For the next 19 years, close to 10,000 boomers will turn 65 everyday and the majority will also be heading into retirement.
For the next 19 years, close to 10,000 boomers will turn 65 everyday and the majority will also be heading into retirement.
I'll warn you up front, the article The Inadequacy Of Our National Savings, appearing in the current issue of Financial Advisers magazine is a long one, but information you really can't ignore.
When was the last time you talked, and I mean really opened up and spent some quality time, with your significant other about your dreams and aspirations for the eventual next phase of your life - retirement or early semi-retirement?
Based on a recent trip back east to visit my elderly parents and in-laws, I realized that for some, stressing over money never ends. Even though I have reviewed both sets of parent’s financials and showed them they are in fine shape, they still worry that they won’t have enough to last their lifetimes. The one difference is that for both of them, their first priority is making certain the kids get an inheritance. In our case, our parents have plenty of money to see them through the end of their lives, and the inheritances they planned on giving are a reserve to dip into should they need it. I imagine it is part of that generation in having a legacy of giving – so unlike the bumper stickers I often see affixed to RV’s stating “I’m spending my kids inheritances.”
During their working years, baby boomers have invested a significant portion of their retirement savings in stocks, boosting equity valuations above historical averages for the past 30 years. As the baby boom generation retires and begins spending from their investment portfolios, future equity returns could decrease. With that in mind, it’s crucial that boomers nearing retirement develop retirement income strategies with prudent as well as realistic expectations of future investment returns.
The Role Demographics Will Play
And now for the bonus round - a few multiple choice questions about Americans and retirement.
Of the many aspects involved when designing a comprehensive financial plan, probably my favorite element of all is helping clients decide on their number. The number I’m referring to is your total net-worth, but more specifically, the amount of liquid assets you’ll need to accumulate by the time you’re ready to retire or stop working for money.
Imagine for a second you and your life mate are headed out on a 30+ year journey, one that you had been planning to take for as long as you both can remember. You’ve dreamed about all the places you’re going to visit and the people and friends you’re going to meet along the way.
You know given your age, this will likely be the last, yet greatest adventure of your life with memories and experiences you’ll cherish forever. And vital to the success of this journey will be the confidence and knowing that the hard earned money you saved your entire working life will last the duration of your great adventure called retirement. You also know that once you set sail for the great unknown, there will be no chance for a do-over 10-15 years from now if you failed to properly plan.
