Financial Planning for Our Baby Boomers
July 25, 2023 Wealth management
Many of our baby boomers (71.6 million) are seeing retirement on the horizon, if they are not there already. With this exciting new chapter, retirement brings a range of emotions – excitement, relief, sadness, joy – But it can also be very overwhelming. It’s important not to lose sight of the control you can still have on your finances as you age. Whether you’re well past your retirement age or just now getting there, you can still influence many aspects of your household finances by deciding if you want to work a part-time job or how much you will spend.
To help extend the longevity of your retirement assets, you may want to consider working post-retirement to help supplement the cost of retirement. This may mean either a full or part-time job, and every extra penny can go a long way as we live through the high inflationary times of today. Don’t consider this option too narrowly minded, as it can also help fulfill the lack of socialization and structure that some of us need daily. Being around other people and accomplishing daily tasks associated with working can have a huge effect on long-term health.
Another good reason for considering employment in retirement is to help subsidize the cost of health care. While we think inflation on our daily goods has been astronomical, the cost of health care has been rising well beyond those costs over the last 20 years. The Consumer Price Index (CPI) over the last 20 years has grown at an average of 2.4% while the CPI for medical care has grown at an average of 3.4% a year. As you can see, having a job in retirement can not only bring self-fulfillment, but it can also possibly provide much-needed medical insurance or extra income to pay for medical care.
Be wise about how you plan to claim your Social Security benefits. Taking your benefit too early can have a lifelong impact on the total amount you receive. Full Retirement Age (FRA) varies for each of us based on our birth year, but those born after 1960 have an FRA of 67. If you were born between 1955 - 1960 you have an FRA age of 66 plus several months. All those born before 1955 are currently at FRA. It’s important to consult with a good Wealth Advisor so you understand your options when claiming Social Security and the impacts of your finances long-term.
Now that you’ve thought through a couple of important things, you can focus on your goals, set a budget and enjoy the many years you have ahead of you with little worries.
We provide the information in this newsletter for general guidance only. It does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, investment, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, expressed or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.