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The New Retirement: Baby Boomers on the Brink-Part 2
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In Part 1 of this article, I outlined challenges faced by Baby Boomers as they approach retirement. Here's some thoughts for overcoming those challenges. Especially following the recent market downturn, these comments are more important than ever.
Boomers need a new vision for retirement and financial professionals who can help them achieve it. Planning for the future should include:
- A migration strategy that transitions you from your current work to the work you will do for the rest of your life. This may mean changing jobs to an employer that needs experienced workers, part-time self-employment as a consultant in anticipation of full-time self-employment later on, or starting a new career or business altogether.
- An accumulation strategy that focuses less on accumulation until age 65 with liquidation thereafter and more on accumulation for short and mid-term goals between age now and beyond. The idea of age 65 as an endpoint for accumulation should be replaced with the concept that accumulation and spending needs and objectives are subject to change throughout a productive life that may extend to age 85 or longer.
- A healthcare strategy that reflects the fact that you are likely to be healthier and live longer than your parents. This may require a shift away from dependence on traditional private and government health care plans to high-deductible catastrophic stop-loss plans, combined with personal savings earmarked for medical care.
- A lifestyle strategy that embraces downsizing and downshifting to reduced spending and consumption well before one’s traditional retirement years.
Now, the idea of working until you die or cutting back while you’re still in the peak of your earning years may not be all that appealing. But with proper planning pursuing these strategies allows us to think of age 65 not as retirement age, but as we used to say in the 60s, the first day of the rest of our lives. That’s not exactly Ozzie’s golden years, but it’s rosier than Bruce’s vision of retirement.
If you're up to taking on this retirement planning task on your own, go for it. If not, don't hesitate to find a qualified financial planner to work with.
Your plan may turn out differently than you once imagined. But you're better off with some plan versus no plan at all.
