Did Baby Boomers Learn a Priceless Savings Lesson?

Boomers Have Transformed a Life-Lesson Learned into Advice for Generation X

MINNEAPOLIS -- In a classic case of "Do as I say, not as I do," a new nationwide survey of pre-retirees offers younger generations a glimpse of what baby boomers might do differently if they could turn back the clock and start their retirement planning over.

According to the survey of 2,500 adults, ages 45-64, conducted by Thrivent Financial for Lutherans, 71 percent of respondents wished they had started saving for retirement when they had their first full-time job, and a whopping 86 percent would advise younger generations to start saving as soon as possible. In addition, 61 percent would invest $1 million unexpected income into retirement savings rather than start a business, buy a luxury home or go on a shopping spree.

The Thrivent Financial survey took a unique look at pre-retirees' visions of retirement. It revealed a startling disparity between pre-retirees' ideal plans and their actual retirement readiness, with a hint of regret.

"This survey confirms what we've been hearing for the past couple of years, that we baby boomers are very optimistic about retirement," said Pam Moret, Thrivent Financial executive vice president of marketing and products. "Unlike the frugal mentality of my parents' generation, our carefree approach to life may have kept us from saving for retirement. However, that carefree attitude about retirement planning could carry a price - a price we might pay in our golden years."

Golden Advice for the Golden Years

Although the majority of pre-retirees (67 percent) anticipate that they will either enjoy a lifestyle similar to life nowCoor even thrive in retirementCothey admit to wishing they were better prepared.

According to the survey, most pre-retirees (35 percent) ranked "starting to save and invest too late in life" as the number one obstacle that keeps them from saving more money for retirement. Other top-ranking obstacles included the cost of health care or health insurance (32 percent), a low-paying job (29 percent) and credit card debt (28 percent).

Beyond saving earlier, the advice most offered to younger generations by pre-retirees included:

* Don't procrastinate - retirement will come sooner than you think (57 percent)

* Plan for the unexpected (57 percent).

* Seek professional help - it will come sooner than you think (32 percent).

Actions Speak Louder Than Words

While baby boomers offered earnest advice to younger generations on their impending retirement, how they are preparing for their own retirement also made a resounding statement. Despite well over half (56 percent) of pre-retirees expecting to enjoy a standard of living similar to or better than their own parents, 71 percent of respondents feel a lack of money in retirement may prevent their plans.

While many factors contribute to pre-retirees' guarded optimism about retirement, a lack of proactive planning and saving is the greatest cause for concern. The survey also found that:

* One in four (24 percent) pre-retirees haven't begun saving for retirement and one in five (19 percent) didn't start until they were at least 45 years old.

* Fifty-nine percent have neither gone through a formal retirement planning process with a financial professional nor done serious calculations on their own.

* Forty-one percent of respondents are worried about the effect of health care costs on their retirement savings.

A Long and Winding Road 

While the advice pre-retirees gave may sound like more of a warning and the example they set a cautionary tale, baby boomers are quick to point out that they are looking forward to retirement. For example, like a soundtrack to their lives, baby boomers likened memorable song titles to their outlook on retirement. Thirty-five percent say the Beatles' "The Long and Winding Road" most closely resembles their vision of retirement. However, twenty-one percent of pre-retirees compared retiring to another 70's hit, "Stayin' Alive", as a testament to the apprehension they feel about getting by.

Additionally, 36 percent say planning for retirement is like a "walk in the parkC*" Most expect to be able to travel (45 percent), spend more time with children and grandchildren (39 percent) or take up a new hobby or activity (23 percent).

Better Today Than Tomorrow

Regardless of your age or financial circumstances, according to Tim Schmidt, co-managing partner of Thrivent Financial's Twin Cities Regional Financial Office, today is a better day to begin preparing for retirement than tomorrow.

"Good preparation can enhance anyone's finances in retirement," said Schmidt. "Pre-retirees should look for simple, doable and affordable solutions to ensure that their long and winding road to retirement ends at a pleasant destination."

About the Thriving In Retirement Survey

Data for this survey were collected by the Harris Interactive Service Bureau (HISB) on behalf of Action Marketing Research. HISB was responsible for collection of the online data and demographic weighting only. Action Marketing Research was responsible for the survey design and was solely responsible for data analysis. HISB collected data September 26 to October 7, 2006 among a nationwide cross section of 2,500 U.S. adults age 45 to 64 of whom 1,213 were men and 1,287 were women.

About Thrivent Financial for Lutherans

Thrivent Financial for Lutherans is a Fortune 500 financial services membership organization helping nearly 3 million members achieve their financial goals and give back to their communities. Thrivent Financial and its affiliates offer a broad range of financial products and services including life insurance, annuities, mutual funds, disability income insurance, bank products and more. As a not-for-profit organization, Thrivent Financial sponsors national outreach programs and activities that support congregations, schools, charitable organizations and individuals in need. For more information, visit www.thrivent.com.

Securities are offered through Thrivent Investment Management Inc., 625 Fourth Ave. South, Minneapolis, MN 55415-1665, 800-THRIVENT (800-847-4836) a wholly owned subsidiary of Thrivent Financial for Lutherans. Member NASD. Member SIPC.