WASHINGTON, May 12 Most baby boomers say they are financially unprepared for a potential disability, according to a new survey conducted by Harris Interactive on behalf of America's Health Insurance Plans (AHIP). Baby boomers would have difficulty paying bills and many would have to tap into their retirement savings if a disability occurred.
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"Baby boomers have too much debt and not enough savings to weather even a short-term disability," said Karen Ignagni, President and CEO of AHIP.
The survey assessed how financially prepared baby boomers are if the primary wage earner in their household became disabled and was unable to work for an extended period of time. Most baby boomers (55 percent) say they are not at all or somewhat unprepared. Only 15 percent say they are very or extremely prepared if a disability occurred.
Baby boomers were also asked how long they could go without their primary wage earner's income before they had difficulty paying all their bills. Nearly two-thirds (64 percent) would have difficulty within the first year, half (49 percent) would have difficulty in the first six months, and a third (33 percent) would have difficulty paying all their bills in just the first three months. Most baby boomers said they would have difficulty making their mortgage payments, car payments, credit card payments, and/or supporting dependents within the first year.
Almost a third (32 percent) of baby boomers say they would have to tap into their retirement savings if the primary wage earner in their household became disabled. Seventeen percent admit they do not have a retirement savings to draw upon.
Most baby boomers also admit having a significant amount of non-mortgage debt, including credit cards debt and auto or education loans. More than half of boomers (52 percent) have more than five thousand dollars in non-mortgage debt. A quarter (25 percent) of boomers have more than twenty thousand dollars in debt and nine percent have debt of more than fifty thousand dollars.
"Most baby boomers will face serious financial hardship if a disability occurs," said Humphrey Taylor, Chairman of the Harris Poll.
A memo outlining the survey findings is available here: http://www.ahip.org/content/fileviewer.aspx?docid=23267&linkid=200730. The survey questionnaire can be found here: http://www.ahip.org/content/fileviewer.aspx?docid=23267&linkid=200719.
This is the third in a series of surveys assessing baby boomers' awareness of and knowledge about disability income protection. More information about these surveys is available at www.YourIncomeAtRisk.org.
America's Health Insurance Plans - Providing Health Benefits to More Than 200 Million Americans
Harris Interactive conducted an online survey on behalf of AHIP between April 25-29 among a nationwide sample of 3,607 adults aged 18 and older, including 1,182 Baby Boomers aged 44 - 62. Data were weighted to be representative of the total U.S. adult population that is online on the basis of region, age within gender, education, household income and race/ethnicity, and for propensity to go online. No estimates of theoretical sampling error can be calculated; a full methodology is available.
SOURCE America's Health Insurance Plans