Boomers must plan for the new golden years: “Work-Tirement”!

Since the proposed changes to Social Security have become a national debate, many Americans are starting to think seriously about revising their retirement plans. People are now healthier and expected to live longer and with the recent unprecedented downturn in the economy and stock market fluctuation many of us Boomers will have to delay full time retirement and extend their work life.  It is no longer unusual to spend as much time in retirement as in working full-time. Many retirees are depending on relatives, government assistance and part-time work to survive. The 70-year-old at the grocery check-out is likely to be partnered with another retiree bagging groceries.

Special Challenge for Boomers

Baby Boomers will make up the largest population of retired workers in history with the longest life expectancy.  Boomers will be the most diverse group of retirees. They may be funding their children’s education, supporting adult children, and caring for elderly parents. And the greatest fear for the baby boom generation is

“Outliving Their Money”!

It is for these reasons Boomers will be engaging in what I have termed

“Work-Tirement” to keep up with their financial needs.  

While some Boomers have done an adequate job of saving for retirement, many wait until it is too late.  People have a difficult time estimating their retirement expenses because they fail to keep track of their own spending habits.

Estimate Your Spending Habits-Give Yourself A Financial Check Up

It’s a fallacy to assume that your spending habits will dramatically decline during retirement. Many retirees travel and pursue other activities that keep themselves occupied. The first step in retirement planning is to get an estimate of your expenses—your annual cost of living.  There are several ways to do this.

• Keep a journal of everything you spend for a few months.
• Compile your years expenses via cancelled checks, bills, and cash withdrawals.
• Determine your take-home pay over a period of time.  Calculate what you’ve saved—what’s left will give you an idea of what you are spending.

• Decide what kind of income you will need to fund your retirement lifestyle.

Retirement Income

After you’ve estimated your expenses, you’ll need to determine if your retirement income will cover your living expenses.  Only one-third of Boomers save enough of what they need to retire at their income level, according to USA Today.  The traditional “three-legged stool” of retirement income consists of personal savings, Social Security and pensions has now been expanded to “five” to include maintaining good health and job skills/competencies.

All of these dynamics will re define retirement and may call for us Boomers to stay engaged in work beyond our golden years and have a retirement game plan.

When it comes to funding your golden years, “HOPE” is not a successful strategy.

Credit Unions can become heroes by offering more Retirement Services to this large generation of American members!