Amid reports of the negative effects of COVID-19 on older workers’ retirements, four in five baby boomers still believe they will have a better retirement than their parents. That’s according to data gathered from the Charles Schwab 2020 Modern Retirement Survey earlier this month.
The firm surveyed 2,000 Americans aged 55 to 75 with at least $100,000 in investable assets, including their savings for retirement.
Fully 84% of respondents anticipate their quality of life in retirement will be better than that of their parents and 80% believe their quality of life in retirement will be better than that of their children. Nearly two-thirds (65%) also said they would rather deplete assets in retirement than leave an inheritance for their children.
On average, survey respondents have accumulated $920,400 in retirement savings, and more than eight in 10 (82%) believe their savings will get them “all the way” or “most of the way” to living out their dreams in retirement.
While retirement optimism is strong among the boomers surveyed, Schwab’s study found significantly different perspectives on the future of retirement between those who have not yet retired (aspiring retirees), those who have been retired for less than five years (apprentice retirees) and those have been retired for five years or more (accomplished retirees).
The biggest difference was that aspiring retirees in the survey expect to retire later and are more likely to plan to work in retirement. While most said the COVID-19 pandemic hasn’t significantly affected their retirement savings, they feel less financially prepared to weather another pandemic compared to those who have settled into their retirement.
“As Boomers who have yet to retire think about winding down from their decades-long careers, many of the traditional senses of ‘retirement’ don’t apply today — their needs and wishes are diverse and for many, a hard stop at 65 just doesn’t sit right,” said Rob Williams, vice president of financial planning and retirement income at Charles Schwab. “No matter what their dream retirement may look like, it’s important for rising retirees to think about how they may need to boost their savings or adjust their portfolio, when it may be the right time to start taking Social Security and how to plan for future healthcare costs.”