Baby Boomers Face Significant Retirement Challenges ...
... And Here's What We Should Do About It

 
It's time to face the facts: Traditional retirement will be out of reach for most baby boomers.  While many dream of retiring full time from the workplace and spending the rest of their lives playing golf, taking cruises and spending time with grandchildren, the money and benefits just aren't there for most Americans to support such a lifestyle.  To make matters worse, most people don't have the financial skills needed to manage their resources to last the rest of their lives.

For you, what's at stake is the quality of the rest of your life.  Will you be impoverished in old age, or will you have enough money to live a comfortable life?  Will you be unhealthy or healthy?  Will you be miserable or happy?  The planning you do now will have a direct impact on the answers to all these questions.

It's going to take a substantial effort for people to understand the issues surrounding retirement and take effective action steps to effectively meet the challenges of their older years.  But it will be well worth the effort.

What Are The Challenges?

Here's a summary:

• The retirement savings of most Americans aged 55 and older are far less than the amounts needed to generate a comfortable retirement, even when you factor in expected Social Security benefits.  And this was the situation before the recent financial meltdown; it's even worse now, since most people's retirement savings have taken a significant hit.
  

• These same Americans aren't saving enough money to make up the shortfall before they reach retirement age.

• Almost half of all Americans approaching retirement don't analyze how much they need to generate a lifetime retirement income.  Instead, they just "wing it" when it comes to drawing down their retirement savings, and evidence shows they're withdrawing their savings too quickly.  The probable result: They'll outlive their money and be without funds at a time when it's difficult to return to work.

• About half of all Americans draw Social Security as early as possible (age 62), resulting in the smallest amount of annual retirement income possible.

• Given current trends regarding the cost of medical care and the health of baby boomers, older Americans' retirement savings could easily be depleted by high bills for medical and long-term care expenses.

People who work for a full career with an employer that still sponsors a defined benefit pension plan and/or retiree medical plan have a good chance for a traditional retirement, but that doesn't describe many people today, given the decline of these types of plans.

(If you'd like to see numbers that go into detail on these challenges, click here to see the article Statistical Analysis: Why Traditional Retirement Is Out of Reach for Most Baby Boomers.)

• Working in retirement years to make ends meet or to obtain essential medical insurance
  

• Postponing retirement

• Reducing living expenses before retirement to enable higher saving for retirement

• Reducing living expenses during retirement

You might view any of the above solutions as unpleasant or undesirable, but they should be assessed against the new goals espoused here.  Will they jeopardize your longevity, health and prosperity?  It's highly possible that the answer could be 'no!'

Future issues of this newsletter will explore creative and realistic solutions to the challenges posed in this newsletter.  I'll help answer the most important questions that you face, listed in the article below.  I'll provide solutions that rely on analysis and facts, not myths, misconceptions and sales pitches.  These solutions will help all of us plan for a happy, healthy, secure rest-of-life.  It's not too late to begin planning, saving and taking care of our health!


 


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The Most Important Questions That You Face

In order to plan for a happy, healthy, financially secure retirement, you will need to ask--and find the answers to--the following questions:

• How much retirement savings do I need to generate a sufficient retirement income to last the rest of my life?  Answering this will help answer the question "When can I retire?"

• What are the best strategies for drawing down retirement assets to generate a lifetime retirement income that increases for inflation?

• If I participate in a defined benefit plan, what are the most effective payout options?  If I'm offered a lump sum in lieu of a monthly pension, what are the advantages and disadvantages?

• When should I draw Social Security benefits?

• How long might I live after retiring, given my lifestyle and family history?  This will help answer the above four questions.

• How can I protect against the threat of large bills for medical and nursing home expenses?

• What are strategies for balancing income and expenses in my retirement years?

• What is the role of part-time or full-time work in my retirement years?

• How can I work most effectively with financial advisors, brokers and salespeople?

• What are the most important considerations for selecting financial products and services?

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Our Promise to You

We fulfill a need for trusted, unbiased strategies that you can use to plan your rest-of-life (a.k.a. retirement).  We rely on the latest research and analyses, and we'll keep it simple!  And that's all we provide - we don't sell investments, insurance or health products.
 

Steve recently produced an engaging and informative DVD/workbook titled The Quest: For Long Life, Health and Prosperity (Rest-of-Life Communications, 2007).  In the DVD, he interviews 12 experts in the fields of finance, health and life planning, and 13 people from all walks of life.  It's an engaging and informative "seminar in a box."  The Quest DVD provides details on implementing all the ideas discussed in this newsletter series and identifies helpful resources.  For more information, including how to order, visit www.thequestdvd.com.  It is also available on Amazon.com.

In addition to the DVD, Steve also wrote a 400-page book that goes into more depth on the topic of retirement, including the ideas outlined in this newsletter series.  Live Long & Prosper! Invest in Your Happiness, Health and Wealth for Retirement and Beyond (John Wiley, 2005) is available on Amazon.com.