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Affluent Boomers See Retirement as Freedom, Opportunity, Relaxation

Category: Financial and taxes in retirement

Although it is true that most baby boomers feel poorly prepared for retirement on a financial basis, millions of them are very well heeled. Bank of America released its latest Merrill Lynch Affluent Insights Quarterly in January, which was based on a survey examining the values, financial priorities and concerns of affluent Americans. The survey found that the vast majority (84 percent) of affluent baby boomers (in this survey, boomers aged 46 – 64 who had investment assets of $250,000 or more) believe that their “retirement” will differ from that of their parents. These baby boomers see those differences as positive – 86 percent intend to live a more active lifestyle, and 72 percent believe they will enjoy a higher standard of living during retirement than their parents did. Seventy percent of these Baby Boomers plan to keep working at least part-time, as a means of remaining active and engaged during this stage in life.

Women Less Confident Than Men
Overall, top financial concerns among the affluent continue to be the rising cost of health care (64 percent) and ensuring that their retirement assets will last throughout their lifetime (57 percent). These concerns are more prevalent among women, 70 percent of which are worried about health care costs and 63 percent about the longevity of retirement assets, compared to 57 percent and 52 percent of men respectively.

Positive Words
According to a WSJ-MarketWatch article about the Affluent Boomer Survey, boomers chose some very positive words to describe what retirement means to them: “freedom”, “opportunity”, and “relaxation” were the most frequently cited. “Uncertainty” was used by only 9%. Of course this survey was among wealthier boomers; struggling ones would undoubtedly not be so positive.

Not so rosy for the less affluent
Confidence levels and attitudes differ drastically when workers of all ages and savings levels are surveyed, however. Surveys like those from Sun Life and the Employee Benefit Research Institute paint a very discouraging picture about retirement – last year the ERBI reported in its Retirement Confidence Index that fewer than 1 in 5 retirees predict they will have a financially secure retirement. The solution to this predicament seems clear from the Merrill Lynch survey’s finding – 70% of boomers plan to work while in retirement.

The Bank of America/Merrill Lynch survey asked wealthy boomers about what they would advise younger workers about their retirement planning. Interestingly, about half said they underestimated the importance of planning for their post-retirement lifestyle. Seventy-eight percent recommended that individuals begin to plan financially for the life they want to live in retirement no later than in their 30s, and 57 percent recommend starting this planning process in their 20s.

What do you think? Share how you would describe retirement, as well as how well you feel prepared for it. What is your biggest concern, and what was your biggest surprise.

Posted by John Brady on February 8th, 2011


  1. I retire in 2 days. I see it as freedom to do what I enjoy. I will be 65 in April. I see ahead an active time with more time to dance, ride my bike, walk, swim and be social. I am in good health and plan to use some of my free time to get more fit and lose 15 lbs. I am moving to a warm climate and leaving the northeast with it’s cold winters that make me feel like staying in the house after work.
    Watch out Florida here I come!I have prepared by saving all of my working life.I advise young people to leave the credit cards alone, only buy what you have the money for and really want, and save! Start as soon as you get your first paycheck! See the magic of compounding.

    by Marcy — February 9, 2011

  2. I’ve talked to my parents long before they retire in Pennsylvania. My mom’s indeed less confident than my dad when it comes to several retirement issues including healthcare. But as I see it, I think she’s more practical in approaching the issues than my dad.

    by M.K. Clark — February 10, 2011

  3. Marcy, it appears you have prepared yourself well for a great retirement by staying in shape physically and financially and mentally. Only one more day left at work for you. Go turn Florida on it’s head and have a great time, you have earned it!!

    by Dennis — February 10, 2011

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