Boomers:  Unaware.  Unprepared.

We have been researching Baby Boomers for quite some time now and one of the scariest things we’ve come across is that it seems many Boomers are like an Ostrich with its head in the sand.

According to Money Marketing news, 26 March 2009, research conducted by Hartford Life (UK Financial Planning Company), 43% of Baby Boomers are in denial on the effect of credit crunch and its impact on retirement planning. 23% understand that they are impacted but they are confused.

So combining the two, 66 % of Baby Boomers are in denial or confused about what to do. That is a huge statistic…

According to MGI Research, two-thirds of the oldest boomers are financially unprepared for retirement, and many are not even aware of their predicament.

The low savings rate and extensive liabilities of the boomers have left about two-thirds of them unprepared for retirement.  This conclusion was reached by assessing the level of postretirement income and assets that the boomers would need to maintain 80 percent of their peak pre-retirement spending.  This analysis — based on net financial assets such as bank deposits, stocks, and bonds, minus credit card balances, car loans, and other nonmortgage debt — indicates that 69 percent of the boomers are not prepared to maintain their lifestyles.  The inclusion of home equity, whose value is declining in many regions below the levels prevailing when the analysis was undertaken, only reduces the proportion of the unprepared to 62 percent.

This lack of financial preparation will affect not just the poor, who have always struggled with retirement, but large numbers of middle-class Americans and Australians as well.  Less than half of boomer households earning $60,000 to $90,000 a year are prepared, even if home equity values before the credit crunch are included in their assets.

Many are not even aware of their predicament. In a survey conducted by MGI Research, about half of boomer households expressed confidence in their financial future. But by MGI Research’s calculations, less than half of those confident households are adequately prepared.

There is an urgent need for Boomers to take action now and take control of their financial destiny.

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