There's a disconnect between baby boomers and financial advisors, and it shows.
According to "The Middle-Income Boomer Retirement Gap: Savings, Education and Advice" study from the Bankers Life Center for a Secure Retirement, boomers aren't averse to hiring professionals to walk their dogs (46 percent of dog owners), fix their cars (66 percent) or trim their hair (73 percent).
But only about four in 10 use a financial professional. And when it comes to middle-income boomers, the disconnect appears to be mutual, with advisors more concerned with pursuing wealthier clients.
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Only 15 percent of middle-income boomers reported that they'd been contacted by a financial professional in the last year, with 22 percent saying it had been more than a year. And 63 percent said they had never been contacted.
The study surveyed 1,000 Americans aged 50 to 68 with an annual household income between $25,000 and $100,000.
Boomers, as we all know, aren't exactly prepared for retirement, a point confirmed yet again by this study.
More than three-quarters (77 percent) of those surveyed by Bankers Life have never received any kind of specialized financial training, whether in high school, college or the workplace. Only 17 percent reported having had any formal training on retirement financial security.
They're ignorant about mutual funds, with 42 percent saying they don't invest in them and 21 percent saying they don't know the difference between indexed funds and those that are actively managed. And 54 percent report that they have less than $100,000 in investable assets.
That can be scary when you consider that, according to withdrawal guidelines on how to make assets last through retirement, retirees should draw no more than 4 percent of their assets per year (and that's considered aggressive) to supplement Social Security and any other income they might have during retirement.
With Social Security averaging $15,000 per year, that means those with $100,000 should take no more than $4,000 annually from that total to increase their income — and those who have less should take less. Needless to say, that doesn't bode well for a comfortable retirement.
Most boomers also have most of their assets tied up in their homes, but plan to age in place — meaning that they won't be able to draw on the value of their homes to help them meet retirement expenses.
They also underestimate the amount they'll likely spend on medical expenses in retirement. Survey respondents estimated the cost of a single year in a nursing home at $46,890; the actual figure is almost twice as much, coming in at an average of $90,520.
And 63 percent have no will; 64 percent have no living will; and 65 percent have no healthcare power of attorney.
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