Why a Retirement Plan is Crucial for Baby Boomers
At the end of World War II, the United States of America experienced an era of prosperity and growth. Wages went up, businesses thrived, and babies were born. Lots of babies. Between the years of 1946 and 1964, the birth rate shot up, and the baby boomer generation was born.
Today there are around 76 million baby boomers alive in the US alone. That’s more than the population of the United Kingdom. Baby boomers account for close to one-quarter of our population, and 37 percent of them are still in the workforce.
Retirement - the end goal
People work for a variety of reasons. Often, the income generated is the main driving force. It’s safe to assume that most would like an end date on their working life – a retirement plan.
Baby boomers first started reaching the modern retirement age of 65 in 2011. But according to the numbers, over half of retirees won’t have enough, even after “cutting back” in retirement. Over half of boomer population believes they will need an annual income of $45,000 or less. But 60 percent expect Social Security to be a major source of their post-retirement income.
This could be a problem. In January 2017 the average annual Social Security retirement benefit for individuals was $16,320, and $27,120 for couples. Many will fall short of their income expectations.
We cannot go back in time and start saving more, saving earlier. (Hint, hint, hint to the GenX and Millennials out there.) But some things can be done now to help prepare for retirement. The last thing you want is to run out of money. If that were to happen, you would lose your choice of where to live, how to live. No one wants to become a ward of the state.
Yet even if this isn’t you, even if you have saved, less than a quarter of boomers are confident about making their money last.
Perhaps you do have a nice chunk of money put aside. It is normal to ask if it is enough. It is normal to wonder if you can afford to retire, and when. Don’t let doubt push back your retirement date. You need to know how to get your money, when to claim Social Security, and what it will take to maintain a steady cash flow. In addition to a retirement plan, we can help with our asset management service.
Creating a retirement plan can answer these questions
Having a retirement plan can make a difference. A retirement plan is a specific type of financial plan which focuses on life on the cusp of retirement and afterward. Around eight hours of work, two hours of gathering documents and another six in meetings, can help give you a clear path – a set of instructions if you will – to a potentially more secure retirement. It’s a small investment of time for a potentially large slice of the peace of mind pie.
Don’t believe a retirement plan is for you? Of boomers who have worked with financial professionals, an overwhelming 85 percent believe that they are better prepared for retirement because of working with a financial planner. A retirement plan may instill confidence, which is quite an endorsement.
A retirement plan will look at your complete financial picture and work to find a dollar amount needed to retire, and a date you can expect to retire. Wouldn’t that be nice?
The average wedding takes six months to plan for one day of your life. People often spend weeks on vacation planning. If eight hours out of your life can potentially give you a clear goal and expectations – in the form of a retirement plan – why wouldn’t you invest the time?
A complete picture
Retirement plans include budgeting guidance, including how and when to claim Social Security. Working with a financial advisor can help you determine how to optimize your income. We can help take the guesswork out of how and when you will get your money. Additionally, we can help with complex issues like planning for health care, long-term care, and Required Minimum Distributions.
Confidence and peace of mind, that’s what a retirement plan can potentially give you. Working with a financial advisor gives you a partner in the journey. Someone you can turn to with questions, who will give you the unvarnished truth while always looking out for your goals and dreams. Want to travel more? Relocate under sunnier skies? A financial advisor can work with you to help you determine what dreams are possible, and how to get there.
If you have questions or comments about baby boomers retirement plan please call us at 1-317-875-0202 or message us with our contact us form.
