Baby Boomers Look toward
Retirement
Over the
next two decades, the most chronicled generation in America will gradually
enter retirement. At that point, each wave of baby boomers will quickly discover
if their retirement plans, Social Security, and personal savings will be
sufficient to maintain their existing lifestyles and needs.
Baby
boomers—a name given to those born from 1946 to 1965—have been noted for their
creation of the “computer age,” quest for physical fitness, and expectations
for living long and full lives. Now, as the boomers pass into middle age, many
are beginning to focus their attention on retirement.
Unlike the
previous Great Depression-to-World War II generation, many baby boomers believe
they cannot depend on receiving Social Security benefits during their
retirement years. In fact, many economists question the future “security” of
the Social Security trust funds.
To further
compound concern, many employed boomers may not have employer-funded retirement plans. Since, in today’s work world, employees, rather than employers, generally assume full
responsibility for funding their retirement plans, it is no surprise that
uncertainty and worry occupy the minds of many of those without guaranteed
pensions.
Broadening Perspectives
What can
boomers do to determine if their savings and assets will sufficiently fund
their retirement years? Definitive answers are often elusive. After all, life
is often filled with many variables, and no one really knows for sure what the
future holds. However, even with these constraints, boomers can gain much
insight by estimating and analyzing the following:
o potential income sources (e.g., income-producing real estate, inheritances, etc.);
o projected balances of retirement and savings plans;
o costs of future health care needs;
o annualized rate of inflation over retirement years;
o amount of Social Security income to be received;
o percentage of present income required during retirement years;
o length of years retirement may last or life expectancy.
Survey Says. . .
A 2002 survey conducted for the AARP* found that
only 20% of boomers are very satisfied with their personal finances. In
contrast, 31% feel their financial situation is worse than they expected
at this stage in their lives. Only about one-half of boomers, 51%, feel
confident that they will achieve their financial goals.
As is true
of every generation facing the retirement planning process, baby boomers should
have a disciplined savings program in
place. If you’re a baby boomer, keep in mind that periodic or haphazard
deposits may be counterproductive. With a commitment to success and a scheduled
plan, you can work toward building the necessary retirement funds to secure
your own financial future.
Source:
Liberty Publishing
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