According to a new MetLife study, many baby boomers don't comprehend what it takes to retire successfully in this day and age.
The survey asked 15 retirement-related questions to 1,213 participants between the ages of 56 and 65. They were asked questions regarding life expectancy, inflation, retirement income and social security benefits. Most only answered five questions correctly.
"Everyone knows they're likely to live longer, but most don't realize that can mean living past age 85 and they fail to calculate how much money they will need for a steady and lasting income," said Sandra Timmermann, lead author. "The 'replacement ratio' of the percent of pre-retirement income necessary to manage essentials, including basic expenses, in retirement is often underestimated and too many people overestimate how much of their savings they can safely withdraw each year."
From the data, researchers found that only 45 percent of people questioned knew they would need between 80 and 90 percent of their pre-retirement income to maintain their current lifestyles. Roughly 42 percent of people still believed that health insurance, disability insurance or Medicare will cover the cost of long-term care.
Although many still have questions concerning retirement, it's well-known that aging in place can be far more cost-efficient than moving to a retirement home. Those worried about the safety of a loved one living at home may want to install a senior alert system. This device can be worn around a person's neck so they can call for help if they fall.