September 3, 2018
As Baby Boomers retire or prepare to retire, there’s good news and bad news. The good news is Baby Boomers are living much longer – into their 80s. The bad news is that many aren’t financially prepared to handle the gift of a long life.
Can You Afford the Long Life You’ve Been Hoping For?
In 1900 the average lifespan was 47 years – nowadays, that’s just about midlife. The average life expectancy in 2018 is about 80. This means if you’re planning on retiring at 65, you may have another two decades to go. And that means you must have another two decades of income.
A long life is a blessing, but a long life without enough money? That might be a curse.
Baby Boomer Retirement by the Numbers
According to a study by the Insured Retirement Institute – a trade association for the retirement income industry – surprisingly, many Boomers are not financially prepared for retirement.
- 24 percent of Boomers have no retirement savings
- 55 percent have some retirement savings
- 42 percent of those with some retirement savings have less than $100,000
There are a few reasons Baby Boomers are coming up short on retirement savings. Many were heavily invested during the 2008 crash and never fully recovered. Boomers were also the first generation to be tasked with saving for retirement largely on their own. Company pensions were already declining, and the rise of the 401(k) plan was underway.
Also, wages have stagnated, and interest rates have declined. Add to this a relaxed approach to retirement savings and it’s no wonder Baby Boomers are struggling with their retirement funds.
Creative Ways Boomers are Boosting Retirement Savings
Baby Boomers are nothing if not self-reliant, and many are handling their retirement dilemma in some creative ways…
- Staying in the workforce: Some Boomers keep working for the extra income, while others enjoy their work and aren’t ready to give it up entirely.
- Side gigs: Boomers are taking on the gig economy – earning extra cash by working part-time or through contract.
- Alternative lifestyles: Some Boomers have decided to stretch their retirement dollars by living in another country where the dollar goes further. Others are forgoing the expense of homeownership for full-time RV travel or living on a sailboat.
Good Planning Gives You Good Options
Whatever you decide to do during your retirement years, the better prepared you are the more choices you’ll have. Whether you’re a young Boomer still in the workforce, or if you’re already living off your retirement savings, financial planning is key.
Contact a professional today to make sure you’re getting the most out of your retirement.