Baby Boom—Or Bust?
Have the baby boomer generation saved enough for retirement?
Between 1946 and 1964, almost 80 million babies were born in the United States. The second World War had been good for America’s economy, helping it climb out of the Great Depression. In what was known as “the fabulous 50s,” industry grew at unparalleled levels and provided steady employment as well as rising incomes. The four-child family became the American ideal. Coupled with a suburban house in the suburban house, two cars in the driveway, and a wonderful new invention called the television in the living room. Families on one income were the norm—and, for the middle class at least, one wage was enough to supply families with an increasing number of luxuries and previously unattainable experiences.
While many of baby boomer generation have certainly invested wisely for retirement, most have simply not saved enough. There have been remarkable social and economic changes since the 1950s, the decade in which baby boomers grew up with an innate and innocent confidence that life could only get better. Unlike their fathers, men who were likely to stay with one company and draw a sizable pension, many baby boomers have hopped from job to job—sometimes due to boredom or a desire to find work that would make them happy, and sometimes because of mergers, layoffs, outsourcing, and early-retirement buyouts.
Escalating housing prices, education, and the cost of healthcare have diminished retirement savings as the baby boomer generation have found themselves lodged between university expenses for their children and maintaining care for their ageing parents. The prevalence of divorce has also left many baby boomers with reduced IRAs and 401Ks than they had envisioned.
There are those, too, who haven’t saved anything. Did they live paycheck to paycheck without ever having anything to save?
Financing Retirement: How Much Will You Need?
The oldest of the 78 million baby boomer generation turned 62 in 2008. In doing so, they qualified for reduced-rate social security payments. In the upcoming years, more and more will qualify. As we know, social security replaces only about 40% of pre-retirement income. Investment advisors suggest that retirees will need 60-80% of their pre-retirement income in order to maintain a comparable lifestyle. That percentage assumes that their expenses will decrease—that retirees will simply reduce their budgets to redress the financial imbalance. Realistically, even if they want to be more frugal, it won’t be easy. Supplemental Medicare policies and long-term care insurance are new and potentially prohibitive expenses to be absorbed by retirees. Property taxes, home and auto insurance, energy costs, and food expenses will all continue to rise.
What’s The Worst That Could Happen…
A baby boomers’ biggest fear must be that a crisis in healthcare will use up funds they’ve set aside for retirement. Advances in medical science are allowing people to live much longer than in any other time in human history. The quality of this extended life is often not the best, however, and having to pay for prescriptions to prolong life is becoming more and more expensive. Boomers Generation is concerned about seeing out their final years in an unpleasant but expensive nursing home or even having to ask their children for help. This fear is another factor that fuels the desire to save just a little bit more money. A fear that often manifests itself by the Boomer Generation taking even less from retirement nest eggs in order for them to grow to ensure the funds will be available when work is no longer an option.
How will the baby boomer generation find needed funds in retirement?
A survey by The Associated Press reports that the lion’s share of baby boomers hope to retire from their current jobs by the age of 63. 66%, however, anticipate they will work for pay after retiring. 27% will continue to work due to financial necessity, 43% claim they can’t imagine, “sitting around doing nothing,” and the remaining 19% so that they will have money available for extras they could not afford on their retirement income.
Most baby boomers can’t imagine a full-time leisure nor full-time retirement. They see a necessary fusion of both. As 30 years of retirement is a real possibility, The boomer generation is looking for new challenges, not chairs to rock in. Some plan to launch new careers or use their skills as volunteers. Others will go back to school, start their own businesses, or try to make a hobby profitable.
Are “Stretched and Stressed”? Or are you a “Wealth Builder”?
Harris Interactive® and Age Wave, in The New Retirement Survey, have surveyed a large and diverse group on their way to identifying five different types of soon-retiring baby boomers: the “Empowered Trailblazers,” the “Wealth-Builders,” the “Leisure Lifers,” the “Anxious Idealists” and the “Stretched and Stressed.”
Close to 18% of those surveyed were “Empowered Trailblazers,” those who look forward to retirement because they see it as a progression to another phase of life. Around 90% in this group do intend to work after retirement, but they will also be busy with travel, volunteering, taking or teaching classes, and generally enjoying anything new that comes along.
“Wealth Builders” (20%) are looking for more financial security for themselves and their families, and money is the main reason 79% will continue to work after official retirement.
“Anxious Idealists” (13%) worry that they do not have enough money to retire, particularly since they want to leave an inheritance for their children and a legacy to charitable organizations.
“Leisure Lifers” (13%) just want to relax. They’re tired of work, most likely never enjoyed their jobs, and most definitely don’t want to work after retirement. They had low income levels and did not save enough, but they believe “someone will do something” to help them if they get into trouble.
The “Stretched and Stressed” (18%) are all too aware that they have not saved enough for retirement. They will work because they have to, though they don’t look forward to it. This group is the least optimistic.
82% will identify with a group that feels it requires more money for retirement. With the economy in constant fluctuation and costs of every day items rising and rising, it’s small wonder most people find themselves in the “I need more money” category. Peace of mind means knowing not merely that you will somehow be able to survive, but that you’ll have the funds to allow you to enjoy the happy retirement envisioned by those we call the “Empowered Trailblazers.”
Who’s in Control of Your Future? YOU Are!
Happily, no matter how old you are right now, it is very possible to become a “Wealth Builder.” Great news! Of course you don’t have to become a workaholic or even commit to work full time. Rather, you can build an income generator that will provide funds for you to invest now and to fund your retirement for many years to come. You can do it in the comfort of your own home and in private, or even from your RV or hotel while you vacation. As long as you have access to the Internet as well as a telephone, you can build a successful, lucrative and legitimate business that will empower you to move from a state of financial anxiety and pessimism to one of financial confidence and security. Are you ready to enjoy the rest of your life in a style you may never have imagined possible?
Is there still time? Of course there is. Clearly though, the sooner you get started, the better.
A team of skilled business professionals is all set to help guide you through the steps of building a successful home business that can help free you from financial concerns about the future. If you are ready to take control and secure your financial future, look no further.
Simply complete the form on this page for additional information.
