Financial News: Can most Boomers afford to retire?

October 3, 2007

Perhaps not. More than two-thirds of them are adding the value of their homes to their retirement portfolio, according to a recent survey. That?s a mistake, say financial planners.

Perhaps not. More than two-thirds of them are adding the value of their homes to their retirement portfolio, according to a recent survey. That's a mistake, say financial planners, because unless these Boomers cash out and move somewhere cheaper, none of the current equity in their home will be available to fund their retirement. While a majority of survey respondents say they have plenty to retire on, 39 percent had less than $1 million saved.

Not that a mere million would do the trick anyway, says Jim Bell, president of Bell Investment Advisors, whose Oakland, CA-based firm commissioned the survey of 500 60-year-olds. "Affluent Boomers have a false sense of complacency once they hit the $1 million mark in retirement savings," he says. "With so many people living well past age 80 or 90, $1 million is just not enough to take them comfortably through their golden years."

While many 60-year-olds say they'd like to work as long as possible, their health may prevent them from doing so. In addition, Bell says, "Boomers need to acknowledge that health care will likely cost more than they currently think."