Baby boomers must ensure they are ready for retirement

The baby boomers have started to retire and there is plenty more to come.

The “baby boom” refers to a generation of babies born between 1946 and 1964.

Over the decades this population explosion has faced many challenges.

Look back to the 1950s and early 1960s and you will note that more schools were needed to accommodate the large numbers of baby boomer students.

During the late 1960s and early 1970s, when many boomers were becoming young adults, the desire to own a home contributed to housing shortages and ­larger numbers entering the workforce increased the competition for jobs. Now in the 2000s, the first round of boomers have already retired and the remainder are in the final stages of their careers.

As the gap to retirement closes, the baby boomers continue to be presented with enormous challenges. 

Only a small percentage of baby boomers retiring today are well prepared financially and an rising number of them expect  retirement to be financially difficult.

It is no secret that baby boomers were hit hard by the tough markets of 2008 but retirement is on the doorstep. How do you plan for your retirement now?

Savings

Expenses are a great place to start when it comes to preparing for retirement.

Review current expenses then look at what will be eliminated by the time you retire, such as the mortgage payments, car payments or your child’s education.

If you are quitting a job that requires you to spend money on clothes, transportation and so on, these expenses will vanish, increasing your retirement savings.

Look at what forms of income will be at your disposal during retirement.

With market fluctuations, changes in pension payments, both personal and Government, and inflation, it can be more difficult to determine future income but you will have an idea of what is presently available to you. The bread and butter in retirement will be your investments.

They may have taken a hit in the recent economic downturn but few investments can be considered completely secure.

Therefore, as you near retirement or even during retirement, it is important you decide carefully how to invest your money. 

Moving into safer investment vehicles that provide consistent, stable and predictable rate of returns will help to create a steady income when you retire.

When preparing for retirement or during the early years of retirement, it is worth consulting a good financial planner, someone who is qualified and experienced in pre and post-retirement planning.

While financial planners cannot play a big role in what you have already saved or what you may have lost in previous investments, they can review your financial situation including your budget, outstanding debt, investments and pension plans.

They can offer advice on what you may need to retire comfortably and what investment vehicles are suitable to fund any shortfalls. 

They will also discuss other costs that may occur and, based on your retirement goals, the chances of outliving your money.

Carla Seely is a senior wealth manager at AFL Investments. Call her on 294-5712 or e-mail her at [email protected]