Boomers Ill-Equipped For Retirement, Surveys Find

The wealth of financial planning data available through the Internet and other media is not making matters easier for boomers. The challenge that many face, says Gaberlavage, is to distinguish credible from non-credible information.

He advocates greater cooperation among financial services companies, federal and state agencies, and nonprofits to strengthen consumer education on financial management and planning. They must also develop "touchstones" or methods that will enable consumers to compare more easily features and fees of financial products.

"The companies that do an effective job of cutting through the complexity and providing good, impartial presentations of the material will be the ones who receive favorable treatment from boomers," he says.

Hayes also applauds easier product comparisons but says efforts to achieve this will do little to make better investors of most people.

"There's one flaw in this argument, which is that people will read and understand the literature if you make it transparent enough," she says. "That's true of only a small portion of the population. Most folks don't want to take the time to become educated investors."

To boost retirement savings, Hayes says producers should encourage employers to establish automatic enrollment in 401(k)s (uninterested employees would have to opt out) to allow employees to contribute after-tax dollars to their retirement plans and to persuade new employees to roll over previously established retirement savings into the new employer's 401(k).

And, she adds, both employers and employees need to prepare for another fact the Merrill Lynch study revealed: 15% of respondents (of which 15% are boomers aged 45 to 59) never want to retire.

"This partly represents a lifestyle decision," says Hayes. "But the figure also tells us that boomers see work during the retirement years as a way to enhance their mental and social health, in addition to their financial well-being."

Reproduced from National Underwriter Edition, May 21, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.