How to turn around the so-called baby boomer retirement crisis

Every day, roughly 10,000 baby boomers retire and nearly half of them have less than 5% of their annual income saved for retirement. And zero is a far cry from the $1 million to $1.5 million AARP recommends we save for retirement.

In addition to not saving, many are facing skyrocketing healthcare and living costs, leading some to say we’re in a retirement crisis.

The issues boomers face are unique, and the solutions varied.

Challenges of boomer generation

It’s not just a matter of saving more. Baby boomers are facing challenges previous generations didn’t.

The financial crisis of 2008, along with a period of low interest rates, means the baby boomers will encounter more financial stress as they live longer.

Other challenges boomers face are:

Health issues

Cancer and heart issues, along with growing impact from dementia, are draining finances more than most boomers expected.

Aging parents

The parents of baby boomers are living longer and relying on financial and care assistance from their retiring adult children.

Years in retirement

Baby boomers are living longer so their financial assets need to last longer.

Lifestyle goals

Baby boomers have longer and more expensive “bucket lists,” leading them to spend more money on fulfilling dreams and traveling.

Few pensions

Many boomers don’t have company pensions like their parents did and have to rely solely on their own retirement savings, like 401(k) plans.

The solutions

One thing is for certain: the longer boomers wait to reset and reprioritize their finances, the harder it will be for them to retire and take care of their family.

The solutions aren’t rocket science, but they do take discipline.

1. Modify your investment behavior

Plan on a slow but steady rate of saving and Investments. Don’t expect to get rich off of picking dark horse stocks or bouncing money from one fund to the other. Diversifying across the global markets and staying disciplined have proven to be successful over the long-term.

2. Change your lifestyle

Start saving today. And then save some more. That likely means cutting back on travel or going from two cars to one, for example. As this study by the AARP Magazine suggests, you can double, on average, your nest egg in the last decade of your working life if you save diligently and Invest conservatively.

3. Be smart with property

Many boomers are downsizing the primary home (exiting the suburbs) to a more convenient urban setting, moving closer to the, along with selling the vacation homes. If done right, you could invest the proceeds to extend your retirement funds.

4. Create a financial plan with your family

One reason boomers haven’t saved enough is because many didn’t learn how. Don’t repeat that same mistake with the following generations. Involve your children in the education and planning of your financial future. Working together, you can help them establish good habits that will lead to a more stable future.

5. Focus on your legacy

Boomers often have acquired assets that the next generation has little interest in. Whether it’s a business you’ve built, a collection of art or a timeshare vacation home, be realistic about what it will mean if you leave it to the next generation. Will it be an asset or a burden? If it’s not something they value, develop a business transition plan or convert assets to investments.

6. Don’t go it alone

Finances are an emotional issue. Control, trust and shame hinder transparency and causes many to live in financial isolation. Talk to your spouse and talk to your family. And work with a financial planner who can help take the emotion about of money and help you plan for retirement and the legacy you will leave behind.

If you’re ready to start the conversation about getting set for retirement, reach out to us.


Baby boomer retirement

Wipfli Financial Advisors, LLC (“Wipfli Financial”) is an investment advisor registered with the U.S. Securities and Exchange Commission (SEC); however, such registration does not imply a certain level of skill or training and no inference to the contrary should be made. Wipfli Financial is a proud affiliate of Wipfli LLP, a national accounting and consulting firm. Information pertaining to Wipfli Financial’s management, operations, services, fees and conflicts of interest is set forth in Wipfli Financial’s current Form ADV Part 2A brochure and Form CRS, copies of which are available from Wipfli Financial upon request at no cost or at Wipfli Financial does not provide tax, accounting or legal services. The views expressed by the author are the author’s alone and do not necessarily represent the views of Wipfli Financial or its affiliates. The information contained in any third-party resource cited herein is not owned or controlled by Wipfli Financial, and Wipfli Financial does not guarantee the accuracy or reliability of any information that may be found in such resources. Links to any third-party resource are provided as a courtesy for reference only and are not intended to be, and do not act as, an endorsement by Wipfli Financial of the third party or any of its content or use of its content. The standard information provided in this blog is for general purposes only and should not be construed as, or used as a substitute for, financial, investment or other professional advice. If you have questions regarding your financial situation, you should consult your financial planner, investment advisor, attorney or other professional.
Pat Brault

CPA, CTFA | Principal, Senior Financial Advisor

Patrick Brault, CPA, CTFA, is a Principal and Senior Financial Advisor for Wipfli Financial Advisors in Minneapolis, MN. Patrick focuses on comprehensive financial planning and investment management for business owners, retirement plans and foundations, as well as advanced planning for seniors and family caregivers.

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How to turn around the so-called baby boomer retirement crisis

time to read: 3 min