Boomers Advised to Save $48,500 a Year for Retirement : Aging: Insurer’s study is latest salvo aimed at scaring 40-something generation into annuities. Elderly are also targeted.

The generation that took to the streets in youthful protest might have to return in old age to sell pencils.

A new survey of 600 baby boomers shows they will need to sock away at least $48,500 a year to meet their expectations for a comfortable retirement.

The study by Equitable Life Assurance Society also found that current retirees can expect to deplete their savings by their early 80s.

“Although boomers and pre-retirees are focusing on saving for retirement, they need to set their savings goals higher,” said Jim Benson, president of New York-based Equitable Life, a subsidiary of Equitable Cos. Inc.

The study comes as life insurers step up their attempts to scare the financial daylights out of baby boomers. These Americans born between 1946 and 1964 represent a lucrative market for annuities, a type of investment insurers are pushing to make up for stagnant life policy sales.

The elderly are also a target of financial-services companies selling investments geared toward providing steady income. As the population ages, Americans can expect the pitches to become more strident.

“Companies are getting more aggressive, and they’re adding to the realization that the retirement savings rate is too low,” said James Ramenda, an analyst with Northington Partners in Avon, Connecticut. “If someone’s 43 years old and only has $100,000 put away, they only have 17 years if they expect to retire at 60.”

Researchers in March interviewed boomers with a household income of at least $50,000. About 77 million Americans were born during the 18-year baby boom, and represent almost one-third of the U.S. population.

Boomers surveyed, with a median age of 43, said they want to retire at age 60 and expect to need median savings of $928,000 to feel “financially secure.”

This group has only saved about $103,000 for retirement, which Equitable said means they will need to save $48,530 a year to reach their goals. That estimate assumes no inflation.

Older workers born between 1910 and 1939 want to save $843,000 for a financially secure retirement. With a median age of 59, they have to sock away $93,100 a year to reach this level by their expected retirement at age 65.

The study also included interviews with 300 retirees born between 1910 and 1939 whose household income was at least $50,000 in today’s dollars upon retirement.

At the time they stopped working, these retirees had a median of $337,000 in assets, not counting real estate. Since retiring, their non-real estate assets have dwindled to $220,000.

Since the retirees in the study had a median annual income of $17,688 and $29,000 in expenses, they will deplete their savings by the year 2010--or a median age of 82, the study found. The calculation assumed 3% inflation and a 6% return on assets.

Retirees “run the risk of facing a potential monetary shortage, particularly in the case of a serious illness,” Equitable’s Benson said.

The survey found that stock and equity mutual funds are the most popular investments among boomers and pre-retirees, while real estate topped the list of retirees. Stocks and equities were the No. 2 investment of choice for those saving for retirement, while stock and equity mutual funds were second among retirees.

Cash-value life insurance and tax-deferred annuities ranked in the top eight investments for all three groups. Insurers, faced with sagging life insurance sales, are trying to grab some of the retirement savings business away from mutual funds and banks.

Premium revenue for 106 key life insurers as of Dec. 31 fell 5% to $6.47 billion from a year earlier, according to the Life Insurance Marketing and Research Association in Hartford, Connecticut.

A survey of 109 companies by the marketing association showed that U.S. annuity sales rose 15% to $99.3 billion in 1994. Annuities provide a series of payments in exchange for a lump-sum payment.

Like Equitable, other annuity sellers are trying to build sales by boosting name recognition. Los-Angeles based SunAmerica Inc., a financial services company, and Houston life insurer American General Corp. are launching advertising campaigns this spring.

“Companies are going straight to the customer looking to build name recognition,” Ramenda said.

Equitable started its annual survey two years ago. Last year’s focused on baby boomers, and included their younger baby buster brethren born between 1965 and 1972.

This year, Equitable went with pre-retirees and retirees, two audiences who have more money to save--and perhaps easier to scare.