Planning for Retirement: The Unique Challenges Facing Baby Boomers

Baby boomers are a a generation of firsts. You were the first to attend integrated schools, the first to take birth control pills and the first to bring feminism to the cultural forefront. You are also the first modern generation to largely manage your own retirement investments and the first generation without widespread access to pensions.

If you’re a baby boomer making preparations for your own comfortable retirement, keeping the following points in mind may give you the “first” rate retirement you want:

1) Your Company Won’t Care For You–So You Should
Baby boomers have different concerns than most of their parents had when it comes to managing money and saving for retirement. 

It is likely that your parents worked for companies that provided a pension. The declining economy, however, has led many employers to drop this benefit, leaving workers to obtain their own savings plans. And even company plans like 401 (k)s are largely self directed — meaning that you are making investment decisions that were once determined by financial experts. 

So. Save enough of your own money and be sure to make all the right investment decisions so that you will have adequate income for as long as you live — no matter how long that might be… If that sounds easier said than done, you are not alone. To really plan for your retirement, you might want to consider hiring your own retirement advisor. The right expertise can be invaluable. 

2) You Belong on the Priority List–Not Just Kids and Parents
Many baby boomers are also part of the sandwich generation — a group that financially cares for their aging parents as well as their own children at the same time. According to Pew Research Social & Demographic Trends, 57 million multi-generational households existed as of 2012, which is double the number as existed in the 1980s.

Planning for retirementBaby boomers are known as the sandwich generation because they are often taking care of their parents and their grown children.

More children in their late 20s and early 30s are living at home because they are recovering from a divorce, struggling in an unstable job market or trying to save for their own future. And aging retired parents require emotional and financial support. This presents the sandwich generation with a unique set of financial challenges. USA Today reports that baby boomers are retiring later in life because resources that could go towards building a nest egg for retirement are being used to take care of multiple generations. 

While you may feel obligated (or privileged) to help your loved ones, it is important for you to keep your own finances and your own retirement plans as a priority. There are safety nets in place for the young and the old, but few options for people around retirement age. Social Security is usually inadequate to fund your desired quality of life.

Planning for retirementBaby boomers expect to work more years than previous generations have had to.

3) You May Work Longer, And That’s Okay
Baby boomers are realistic about their retirement options. According to a Gallop Poll daily tracking from Dec. 6-29, 2013, “Nearly half (49%) of boomers still working say they don’t expect to retire until they are 66 or older, including one in 10 who predict they will never retire.” 

While this may sound daunting at first read, it could mean that this generation will have longer access to a regular income stream than predecessors, as well as increased opportunities for mental and social stimulation as provided by the modern workplace. If you need to work past the traditional retirement age in order to make ends meet, you may be among the lucky ones. Working has been proven to keep you mentally and physically young.

4) You Are Going to Live a Long Time

When Social Security was established in the 1930s, life expectancy was only 61. So you might not even get to start collecting the retirement benefit. 

Today, average baby boomer life expectancy is 83 and the average 65 year old man has a one in four chance of living till 92 while the average 65 year old female has a one in four chance of living till 94. So even if you work into your 70s, you might still need to plan for a retirement that lasts 20 years or more! 

Lifetime annuities are one retirement planning product that might help you maintain adequate income for your long life. Working with a financial planner is another way to try to create a plan for longevity.

5) You Probably Have Home Equity to Help You

Baby boomers have higher rates of home ownership than almost any other demographic. Almost 80% of boomers own homes , according to the National Association of Realtors .

In fact, your home equity might be your greatest financial asset. The good retirement planning news is that this home equity can be used to help fund retirement. Downsizing, refinancing or getting a reverse mortgage are all ways you can tap your home equity to help fund retirement. Explore your retirement planning with home equity options.

Ready to Plan?

Boomers at any stage of retirement planning may benefit from diving into New Retirement’s Retirement Calculator for answers and ideas to prep for your dream retirement.

NewRetirement Planner

Do it yourself retirement planning: easy, comprehensive, reliable

NewRetirement Planner

Take financial wellness into your own hands and do it yourself retirement planning: easy, comprehensive, reliable.

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