The Transamerica Center for Retirement Studies recently wrapped up its annual retirement survey that measures employer and worker attitudes towards retirement. The results of this survey provide interesting insight about how three generations participating in the workforce (Millennials, Generation X, and the Baby Boomers) view retirement.
There is no question that the Boomers (those born between 1946 - 1964) are not only transforming retirement, but society as a whole. Transamerica calls this generation the "trailblazers of the new retirement" because they have "re-written societal rules at every stage of their life." There is too much information to unpack the entire Transamerica survey in this blog, so we will focus on the Boomers and some of their retirement blindspots they need to address as they approach retirement.
If you are a Boomer, you will want to keep reading.
1. Boomers Need to Learn More About Retirement Planning
Survey Results: Over half (52%) of Boomers want their employers to provide more education and advice about how they can reach their retirement goals and one-in-four say they prefer not to think about retirement investing until they are closer to their retirement date. Plus, only two in ten Boomers say they know a "great deal" about Social Security while almost four in ten (38%) expect Social Security to be their primary source of retirement income.
Action to Take: Attend a Pre-Retirement Seminar
Learn as much as you can about your retirement benefits including Social Security. LAGERS provides pre-retirement seminars designed for Boomers and many seminars include presentations about Social Security and Medicare.
2. Boomers Don't Have a Back Up Plan for Retirement
Survey Results: Around 72% of Boomers do not have a back up plan to provide income if they are unable to work prior to their desired retirement date. This is astonishing considering two-thirds of Boomers are planning, or are already, working past age 65 and half are concerned about declining health that will require long-term care.
Action to Take: Make a Plan for Pre-Retirement Death or Disability
The chances for death or disability increases as we age, so Boomers need to address this risk in their planning. LAGERS provides disability and survivor benefits and you and your loved ones should know what you (they) might be eligible for should the unexpected happen.
3. Boomers Should Keep Skills Up to Date
Survey Results: According to the Bureau of Labor Statistics, only about one in five Americans age 65 and older were working in 2016. The low number of workers in this age group could be for many reasons, one reason being jobs not being available for these workers. Only 42% of Boomers report that they are proactively keeping their job skills up to date. Boomers must take steps to enhance their knowledge, skills, and abilities if they plan to continue working.
Action to Take: Learn a New Skill
Identify a weak spot in your skills or knowledge related to your work and make a plan to address it. Your employer may offer training or know where you can get it. There are also multiple in-person or online courses that may be available. Check into other resources such as books, websites, or newsletters. Bottom line: Never stop learning!
4. Boomers May Not Be Saving Enough
Survey Results: The median retirement account balance for Boomers is $164,000. This means that half of Boomers have saved more than this and half have saved less. The median retirement savings rate for Boomers is 10% of their income and over half (55%) of Boomers report that they are concerned about outliving their savings.
Action to Take: Analyze Retirement Income Sources
One source of your retirement income will be from your LAGERS benefit. This means you don't have to save as much as someone that doesn't have a lifetime pension (e.g. most workers in the private sector). However, your LAGERS benefit most likely will not be enough to pay all of your expenses AND live the lifestyle you want. Figure out how much income your LAGERS benefit will provide, how much your Social Security benefit will provide, then determine how much you need to save in addition to these sources to meet your goals. You can do much of this work using online calculators.
5. Boomers Need to Pursue Healthy Lifestyles
Survey Results: Seven in ten Boomers say they are concerned about their health in older age. Boomers do report, however, that they are doing OK safeguarding their health with over half saying they are eating healthfully and excersing regularly.
Action to Take: Set Health and Fitness Goals
One of the most important facets of retirement planning is to maintain a healthy lifestyle. As healthcare costs continue to rise, being healthy actually keeps money in your pocket. Fitness is not a destination, it's a lifelong journey. Write down some goals to acheive over the short and long term regarding your health. Maybe you want to make regular visits to a gym, lose 10 pounds, or excersize a few days a week. Whatever it may be, DO SOMETHING. Writing it down will help you stick to it and it will pay off in the long run.
As a Baby Boomer, you are on the cusp of retirement. If you are doing well in all of the areas discussed in this blog - congratulations, keep it up! If not, addressing your blind spots as early as possible will help you achive the retirement you deserve.