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.
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