The baby boomer generation is 78 million strong and the first group is turning 64 this year. Being this close to retirement brings up the questions of when and how for those that haven’t made that decision yet.
However the savings rate isn’t great for Americans in general and according to this articleby Roger Showley this generation has an average nest egg of $84,000. This means a lot of people have very little to none.
The good news is because of longer life spans it isn’t too late. The financial consultants quoted in the article had six steps for improving the retirement picture.
1. Plan on Inheritance – Many baby boomers will get sizable inheritances which help with their savings. Although we’re not counting on it, Mr. Boomer and I will probably inherit a nice amount between the two of us.
2. Work Longer– I really don’t want to work the standard 40-hour week longer than my current plans. However, I’ve started considering working part time or freelance instead. Working longer doesn’t mean doing the same thing you are now.
3. Plan Your Retirement -The best quote in the whole article is in this section. Andrew Constanzo, a financial planner, says “…most people spend more time during the year planning for one week of vacation than the ultimate vacation, which is retirement.” If you haven’t started planning yet, start thinking about it now.
4. Health Care Considerations – Be prepared for higher health care expenses as you age. Funny About Money has recently talked about selecting Medicare supplemental insurance and the different options. This doesn’t include long term care insurance. Mr. Boomer really hates paying for insurance so I don’t know what we’re going to do about that.
5. Plan on Social Security – Despite all the fear-mongering social security is not going anywhere for this generation. Include it in your plans but start thinking about the best time to start withdrawals. We’ve decided when Mr. Boomer will start withdrawing but not me.
6. Be coupled– You’ll live longer (and be happier) if you are married or partnered than a single person. There are exceptions, but this is statistically true. Financially, you’ll probably be better off as well with social security strategies For married couples and/or multiple pensions.
What do you think about these steps? They’re a good start to retirement preparation and the next phase of life.
photo credit: scottwills
Content © Bucksomeboomer 2009-2010. All Rights Reserved.
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I think these 6 steps are valid for even generation X. We also have much more time to save for retirement. What you said about people spending more time planning for a vacation than for retirement is sad but probably true…
.-= Random Thoughts of a Jersey Mom´s last blog ..Spending Hard-Earned Money =-.
You’re right, Jersey Mom. They are good steps for more people than boomers. I know my in-laws never thought about retirement and suddenly it was time. Health issues really forced them to retire.
$84,000? Wow! I am official scared now. If I didn’t have incentive to kick my retirement saving into overdrive as a member of Generation X, I do now. That article was a wake up call. Thanks for sharing it.
.-= Hank´s last blog ..Own The Dollar – One Year Ago This Week – March 2009 =-.
Hank, I hope your generation does learn from its elders and don’t end up with only the government check to live on.
Today’s baby boomer is much more likely to consider a second job considering the way pensions and the economy are taking their toll on their savings. That’s why planning ahead is so important and looking after one’s health should be mandatory. But many balk at spending a little money on prevention and would rather stick out their hand for a quick fix with side-effects. Oh well, to each his own.
.-= Marie Leonard´s last blog ..Baby Boomers Concerns Keep Them Working =-.
I agree with planning ahead. I just think we started our career in the pension age and it’s changed along the way. Maybe baby boomers are a little bit cheated by this transition. We didn’t know we had to plan in our 20s.
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