Baby Boomers becoming financially smarter

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By: Wise Marketer Staff |

Posted on January 11, 2007

As America's oldest Baby Boomers start counting down to retirement, a recent US government survey revealed that they are on the upswing in terms of financial savvy, being nearly twice as likely as today's senior citizens to bank and pay their bills online, according to the US Department of the Treasury.

But, despite their increasing financial sophistication, one in four boomers in the US still gets paid with old-fashioned paper cheques - a trend that's most entrenched among those closest to retirement age (51-60 years old), the survey found. And, regionally, New York City's baby boomers are even more fond of paper cheques, with 40% saying they still receive their wages, salary or other regular payment in that form rather than by direct deposit.

The survey, sponsored by the US Department of the Treasury and Federal Reserve Banks, coincides with the government's Go Direct campaign that encourages baby boomers heading for retirement to opt for direct deposit payments when they begin collecting their Social Security benefits.

Financially confident
One year from now, the oldest of America's 77 million baby boomers - born between 1946 and 1964 - will turn 62, becoming eligible for Social Security retirement benefits. The survey found that, in many ways, boomers are confident going into their retirement, with New York City results generally mirroring national trends.

While current indicators show the national savings rate is declining, the survey showed that only 16% of baby boomers nationwide say all or most of their future retirement income will come from Social Security. By comparison, twice as many (31%) existing retirees say Social Security makes up all or most of their income.

Boomers also say they are more likely to wait to collect their Social Security retirement benefits. Around one-in-seven (14%) who are not yet retired plan to start collecting Social Security at the age of 62, compared to one-third (34%) of current retirees who started collecting benefits at that age.

Watching finances
The majority (70%) of boomers who are not yet retired say they plan to pay greater attention to controlling their personal finances when they do retire, compared to 64% of existing retirees.

The survey also found that nearly half (47%) of all boomers nationwide who have bank accounts use online banking - almost the same proportion as younger respondents (48%), and nearly double the proportion of people aged 61+ at 24%.

The nationally representative telephone survey of 1,003 adults was conducted in October and November 2006 by KRC Research.

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