Baby Boomers Beware – Retirement Approaches: Are You Financially Prepared?

Published on May 29, 2018

According to a study by the Insured Retirement Institute in April (Boomer Expectations for Retirement 2018), 42 percent of baby boomers have nothing saved for retirement.

Even the very youngest of this cohort, who are about a decade from retirement age, do not have enough savings for retirement. And, among baby boomers who do have retirement savings, 38 percent have less than $100,000 saved for retirement. As we have highlighted in other articles, this is not nearly enough to cover living expenses throughout a long retirement horizon… especially when you factor in health care costs.

The study also revealed that among baby boomers:

• Only 38 percent have calculated the amount they will need to retire
  • Forty-six percent of boomers expect they will need $45,000 (in current dollars) or more in annual retirement income.
  • Assuming the current average Social Security benefit of $16,848 annually, an individual would need to generate at least $28,152 in additional annual income from a combination of pension benefits and retirement savings to meet that figure.
• Only 25 percent believe that they will have enough money in retirement
• And only 28 percent believe they are doing (or did) a good job financially preparing for retirement

Given these statistics, it’s no surprise that 29 percent of those surveyed expect to work past age 70. With the “gig economy” on the rise and a lack of employer-sponsored retirement plans, the problem is likely to grow unless workers open a retirement plan and contribute on a regular and disciplined basis.

Create a retirement savings boom through self-direction

For baby boomers who are comfortable making their own investment decisions, especially those on the younger end of the boomer generation, they could close that savings gap with a self-directed retirement plan. By building a more diversified retirement portfolio through nontraditional investments, and by taking advantage of the catch-up contributions for investors ages 55 and older, financially savvy baby boomers can take control of their future now.

If you are a younger member of the baby boomer generation and are already investing in alternative assets outside of your existing retirement plan, opening a self-directed IRA could be a great way to grow your retirement nest egg. Next Generation Trust Company has all the information and forms you need to get started, and our helpful professionals can answer your questions about self-directed IRAs and the types of investments these plans allow. Plus, they’re always here to guide you along the way. Contact Next Generation at Info@NexGenerationTrust.com or 1-888-857-8058 to find out more about putting some boom into your retirement plan today!