Data & Research April 11, 2007

Boomers Not Confident About Standard of Living in Retirement

Nearly one-third (31%) of baby boomers say they will have to cut back on their current lifestyle in retirement and 42% believe they will not have enough money to do the things they want to do when they retire.
Reported by
Baby boomers are not optimistic about their looming retirement years, according to the 2007 American Retirement Study by investment firm Scottrade. Only half (51%) of boomers have some savings in 401(k)s but 37% also have individual retirement accounts (IRAs), a simplified employee pension plan (SEP) or similar retirement plans.
Nearly 30% of baby boomers have saved less than $25,000 for their retirement and 23% say they will never be able to retire and not need to earn an income.
The greatest financial concern among baby boomer respondents was having enough money for retirement, with 62% saying that was their biggest fear. Other concerns were: having enough money to cover health care costs (50%); unexpected expenses (50%); protecting family in case of premature death/disability (43%); getting good investment returns (44%); protecting wealth (38%); having too much debt (36%); and caring for elderly parents/relatives (35%)
“There’s a disparity here in that while most Boomers feel very unprepared financially for retirement, this demographic remains keenly aware of the problem but is not addressing it properly,’ said Chris X. Moloney, Scottrade’s chief marketing officer, in a press release about the survey. “This may be a case of doing too little, too late. Three in ten have saved under $25,000, which is concerning.’
The Markets April 11, 2007

Emerging and Developed Equities See Positive Returns in March

The world’s developed equity markets gained 1.97% in March with emerging stock markets gaining 4.12%, after both were in the red the month before, according to Standard&Poor's The World by Numbers report.
Reported by
For the first quarter of 2007, developed markets are up an average of 6.78% and emerging stock markets were ahead 4.68%.
“World equity markets improved from their February and early March selloff levels, but reacted negatively during the last week of trading during the quarter,” said Howard Silverblatt, Senior Index Analyst at Standard & Poor’s, in the report. “Political concerns over the United Kingdom/Iranian standoff pushed oil prices and oil stocks up, but as the tension subsided, expectation of a reduction in oil prices prevailed. Concerns are once again focused on the slowing global economy and inflation.’
In 26 of the 27 developed world stock markets there were gains in March with an average return of 4.06%; Japan was the lone decliner, losing 1.31%. The emerging markets were equally positive, with 23 of the 26 groups posting positive gains in March averaging 5.80%.
The European Central Bank raised the benchmark refinance rate 0.25 bps to 3.75%, and The People’s Bank of China raised its lending rate 0.27 bps to 6.39%. The Bank of England and the U.S. Central Bank held their rate at 5.25%, with the U.S. Open Market Committee signaling a move toward neutrality from their former tightening bias.
The S&P/Citigroup World by Numbers Report for March is at www.standardandpoors.com/indices.

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