Strong retirement planning can make a person's twilight years the best part of his or her life, but many Americans have not adequately prepared for retirement. The potential financial ramifications of this problem are becoming more pronounced as baby boomers rapidly enter retirement age.
According to the U.S. Census Bureau, by 2029, all baby boomers will be over the age of 65, and the number of people above retirement age will dwarf the number of people below age 18 by 2056. These individuals are realizing the impending reality of retirement, and many are unsure of their own preparedness. Credit unions can appeal to these individuals with programs that help them effectively save for retirement before it is too late.
Baby boomers feel the pressure
The baby boomer generation is hitting retirement age during the next few years, but a remarkably small number of this cohort feel confident about their savings. A new survey, from the Insured Retirement Institute, discovered that just 60 percent of baby boomers have savings for retirement. More alarmingly, that number represents a decline from previous surveys. As of last year, 8 in 10 boomers said they had saved for retirement.
"Just 60 % of boomers have retirement savings."
People are also less positive regarding the savings they have. While 40 percent of survey participants said they were confident about retirement in the past, just 27 percent of those surveyed indicated they were confident in this year's study.
Diminishing returns, but it's never too late
Saving for retirement is easiest when you start early in life. While it's possible to catch up on retirement savings, doing so requires higher contributions to savings accounts. MarketWatch reported that someone who saves 6 percent of their annual salary starting at age 25 will have the same amount saved in retirement as an individual who saves 16.5 percent of their salary starting at age 40.
Credit unions can gain members by appealing to young people who haven't begun saving and boomers who are concerned about their impending retirement. Both groups need financial guidance to get the most from savings accounts, and the community-based structure of credit unions makes it easier for their advisors to get to know members and provide education. Saving for retirement is a necessity, and credit unions have the potential to help members adequately prepare for the days that come after leaving the workforce.