75% of retirees do not leave a nest egg and would rather spend golden years living it
COVID-19 resulted in more baby boomers retiring in 2020 than any other year, and while retirees traditionally make more frugal spending decisions to leave their families a financial legacy, according to a. ready to spend their days living it new poll.
Discover: Stunning Statistics on the State of Retirement in America
Discover: Social benefits could be cut early – what does that mean for you?
According to a recent Coventry survey, more than 75% of 1,500+ respondents forego the idea of leaving a nest egg for their family and plan to spend the rest of their lives – and money – making memories and referencing one dramatic shift in priorities. from material things to experiences.
Peter Hershon, SVP of Account Services at Coventry, told GOBankingRates that the challenges of COVID-19 put what is most important to baby boomers into perspective. “During the pandemic, seniors were at the highest health risk, more socially isolated, and may have missed out on time with loved ones,” he said. “Looking to the future, boomers are less focused on leaving a financial legacy for the next generation – and would rather secure their legacy by making priceless memories with loved ones today.”
The survey finds that the baby boomers, paralyzed by the pandemic, feel ready to break out of the house and live big after being unable to travel, see loved ones, and life experiences for a year or more from their proverbial bucket lists. In fact, the survey shows that when this age group was asked about the most important areas of their life to explore and delve into before they die, they prioritized family (41%) and travel (25%). This outperformed learning (10%), hobbies (8%), romantic relationships (6%), philanthropic impact (6%), and careers (4%).
Related: 29 Carefree Ways Retirees Are Wasting Money
When asked if they would clock out permanently, 55% of baby boomers said they don’t consider a career as an encore tied to an interest or passion. In addition, most of them were not interested in working past the age of 65 to finance a richer retirement lifestyle, as 79% would be more likely to live modestly than work until they were 75 and have a more luxurious retirement, according to the results .
Hershon found these results particularly interesting because much has been written about baby boomers taking a different approach to retirement than previous generations, including longer or different roles. “While it’s understandable that boomers would want to retire fully at 65, it is not without its challenges,” he said. “Boomers face a variety of barriers that increase their risk of outliving their savings – from low interest rates to rising healthcare costs. The key is to make sure they have enough income that can be spread over a long period of time. “
In fact, the survey finds that for 33% of baby boomers, the biggest stopping them from getting off their bucket lists is lack of money. In addition, 18% have no retirement income at all, while most fund this chapter through their 401 (K) plans (26%), retirement (21%) or savings (25%).
More: Here’s exactly how much savings you need in your state to retire
But there are other forms of retirement income that seniors may not consider.
“Every year we see seniors letting $ 100 billion in life insurance policies expire without knowing that their policy is an asset they own that can be sold in the secondary market,” said Hershon. “In some cases, these policies are one of the greatest single assets they own. Over the years of life and changing circumstances, the original reason for taking out life insurance may no longer exist. Even term life insurance that is about to expire can become “money found” – it allows seniors to fund enriching experiences to extend their golden years, “he added.
The survey suggests additional sources of income to uncover more retirement income.
For example, by applying for Social Security before your full retirement age (FRA), “you include a lower monthly check from Uncle Sam and miss out on the retirement income you’ve earned throughout your career. If you are healthy and can wait until your FRA, it can mean more income for the rest of your life, ”according to the survey.
Compare: How Much Can the Average Senior Expect to Benefit from Social Security?
Many retirees are unaware that their home is also an important asset in their investment portfolio. “According to Pew Research, nearly eight in ten Americans 65 and older own a home. Whether you’re leaving your second home on Airbnbing, adding a rental suite, or capitalizing on the current surge in home demand to fund your retirement, the survey said.
Finally, when it comes to expertise while many seniors no longer want to work full-time, COVID-19 has created the opportunity for seniors to freelance part-time in many areas during their golden years. “Those with strong expertise in their chosen field may be able to claim a minimum hourly bonus,” the survey says.
Interestingly, the shift in priorities seems to be happening across the socio-economic realm: even millionaires are considering giving up their savings.
See: Next year’s social security exams could get the biggest COLA bump in 13 years
Search: All states that do not tax social security
As GOBankingRates reported last week, a new survey found that while most high net worth individuals plan to leave an inheritance, 67% have concerns about leaving too much as they say there is such a thing as too much money. That is, according to several big names including Warren Buffet, Daniel Craig, and Kevin O’Leary, all of whom have recently said they will not inherit their children. The Motely Fool survey found that while most high net worth individuals plan to leave an inheritance, 67% have concerns about leaving behind too much. The main cause for concern is concerns about the irresponsible handling of inheritance. 59% of the respondents state this. Another concern is the fact that beneficiaries are unwilling to handle a large inheritance (57%) and beneficiaries become lazy as a result, with 56% citing this reason.
More from GOBankingRates
Last updated: September 24, 2021
This article originally appeared on GOBankingRates.com: Survey: 75% of retirees do not leave a nest egg, would rather spend golden years living it