Do you remember 2007? Baby boomers, although they were never prolific savers, were optimistic about their retirement prospects. The stock market was trending upward nicely and home values were inflating fast. Baby boomers have certainly changed their retirement plans since then.
The MetLife Mature Market Institute surveyed 910 1946-born baby boomers in 2007, when they were approximately age 61, about their retirement plans. Then they managed to track down 562 of them again in late 2008 to see if they followed through. Many didn’t. Here’s a look at how one extraordinary year altered baby boomer’s retirement plans.
Original plan: In 2007, about 11 percent of boomers born in 1946 said they planned to retire at age 62.
Actual plan. Of those boomers, 71 percent did not retire. The top reasons for continuing to work were the current economic situation (26 percent), the need for income from work (20 percent), and because they liked to work or would be bored not working (17 percent). Only 15 percent of these boomers actually followed through with their retirement plans. And 6 percent managed to cut back their hours to part-time or seasonal employment.
Original plan: About 38 percent of the baby boomers said they would retire at age 63 or later in 2007.
Actual plan: Most of the boomers who planned to work past age 62 (67 percent) have not changed their planned retirement age. About 31 percent will further postpone their retirement date. Only 2 percent plan to retire earlier.
Original plan: Almost one-quarter (23 percent) of 1946-born boomers said they would sign up for Social Security benefits as soon as possible at age 62.
Actual plan: The majority (75 percent) did end up claiming their due in 2008. The other quarter of these boomers has largely decided to delay claiming Social Security for a variety of reasons including not being ready to retire or a preference to keep working (33 percent), needing the income (24 percent), not yet eligible (17 percent), to keep health insurance (16 percent), to build up their check amounts by delaying claiming (8 percent), or to avoid the penalty on earnings if you retire early (5 percent).
Original plan. Almost half (48 percent) of the baby boomers surveyed in 2007 planned to collect Social Security after age 62.
Actual plan: Since 2007, the majority of these survey respondents (80 percent) have not changed their plans. However, 17 percent indicated that they will now collect Social Security benefits later than originally planned, many because they are still working. Only 3 percent of the baby boomers indicated they would collect Social Security benefits earlier than originally planned. Top reasons include a disability (28 percent), health reasons (18 percent), and because they want to (8 percent).
Tell us, have your retirement plans changed since 2007?