Can BABY BOOMERS Afford To Retire AT 60?

OR are Wealthy Boomers Seeing Finances through Rose-Colored Glasses?

Every day in 2006 another 8,000 Baby Boomers turn 60, and the affluent among them are optimistic about themselves and their futures. Yet, the aging "me-generation" may not be matching their financial plans to their vision of an active, generous retirement, according to a nationwide survey commissioned by Bell Investment Advisors, a wealth management firm in California.

The survey, conducted among 500 60-year-old high-net-worth investors across the US by Opinion Research Corporation, found that these Boomers feel "great about their lives overall." Four in 10 believe that age 60 today is more like being 50 a generation ago. Perhaps, as a result of this sense of well-being, some 48 percent of those surveyed said they plan to work as long as they are able, either in a full-time or part-time capacity, and 94 percent plan to help their children financially.

However, the survey reveals a dichotomy: While Boomers are redefining retirement, they are not redefining their investment strategies.

"We found that affluent Boomers have a false sense of complacency once they hit the million-dollar mark in retirement savings," says Jim Bell, president and founder of Bell Investment Advisors. "With so many people living well past 80 or 90 years of age, $1 million is just not enough to take them comfortably through their golden years." While a majority of the respondents believe they have enough to retire on comfortably, 39 percent of respondents have less than $1 million saved for retirement. Only one in five believes they need to increase their retirement savings.

The survey also found that many Baby Boomers are planning to work as long as possible in their current career to add to their retirement savings. "The problem with this strategy is that although they may live longer, they may not be able to work as long as they hope, if health issues arise," says Bell. "Boomers need to acknowledge that health care will likely cost more than they currently think." he adds.

Two other findings highlight how affluent Boomers at 60 have built their net worth and how they plan to invest for the future. -more-

Survey by Bell Investment Advisors:

Of those surveyed, 37 percent claim to have financial security from equity in their home or other real estate investments. Only 29 percent of those surveyed report investing in the stock market. "While real estate has recently produced outsized returns, boomers should not be deluded into thinking that this trend will continue. Over time, the stock market has been the best asset class to consistently outperform inflation," explains Bell.

When it comes to investing, 38 percent of the affluent Boomers plan to invest more conservatively in the future to preserve what they have; 24 percent hope to accumulate more wealth to fund a better retirement. "Boomers should not be investing more conservatively as they approach retirement," notes Bell. "With longer life expectancies and more active lifestyles, they need investments that will overcome inflation and build purchasing power. What may have worked for the Boomers' parents is no longer valid today," said Bell.

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