Fidelity® Survey Finds While Boomers with Pensions More Likely to Retire at or Before 65, Almost Half Will Retire with Debt

Retired Boomers – With and Without Pensions – Wish They Had Saved More

BOSTON – While more working baby boomers1 with pensions indicate they are more likely (56 percent) to retire at or before the traditional age of 65 than those without (39 percent), almost half of them still expect to retire with debt, according to a Fidelity Investments® survey released today. Additionally, retired baby boomers receiving payments from pensions today say they should have saved earlier than they did. One in five retirees with pensions acknowledged they did no planning before retirement, with half (51 percent) indicating they only began planning just a year or more before retirement.

The study2, conducted among 1,018 baby boomers either working in or recently retired from corporate jobs, was designed to uncover what boomers think about their retirement readiness and the role of employer-sponsored benefits at a time when more than 3 million boomers are turning 653 each year and contemplating retirement.

“Our research uncovered the fact that even the small population of baby boomers who actually receive a pension payout today feel they should have saved earlier than they did for their income in retirement,” said Wendy Foster, senior vice president at Fidelity Investments. “Saving more aggressively and planning well ahead of your expected retirement date becomes even more critical for the majority of Americans, particularly younger workers, without traditional pensions. Fidelity is reaching out to participants and providing guidance earlier on in their careers to help them plan for retirement. Our goal is to start the conversations sooner to help them achieve the best possible outcomes in the future,” Foster said.

Many Boomers Expect to Retire With Debt
While boomers currently participating in pension plans may feel more flexibility around their expected retirement date, nearly half (48 percent) of all boomers – regardless of whether they expect to retire with a pension – anticipate retiring with debt from some of life’s typical demands; primarily mortgage payments followed by credit cards, car payments and student loans for either themselves, a spouse or their children.

Also, regardless of whether they have access to pension payments in retirement, seven out of 10 retired boomers said they wished they had done more to save for retirement during their working years.

Survey Finds Majority Would Rollover Lump-Sum Distribution to IRA/401(k)
More companies are offering current and former employees participating in a pension plan a lump-sum distribution option in lieu of a future traditional annuity payout. The Fidelity study found that 63 percent of employed boomers would roll all of their pension assets into an IRA/401(k) if given the choice or required to take a lump sum today. Sixteen percent would roll some of it into an IRA/401(k) and use some to purchase an annuity and just six percent would purchase an annuity with the entire amount.

“What to do when offered a lump sum payout is a personal decision, making it critical that individuals seek help from a financial professional to fully understand their options and the potential impact on their overall financial plan,” said Ken Hevert, vice president at Fidelity Investments.

Fidelity provides guidance to investors regarding the various options associated with this decision, and helps them make more informed retirement decisions in the context of other financial considerations. Fidelity guidance consultants utilize, among other vehicles, the Retirement Income Planner, a planning tool that has the ability to take into account a participant's complete financial picture and help them understand all of their income sources in retirement along with strategies to help ensure they will not outlive their assets.

Boomers Need Help Understanding Their Distribution Options
The majority (58 percent) of those surveyed said they were not familiar with the procedures and requirements involved in setting up pension payments upon retirement. As part of Plan for Life, Fidelity’s enhanced participant experience, record-kept corporate pension plans have access to guidance across multiple channels, including a robust online resource center where employees have access to a series of educational materials to guide them through this important milestone. The materials include a five-minute instructional video, an article “How to Take a Pension Payout,” a checklist “Initiating Your Pension” and links to pension calculators. Combined, this provides participants with the guidance they need to make appropriate decisions and plan for retirement along with other life decisions.

Fidelity is one of the top three corporate pension service providers in the United States4. The firm services 112 employers with 674 plans. Each year, it processes more than 100,000 retirement initiations and services more than 1 million retirees5.

About Fidelity Investments
Fidelity Investments is one of the world’s largest providers of financial services, with assets under administration of $3.8 trillion, including managed assets of $1.6 trillion, as of October 31, 2012. Founded in 1946, the firm is a leading provider of investment management, retirement planning, portfolio guidance, brokerage, benefits outsourcing and many other financial products and services to more than 20 million individuals and institutions, as well as through 5,000 financial intermediary firms. For more information about Fidelity Investments, visit

1) US adults born between 1946 and 1964
2) Survey was conducted by VerstaResearch, an independent firm based in Chicago, between July 3 and July 18, 2012 among 1,018 baby boomers who work in or recently retired from corporate sector employment. Versta Research is not affiliated with Fidelity Investments.
3) U.S. Census
4) Fidelity data
5) Fidelity data

Guidance provided by Fidelity is educational in nature, is not individualized and is not intended to serve as the primary or sole basis for your investment or tax-planning decisions.

IMPORTANT: The projections or other information generated by Fidelity’s Retirement Income Planner regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. Results may vary with each use and over time.

Retirement Income Planner is an educational tool.

Fidelity Brokerage Services LLC, Member NYSE, SIPC 900 Salem Street, Smithfield, R.I. 02917


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