There has been recent talk in the press of many baby boomers retiring without adequate savings or planning. According to the Congressional Budget Office in Washington DC, between 1946 and 1964 seventy-eight million babies were born in the US. The oldest of those will turn 65 years old in 2011. As retirement nears for the largest age group of citizens in America, it is necessary that steps are taken to be as prepared as possible. Some of the recommended steps and planning are listed here.
Save for unexpected events. Many Americans do not plan for the continued care giving of their elderly parent when they are planning their retirement. Many of those in the boomer age are in what they call a sandwich generation. They are providing financially longer for their adult children well into their late 20’s while at the same time assuming the caring giving role to their elderly parents. Family emergencies that warrant a substantial amount of liquid cash can come up at a moments notice. There are many of life’s unexpected turns that arise and preparing for the majority of them can help ease the burden when you have retired.
Prepare for the rising cost of health care. The highest expense in retirement is health care. Be sure you have adequate savings in place for this. Many Americans are putting off retirement and working for a few extra years to gain the additional funds needed to have adequate funds for health care. According to NCPA, the average American over the age of 65 will need $245,000 to pay out of pocket costs of health care for the remainder of their life.
Tighten Your Budget. Pare down on cell phone plans and other expenses such as cable or unnecessary home phone additions. If you must have a home phone, go with the bare minimum. Join AARP and other senior organizations. They offer seniors deep discounts for every day living items and can help maintain a frugal budget for boomers.
Downsizing is best when done prior to retirement. This should be one of the first moves made in planning for retirement. Downsizing can either give you additional funds to add to your retirement or can reduce your cost for housing. Both can be attained if good decisions are made. Be sure that sufficient estate planning is completed prior to retirement. This helps the process and will update any Wills and Trusts which dictate the beneficiaries of your estate.