Boomers Making Seismic Plan Changes

More than half of affluent 60-year-olds are revamping their retirement plans, according to Bell Investment Advisors’ fourth annual Affluent Boomers at 60 Survey of 500 high net-worth 60-year-olds. This represents double the number who reported making such changes a year ago, Of those who have altered their retirement plans in the last six months, two out of three are delaying their retirement, with 34 percent of these planning to work an additional five or more years. Almost 75 percent have reduced spending, and nearly half have changed their investments.   The survey shows that some 57 percent of respondents say they feel more financially stressed than they were six months ago. In fact, 76 percent claim they feel less wealthy and 35 percent note they do not have enough money on which to retire. The survey also reveals a loss of confidence in America’s financial system. These boomers indicate they’ve lost the most confidence in government regulators (34 percent) and banks and financial institutions (30 percent).   “It is critical for investors to realize that there is no bailout package for retirement,” points out Jim Bell, CFP^®, founder and president of Bell Investment Advisors. “The current economic situation is a wake-up call for investors at 60 to have a clear retirement plan that incorporates a sound investment strategy.”   Of investors surveyed, 54 percent estimate they will need $1 to $3 million at retirement, but 42 percent have invested or saved less than $1 million. Among respondents who plan to reduce their spending this year, 46 percent are doing so in order to rebuild their retirement savings. More than half (55 percent) of those boomers who have decided to delay their retirement cite the same reason for adding more working years to their plans.   When it comes to investing, the majority (56 percent) think the stock market is too risky for people their age. Even more, (61 percent) of those surveyed, plan to make a change in their investment strategy this year, with one-third of them intending to invest more in fixed income investments. Half of those investors who plan to change are taking a “wait and see” attitude about which direction they will go.   “Merely increasing savings and working longer will not fill the gap for most Boomers approaching retirement,” says Bell. “Recent stock market volatility has many Boomers reconsidering risk, but it’s critical to keep in mind that when you reduce investment risk you also reduce the upside potential to rebuild wealth. Boomers who choose to wait for a market recovery to decide when to reinvest will miss early gains.”   Despite the radical changes this group of boomers is making to their retirement plans, the market downturn of 2008 has not altered their core positive feeling about their lives. Almost all (97 percent) claim they feel great about their lives, as they have in the prior four years Bell has sponsored this survey. Looking forward, 73 percent say they expect the stock market to finish 2009 higher than it started, and 43 percent feel 2009 will be a year where they increase their wealth.   Bell Investment Advisors offers investment management, comprehensive financial planning, and career/life planning services to help investors plan and achieve their personal and retirement goals. The firm manages more than $360 million for its more than 600 clients. To learn more, visit www.bellinvest.com.