The Oldest Boomers Are More Set for Retirement Than Thought
by Robert Powell
provided by Bankrate.com
Breathe a sigh of relief. The nation's leading-edge baby boomers -- about 3 million strong -- are turning 62 this year and, contrary to popular opinion, they are not in desperate straits.
In fact, Americans born in 1946 are in relatively good financial shape and seemingly entirely different from other boomers. Maybe that's because only 2% of them report that they attended Woodstock.
Consider, for instance, some highlights from MetLife's Mature Market Institute just-released study of boomers turning 62. The majority are in good health; 77% report being in good to excellent health. They have relatively good income, $71,400, which is a tad more than the average household income in America.
They have a decent net worth; $550,000 including the value of their homes. (The average retiree, by the way, has just about $254,000, excluding the net present value of Social Security, in net worth, according to a Boston College Center for Retirement Research study.)
Nearly half have a traditional pension plan, 50% have a 401(k) and 50% have an IRA. Nearly 70% have employee or retiree health insurance. And about a third have long-term-care insurance.
But what's especially telling about this group's financial health is this: While roughly 80% of Americans take Social Security at age 62, this group -- which includes such well -known Americans as Jimmy Buffet, President George W. Bush, former President Clinton, Sally Field and Diane Keaton -- will not. Just one-third said they plan to take Social Security when they turn 62; the rest plan to take Social Security at age 65 or later.
In the past, those who took Social Security early did so for health reasons. (At least one study has established a correlation between a person having a high body mass index and taking Social Security early.) But the leading-edge of boomers will take Social Security early for different reasons.
"They feel they're entitled and would rather have the money than let the government have it," according to MetLife's study. Those who will take the payouts now said they fear there will be nothing left in the Social Security system if they wait.
Lots of positives at 62
But even though the majority of leading-edge boomers don't plan to take Social Security early, they do say the best things about being 62 are "retirement" and "not having to work." When asked to use one word to explain the best aspect of being 62, those surveyed also answered: being alive, freedom, health, Social Security, wisdom and independence. "As one person put it, 'I'm glad to be on the planet, rather than in it,'" the survey said.
As for the worst aspects of being age 62, those surveyed answered: illness, disability, wrinkles, aches and pains, discrimination, underappreciation, memory loss, mortality and generally getting older.
The leading-edge boomers also seem different from other boomers in other ways. For instance, they have lots of grandchildren upon which to dote. Nearly eight in 10 have grandchildren. In addition, Republican presidential candidates should take note of this: Conservatives outnumber liberals by 2-1.
Health and beauty and fitness industries should take note of this: Most of these leading-edge boomers don' t think they will be old until they are 78, unless of course they are in good health, in which case old is 83. And the builders of retirement communities should take note of this: One in four say they plan to move to another area for retirement. By contrast, other studies suggest that nine in 10 elders want to age in place.
To be sure, this may be as good as it gets for baby boomers. After this, surveys will likely find that fewer and fewer boomers have traditional pension plans, fewer and fewer boomers will have retiree health care and fewer and fewer may be as secure in retirement. But for 62-year-olds, Camelot may have arrived.