby Boomers would do retirement differently than their parents. A new survey suggests that's true, not because of any sense of independence but out of economic circumstances.

First, Boomers might not have saved all that much money for retirement. Second, the Great Recession hit at just the wrong time for many who were contemplating an early retirement. As a result, a survey by Allstate and the National Journal shows 68 percent of Boomers say they expect to keep working, in some form, past the traditional retirement age of 65.

About 50 percent of them say they'll keep working out of economic necessity. Only 11 percent of current retirees report they have jobs.

Impact of the Great Recession

"The impact of the recession on the middle class is larger than past recessions. Not only is long-term unemployment at record levels, but Baby Boomers now say they will have to retire six years later than previous retirees," said Thomas J. Wilson, Allstate chairman, president and chief executive officer. "Sandwiched between the happily retired and the optimistic young, these near-retirees feel the pain of their declining home values and retirement savings and expect to work until 66 years of age. This profound decline in Baby Boomers' retirement expectations has significant public policy and private market implications."

The poll found that people nearing retirement have different expectations about the sources of their retirement income and their financial security in retirement than current retirees. Both groups express a similar reliance on Social Security: 68 percent of retirees say it is a major source of income; 62 percent of near-retirees expect it to be.

Pensions less of a factor

However, more than half of current retirees cite a pension as a major income source, while only 37 percent of near-retirees expect the same. Meanwhile, 34 percent of near-retirees expect part-time work to be a major income source, while only 8 percent of current retirees report part-time work due to economic necessity.

While 79 percent of current retirees say they're confident about their retirement security, only 67 percent of near-retirees say the same.

"For those approaching retirement, the sense of security expressed by many of today's retired seniors looks like a ship that is sailing beyond reach," said Ronald Brownstein, editorial director of National Journal Group. "This survey captures a palpably greater degree of anxiety among near-retirees – families that have been exposed more directly to the battering of the job, housing, and stock markets."

401(k) funds not that significant

Despite the wide-spread availability of 401(k) retirement plans in the last two decades, only 39 percent of near-retirees expect these tax-deferred funds to be a major source of retirement income. Perhaps because of that, only 25 percent say they expect their retirement to be more comfortable than their parents'.

Also no surprise, near-retirees overwhelmingly support Medicare in its present form, as opposed to a voucher system recently floated by some House Republicans.