A majority of Americans file for Social Security benefits as soon as they become eligible at age 62. In many cases, you’ll receive higher lifetime benefits by waiting at least until the Normal Retirement Age (NRA) of 66 or higher. Now, the Social Security Administration has launched a new online Retirement Estimator that allows you to project your future benefits assuming different retirement ages. The tool is free and easy to use–you just plug in a few personal facts and your Social Security number; the site digs through your actual lifetime earning history and calculates your monthly benefit assuming different retirement ages. It’s a useful decision-making tool and takes less than five minutes to use.

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Strategy consultants Kevin and Shawn Coyne offer a provocative take on the Boomer retirement hype industry in an article and video interview at BusinessWeek.com. After combing through the numbers, they point out that 78 million Boomers won’t all be retiring at once, and that what some have called a tsunami really will look more like a rolling wave. Upshot: the market for retirement services looks less like a 78 million-person opportunity, and something more like 29 million. As a result, they argue, the growth rate in retired individuals will be much lower than thought, with financial services companies the big losers as they battle for market share to justify their huge investments in this market.

The Coynes argument rests of a few key assertions:

• The actual number of “true retirees,” which excludes those who never worked in the first place, will reach only 46 million in 2017.
• More Americans will choose to work beyond the traditional retirement age of 65
• The growth assumption is less than 3%, and the more likely growth rate is under 1%

My take: It’s always useful to cut through the hype about the Boomer market, where generalizations tend to be taken as fact. But the Coynes’ analysis uses too rigid a definition of “retiree.” The real demographic issue isn’t who has retired from a job and who has not –it’s about the undeniable age tsunami. The challenges of retirement security and health care issues are real and will be defining questions for business and government in the years ahead.

Americans’ confidence about their ability to retire comfortably has fallen sharply and stands at the lowest level in seven years, according to survey research released today by the Employee Benefit Research Institute (EBRI). The percentage of individuals highly confident about their retirement outlook dropped from 27 percent to 18 percent, according to EBRI.

Other key findings:

• Health care is a big worry: About half of current retirees say they are spending more on health care than anticipated; that confirms findings at the Center for Retirement Research at Boston College documenting the growing health care burden.
• Planning still lacking: Only 47 percent said they have developed a serious financial plan for retirement. That’s up slightly from 42 percent a year ago.
• Savings are inadequate: 72 percent say they have saved something for retirement, but 49 percent say it’s less than $50,000.

Wall Street Journal coverage of the survey is here.

Most Baby Boomers don’t understand the basics of Medicare, according to a survey by the National Association of Insurance Commissioners. Investment News reports that 66 percent of boomer respondents said they were “not very familiar” or “not at all familiar” with the plan’s options, such as Part B, which covers some medical costs, and Medigap insurance policies. Only 36% knew that Medicare eligibility begins at age 65 — not at age 62, the starting age for Social Security eligibility. Financial planners are trying to address confusion with their clients, according to the trade magazine:

“To educate their clients, planners are using webcasts and seminars, as well as providing regular updates on how Medicare coverage is changing. Clients and the advisers themselves are seeking this information, said Jay E. Zandell, owner and principal of Z Planning Group LLC, a Phoenix-based long-term-care planning firm. “There are too many misconceptions about what Medicare does,” said Mr. Zandell. “People go into retirement mode with the misconception that as long as they have Medicare, the health issues are addressed.”

Several large banks are offering no-fee banking services to consumers over age 50 as a way to pull in their more lucrative saving and investment accounts. Sounds like a smart move. NBC’s Jean Chatzky reported on the trend recently on the Today show.

Best banks for baby boomers-

Americans saving for retirement aren’t letting the current tough economy deter them from saving more. That’s the conclusion of new survey research released this week by Fidelity Investments. The survey shows that, among current Individual Retirement Account owners, 60 percent have contributed to their IRAs for 2007 or plan to do so. And 32 percent of that group increased the amount invested for the year.

Overall participation in IRA plans still hovers around 40 percent of U.S. households, according to John Ragnoni, senior vice president of retirement products at Fidelity. “We were encouraged by these results,” Ragnoni told me. “It shows IRA owners are still engaged with the retirement savings process and trying to make the contributions that get them on the right path. But we certainly still need overall to get overall IRA ownership up.”

Unfortunately, the lowest rates of participation are among younger Americans who would benefit most from getting an early start on retirement portfolios. Just 32 percent of Americans in their thirties said they are participating in an IRA plan, compared with 57 percent of people in their sixties.

Fidelity surveyed 500 current IRA owners and another 500 people who haven’t opened accounts.

Details on the survey are here.