Published June 06, 2013
Turns out some baby boomers aren’t staying in the workforce and are jumping into retirement at full force when they hit 67.
According to new data from the MetLife Mature Market Institute, which interviewed more than 1,000 baby boomers born in 1946, these oldest boomers are retiring at a quick rate with 52% in full retirement. The findings represent a big increase since 2007 and 2008 when only one in five of the oldest boomers were retired.
"As oldest boomers dive into retirement, even though some have been forced to do so earlier than expected, they seem to be 'Feelin' Groovy,' as this group would have said during their formative years," says Sandra Timmermann, director of the MetLife Mature Market Institute, in a statement. "On the negative side, a good half of this group may not have achieved their retirement savings goals and are not confident about paying for the next phase of their lives."
John Migliaccio, director of research at the MetLife Mature Market Institute, echoed these sentiments and explained what’s behind this trend and what younger boomers can expect as they gear up for retirement.
Boomer: What were some key findings in the oldest boomers study?
Migliaccio: One of the major issues we've been tracking since boomers turned 62 is how they are responding to life transitions concerning retirement. We hear a lot about boomers saying they intend to continue working well past the traditional retirement age of 65 but for leading-edge boomers, that's not what we're finding.
Retirees at age 66 outnumber those still full time in the workforce by over two to one. More than half (52%) of the 1946 boomers are now fully retired, 21% remain employed full time and14% are working part time. Only 4% are self employed. Those retired represent a big jump since 2007 and 2008 when just 19% of oldest boomers were retired and a notable increase from the 45% retired in 2011.
Most of those still working say they plan to retire fully between age 66-70. Another interesting finding is that although the majority of retirees say they have less income than when they were working, lower income does not always equal a lower standard of living. At this point, most are now empty nesters, and 79% of oldest boomers have neither of their parents living, so grandkids have definitely replaced older parents as their focus. They have more grandchildren now, an average of 4.8 up from 2.6 in 2008. About 13% are providing regular care for a parent or older relative. Fewer have eldercare responsibilities than in the past, but the level of care has increased for those who do.
Boomer: Did you find changes in attitudes and behaviors of the oldest boomers toward retirement from the studies back in 2007 and 2008?
Migliaccio: There's less hesitation and uncertainty about retirement as they experience the reality. According to this year’s report, of those already in retirement, two-thirds say the “really” like it and another 23% like it “somewhat.” There are very few who would rather be doing something else. This very positive viewpoint reflects the typical initial "go-go" years in retirement when health is still very good.
What’s more, 85% of those surveyed this year like the word "retirement" itself to describe their current lifestage. As we've seen from prior studies, they also continue to keep pushing back the definition of "old" they age. The oldest boomers now believe they will see themselves as "old" at the age of 78.5--slightly higher than the 77.8 they identified in 2011.
Boomer: Baby boomers born in 1946 are eligible for Social Security benefits. Did they take their full retirement benefits or decide to wait until they were 70?
Migliaccio: The vast majority, almost 86%, are already collecting Social Security benefits, at an average age of 63.6, our report show. It's also revealing that 43% began collecting earlier than they had planned.
Another large percentage, 47%, started their benefits when they had anticipated they would. Of those who retired earlier than expected, only 1% cited eligibility for Social Security as the reason for doing so.
Having benefits in hand also apparently fosters more confidence about the Social Security system. Similar to 2011, 65% of the oldest Boomers in 2012 are somewhat or very confident that Social Security will be able to provide adequate benefits for their lifetime.
Boomer: Did those surveyed feel they have achieved their retirement savings goals?
Migliaccio: There was a notable increase from our prior studies in boomers who have achieved their retirement saving goals. Just over half of the oldest boomers we surveyed reported having reached or are on track for their retirement savings goals, an increase from 38% in 2008. That's good progress; however there are still 34% are somewhat or significantly behind in their saving, and a smaller segment who are still unsure about what these goals should be.
As a result, many are not confident about paying for this phase of their lives, especially health costs. Long-term care rose to the top of the list of retirement concerns, with 31% reporting concern about providing for health care costs for themselves or their spouses.
It was also interesting to see how many more boomers report getting professional financial advice the closer they came to retirement, up to 51% in 2012 from 36% in 2008. Apparently, as they got to the actual transition, more of them reached out for financial planning assistance and hopefully more will do so, an example of a "better late than never" mindset for some.