Are you a Baby Boomer nearing retirement? Do you feel like you’re financially prepared?
According to a recent study by the Bankers Life Center for a Secure Retirement, most Boomers have not done enough to adequately prepare for their retirement years. Consider these statistics about middle-income Baby Boomers:
- 69% admit they don’t have or don’t know if they have the financial resources to live comfortably in retirement to age 85.
- 91% don’t have a written retirement plan.
- 81% currently have debt.
- 23% have a mortgage with more than 20 years remaining on it.
- 51% of retired Boomers say Social Security is their primary source of retirement income, even though, according to the SSA, 88% of Social Security recipients (excluding disability recipients) receive less than $24,000 per year in benefits.
- 68% rate their current financial well-being as average or worse.
The good news is, it’s never too late to improve the outlook of your retirement financial security. Here are some recommendations to help Baby Boomers who are nearing retirement:
1. Research Social Security options
Do your research or work with a professional to develop a well-informed plan for when to tap into your Social Security benefits. Delaying your benefits until your full retirement age can result in a higher income check from Social Security.
2. Aggressively pay down debt
Strive to pay off as much as possible prior to retiring, including any mortgage. When you retire, debt payments ideally should be no more than 10% of your income. But being debt free is even better.
3. Minimize your monthly bills
Monthly fixed expenses reduce your flexibility to adapt to changing financial needs or react to unexpected expenses. Consider reducing discretionary expenses like your monthly cable or phone bills.
4. Seek employment income
If you’re able, consider remaining in or rejoining the workforce in some capacity. Whether full-time, part-time or seasonal, the income will relieve pressure on your retirement savings.
5. Develop a plan
Putting a plan in place will show you what steps to take now and what steps you may need to take in the future. A financial professional can be extremely valuable in helping you build a plan and helping you find savings products that can provide a reliable monthly income.
Read this and more in the latest Bankers Life Center for a Secure Retirement Study or talk to an agent about making plans for a secure retirement.
Source: Bankers Life Center for a Secure Retirement, Paying for the New Retirement: Responsibilities and Challenges for Middle-Income Boomers, July 2016.