What We Can All Learn From Baby Boomers on Safe Retirement
Anyone who was born between 1946 and 1964 is classified as being part of the baby boomer generation. Although the oldest members of this generation will be turning 69 this year, a shockingly high proportion of them have not planned nearly well enough for their retirement. Take a look at the information below to see what the next generation can learn with regards to safe retirement.
Don’t Rely on Social Security
Many baby boomers failed to implement any type of savings or investment plans for their retirement years because they firmly believed that they would be able to rely solely on Social Security payouts upon stopping work. However, what many of them don’t realize is that Social Security will only be replacing up to 40% of their pre-retirement income at the time that they stopped working.
This means that currently, the average retired person will only be able to collect a meager $1,341 a month in this manner – definitely not enough to live comfortably on. In addition, it is estimated that the Social Security Trust Fund will be depleted by 2029, which could result in retiree benefits from this program being cut by as much as 30% the following year.
Take Advantage of Workplace Savings Plans
On average, baby boomers usually expect to retire with as little as $127,000 in savings, which is nowhere near enough to live on – especially when you take into consideration that financial expert recommendations are that no more than 4% is withdrawn from any retirement fund per year. This would effectively translate into roughly $5,000 per year to actually live on.
Although a large number of workplaces offer a range of retirement savings plan options, up to 20% of baby boomers have not seen the need to contribute to plans such as 401(k) options. Not only is this putting their retirement at risk; it is in effect throwing away free money because many employers who offer these plans will put in a matching contribution up to a predetermined % of the employee contribution.
Take Lifestyle Changes into Consideration
Nowadays, many baby boomer retirees don’t want to just check into a retirement village and while away their final years. Many of them see this as a time to learn a new hobby or pursue an interest that they may not have had time to enjoy while working, such as traveling, taking up a sport or even becoming snow birds. While this is a good idea in theory, many boomers simply cannot afford to live this way because they did not make the right financial preparations ahead of time. If you would like to pursue a more active lifestyle, it is essential to start saving as early as possible so that you can make your retirement years as enjoyable as possible.
If you would like your retirement years to be as financially stress-free as possible, it is imperative that you speak with the right investment professionals. Contact us at Dream Bridge today to find out which investment options will be most suitable for you.