Will Baby Boomers Be Ready to Retire?

Baby Boomers have had an impact on American society since they came of age in the 1960s. At nearly 80 million strong, they represent “the largest sustained growth of the population in the history of the United States,” according to the American Association of Retired Persons. And with retirement looming for a vast majority of Baby Boomers, they will continue to have an impact on the U.S. economy-providing they’re financially secure.

            Embrace the possibilities- and the realities- of retirement. Retirement should be a time of rejuvenation, not regret- as in regret that you might not have saved enough or taken into consideration all of the potential costs associated with your new lifestyle. Consequently, as you contemplate life past work, you may want to take into account the following:

• Throughout retirement your health care needs will continue to be a part of your life- and their costs are continually rising, especially long-term care.
• Many people have inflated ideas of how much Social Security is going to provide for them monthly when they retire. It’s likely to be less than you might think.
• Your retirement should be care free… and debt free. Paying down-if not paying off- current debt can ease a great deal of financial strain down the road.
• Of course, there’s always a chance that you might have to put off retirement by a year or even a few. If you’re unable to work into those extended years, do you have a “contingency plan”?

Develop a retirement strategy. One of the smartest investments you can make is spending some time developing a straightforward retirement plan. Indeed, a little strategy now can pay big dividends later. With some guidance from an investment professional, you can be well on your way toward mapping a post-career plan that works best for you. Some important items to consider as you get started:

• Your retirement expenditures will largely be determined by the lifestyle you choose to lead, so take the time to calculate those costs (including inflation).
• Because life expectancy rates in the U.S. generally have increased over the years, there’s great value in calculating projected lifespan into your retirement roadmap.
• Just as your day-to-day living will shift after your working years, so should your portfolio. Through the process of asset allocation you may want to rebalance your investments to better reflect your retirement needs.
• If you have changed jobs or plan to retire soon, make your transition easier by creating an IRA rollover account, rolling your funds over from a qualified retirement plan, such as a 401(k). The entire amount, including all earnings, will keep your money working hard for you- tax deferred- until you need it. Taxes are referred until withdrawal. Early withdrawal before age 59½ is subject to income tax and a 10 percent penalty.

It’s never too soon to contemplate your retirement. While navigating your retirement strategy should not be an overwhelming endeavor, it should be addressed sooner rather than later. Contact an investment professional to help you find the answers to all of your questions about how best to prepare for the most comfortable retirement possible.

James Slaughter

Financial Advisor

Waddell & Reed, Inc.

1601 Response Rd. #385

Sacramento, CA  95815

916-566-0975 x 105 Office

530-220-0843 Cell

The preceding article was provided by James Slaughter and is meant to be general in nature and should not be construed as investment or financial advice related to your personal situation.  Please consult your financial advisor prior to making financial decisions.  Waddell & Reed, Inc., Member SIPC.