Baby Boomers have started to retire, or at least reached the age of retirement. Do you realize that 20,000 people will reach the age of retirement per day for the next 20 years!  What will those kinds of numbers do to your chances of retiring with an adequate income? Baby Boomers retiring will have the highest net worth of any group of people reaching retirement age, and you must be prepared to compete within this group, therefore, many Boomers are looking to a prosperous and exciting time during their retirement, are you?  On the other hand 40% of retiring Baby Boomers have a NEGATIVE net worth! These people are expecting to keep working, or live on the Government handouts for the rest of their lives.

What can we expect from the Government?  Boomers have been in control for the past two or three decades.  We have been the members of parliament, the doctors, lawyers, accountants, researchers and everything else that we needed as a controlling group of people.  Over the next 20 years, we will become the minority in regards to the control group of our society.  As this happens, we can expect that fewer decisions will be made that support our age group.  Our retirement is not going to be a handout!

The percentage of Boomers that will keep working after their retirement age is expected to be in the 40-60% range.  Many of these are looking to work part time, or on an intermittent basis such as consulting.  Most are not looking to extending their current job, but will be changing their work to something that they can control the amount, time and intensity of the effort. Most will be looking to find work that they can do from the comfort of their home!

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The ideal of retirement has changed from a comfortable way to spend the last years of your life, to the best years of your life, an adventure that is to be lived and enjoyed while your health permits. The big note here is you must have an income to enjoy this “best time of your life”.  Your retirement will have to provide this income. By now you know the 4% rule “if your retirement resources are invested at a normal rate of income, you can withdraw 4% per year forever”. So if you have $1Million as retirement resources, withdrawing 4%, would net you $40,000 less 30% income tax, would let you have $28,000 disposable cash flow. Hardly enough to maintain your current standard of living…. So how to you supplement that income to give you the best years of your life, an adventure that is to be lived and enjoyed while your health permits.

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Here are highlights of a survey, from a news release by Merrill Lynch:

• The new retirement “turning point.” While 76% of baby boomers intend to keep working and earning in retirement, on average they expect to “retire” from their current job/career at around age 64, and then launch into an entirely new job or career.
• Taking advantage of their “longevity bonus,” baby boomers will create a whole new life stage. Since the time that Social Security established the “normal” retirement age at 65, life expectancy for a 65-year-old has increased by over seven years and continues to lengthen.

As a result of living longer, baby boomers plan to be “younger” longer and to work longer.

Most baby boomers who responded to the survey (65%) will stop working for pay and retire in the traditional sense at some point. However, that phase is more likely to begin in the late 60′s than at age 60 or 65.

• Baby boomers reject a life of either full-time leisure or full-time work. When asked about their ideal work arrangement in retirement, the most common choices among baby boomers in the survey would be to:

• Repeatedly “cycle” between periods of work and leisure (42%)
• Have part-time work (16%)
• Start their own business (13%)
• Work full time (6%)

Only 17% of the baby boomers in the survey reported that they hope to never work for pay again.

• It’s not about the money. While 37% of the baby boomers in the survey indicate that continued earnings is a very important part of the reason they intend to keep working, 67% assert that continued mental stimulation and challenge is what will motivate them to stay in the game.
• The transformation of the “me” generation into the “we” generation. The “me” generation has grown up — now with deep concerns for the well-being of their children, their parents and their communities.

Baby boomers are now 10 times more likely to “put others first” (43%) than “put themselves first” (4%).

• The unpredictable cost of illness and healthcare is by far baby boomers’ biggest fear. They are three times more worried about a major illness (48%), their ability to pay for healthcare (53%) or winding up in a nursing home (48%), than about dying (17%).
• Baby boomer women are better educated, more independent, are simultaneously juggling more work and family responsibilities and are more financially engaged than any generation in history. According to the survey, married baby boomer women are more than six times more likely to share responsibility for savings and investments compared to their mothers’ generation (33% now vs. 5% then).
• Baby boomer women are dreaming of retiring to Mars while baby boomer men hope to retire to Venus. Baby boomer men are looking forward to working less, relaxing more, and spending more time with their spouse. Baby boomer women view the dual liberations of empty nesting and retirement as providing new opportunities for career development, community involvement and continued personal growth.
• Financial preparedness is the gateway to retirement freedom and the antidote to retirement phobia. Accumulating the resources baby boomers believe they need for retirement freedom (81%), rather than age (56%) or any other variable, was cited as the most decisive factor for when they choose to retire.

And recognizing the growing uncertainty of government entitlements like Social Security, baby boomers who have a plan and feel prepared are twice as optimistic and far less fearful compared with those who do not.

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