Finances for Boomers are in Google Alerts every day. It seems there is a lot to think about given the fact that 77 million Boomers will retire in the next 20 years. That’s about 10,000 retirees per day. Wow!
Americans have never been great ‘savers’ and 401Ks have dwindled over the past 4-years given the stock market losses. (A friend complained that his 401K is now a 201K). In fact, according to a study by the Transamerica Center for Retirement, 54% of all workers have lost confidence in their retirement plans since 2007. The survey also found that more than half of the 60 year olds also indicated that they have not saved enough to sustain themselves for the rest of their lives.
If we look at the upcoming battle over “entitlement” programs (as social security is called in Congress) there is a lot for Boomers to be concerned about.
After passing the Budget Control act of 2011 in November 2011 congress will have to come up with 1.5 trillion dollars of cuts to reduce the deficit. Surely Medicare and Social Security will be hit with these cuts. AARP has indicated that cuts could also affect services such as care giving and senior job placement.
Boomers will have to deal with this relatively grim outlook in their usual creative manner. The Allianz Group of North America has indicated that Boomers with less than 10 years to retirement are doing the right things to prepare. The bad news is that only 14% in their study could count on a guaranteed income from a pension or an annuity while 20% are relying on an inheritance.
Here are few simple pointers to think about as you to get ready for retirement:
- When planning your future be sure to allow for the rise of health care costs, inflation and taxes. With foreknowledge and planning, one can prepare for even the toughest of times, but to be surprised by them is devastating.
- Consider working longer or perhaps arranging for part time employment with your employer. You have valuable skills that may not be easy for your employer to replace.
- Start planning now to make strategic choices about your finances and where you plan to live in retirement.