The Boomers Are Coming! Retirements in Jeopardy? (55, pension plan, social security)
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I know, I know - yet another thread about us boomers.
But I thought this number was interesting:
Starting in January, more than 10,000 baby boomers a day will turn 65, a pattern that will continue for the next 19 years.
That's a big number! And aside from the large impact boomers will have on Social Security and Medicare, the article included the following factors:
-- The traditional pension plan is disappearing.
-- Reliance on stocks in retirement plans is greater than ever.
-- Many retirees banked on their homes as their retirement fund.
Time to panic? Too late to plan? Will boomers be working 'til they drop?
Boomers that weren't smart enough to save and invest for retirement when they were employed are looking at a very bleak life in their "after-employment" years...with no way to ever change things until the day they die, which could be decades of living a life they never dreamed. Well, maybe if they win a lottery or inherent money from a family member that was smarter than they have been. Well, maybe not - because they'd probably blow that too.
I know, I know - yet another thread about us boomers.
But I thought this number was interesting:
Starting in January, more than 10,000 baby boomers a day will turn 65, a pattern that will continue for the next 19 years.
That's a big number! And aside from the large impact boomers will have on Social Security and Medicare, the article included the following factors:
-- The traditional pension plan is disappearing.
-- Reliance on stocks in retirement plans is greater than ever.
-- Many retirees banked on their homes as their retirement fund.
Time to panic? Too late to plan? Will boomers be working 'til they drop?
There is no magical retirement age and that is the mistake many people make. Even if you have a three legged stool for retirement there is no magic age that says everyone once they reach it is able to retire. Lets look at a progression of the three stools.
A. You have a pension and at a certain point of service and age you are fully vested. Does that mean you can retire then? No, it may not be enough money.
B. You reach 59 1/2 (yeah I know if you retire 55) and you are able to access your tax sheltered investments. Does that mean you can now retire? Depends on how much you have.
C. You reach Social Security eligibility does that mean you can retire? Maybe and maybe not. If 62 when combined with everything else is it within your financial means? Do you need to wait for Medicare to kick in so you have health insurance?
If people think there will be a magic age they can retire without crunching numbers and following a plan they will probably be in for a rude awakening. There is no retirement age there is an age where you hopefully are financially independent of needing to work and OUR decision making guides that.
I read this article and I know with some of my friends, they expect to have the same standard of living or even greater (expensive travel plans, etc.) and that is just not going to be the case. Our standard of living will in most cases be lower. I have a feeling people are going to take alot more money out of their 401k's than originally planned and those will disappear more quickly than planned.
I think that getting 70% of current income is pretty accurate..that means that keeping same standard of living, one would have to take that 30% difference a year out of their 401K's, IRAs, etc., which is alot. Even if one has planned, I'm talking about people with average salaries now, we will still need to cut back on expenses to make it.
People always ask me...why don't you retire? I just laugh...they are in denial!
I am a boomer but one of those we had to help her own parents (a lot) - now they are gone (miss them) and we are starting over in a sense. It could be worse; at least, we are self employed.
There is no magical retirement age and that is the mistake many people make. Even if you have a three legged stool for retirement there is no magic age that says everyone once they reach it is able to retire. Lets look at a progression of the three stools.
A. You have a pension and at a certain point of service and age you are fully vested. Does that mean you can retire then? No, it may not be enough money.
B. You reach 59 1/2 (yeah I know if you retire 55) and you are able to access your tax sheltered investments. Does that mean you can now retire? Depends on how much you have.
C. You reach Social Security eligibility does that mean you can retire? Maybe and maybe not. If 62 when combined with everything else is it within your financial means? Do you need to wait for Medicare to kick in so you have health insurance?
If people think there will be a magic age they can retire without crunching numbers and following a plan they will probably be in for a rude awakening. There is no retirement age there is an age where you hopefully are financially independent of needing to work and OUR decision making guides that.
Saw this thinking a lot recently when there was a retirement incentive offered at my job to help with downsizing/abolishing jobs. People would point at so-and-so who was past the retirement age and had the years in and yet was not taking the package. "Why doesn't SHE retire?" Each person's situation is different, and no one else can decide just by looking at someone else and making an assumption that they SHOULD retire.
I, of course, was insanely jealous of those who were able to take the incentive, but I've got to stay for a few more years at least.
I am 66 and get asked almost daily "When are you going to retire?", "How old are you?", etc. The truth is I can't give up the company health insurance. Most doctors won't accept new Medicare patients, and my wife is too young for Medicare. Private insurance would take half of my post employment income. I'm just thankful they haven't run me off yet, which could happen any day.
We're in the vanguard of the boomers and retired a couple of years ago. We're making it just fine at ages 64 and 62. One thing many/most don't take into consideration is just how expensive it is to work taking into consideration commuting, work clothing, cleaning, meals, work-related social obligations, etc.
We're not living high off the hog and we made a 2,000 retirement move, purchased a house and basically started over but we're comfortable and secure and after all, that's what counts the most!
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Helping my parents
