Baby boomers now is your time to shine. Beginning this year, we’ll see the largest population in modern history hit retirement age. In fact, you may be someone who retired today.
If so, you wouldn’t be alone. Estimates indicate that 10,000 people are retiring every day, as the wave of people turning age 65 sweeps on. This “retirement tsunami” will continue for the next decade!
It’s hard to fathom – 10,000 people a day. That translates into 3,650,000 people per year who are heading into their post-career life.
How’d we get here? Good question.
It all comes down to the height of the baby boom (hence the nickname) that happened after WWII here in the US. The crucial years were between 1955 and 1960, but the trend continued a handful of years later.
In 1964, for instance, there were nearly 72.5 million baby boomers here at home. In 1999 the population peaked, with 78.8 million boomers living in the US, including people who immigrated.
With the traditional retirement age of 65, 2020 through 2025 is precisely 65 years since the years of the boom. And the mass of individuals born during this time is the fasting growing age group of all time.
The retirement tsunami will be around for a while; over the next nine to ten years, nearly 40 million Americans will retire. So, if you’re not one of the 10,000 retiring today, chances are you are one of the 36 to 40 million that are going to retire over the next decade.
Think about how massive this number is – 40 million people. And think about the questions these folks are all mulling over – no doubt the same questions, like what they need to do in the next few years to get prepared for this new phase of life. When you’re close to your retirement target date, you may start to sweat a little bit (or a lot!).
Here are three topics that boomers (and anyone else looking to retire soon) should be thinking about to alleviate their stress. If you don’t have your answers in place yet, set a goal to get your ducks in a row before you call it a career. The peace of mind this planning brings makes saying a final goodbye to your job all the easier.
1. Things you should prepare with the help of a financial advisor or on your own:
- Have you simplified your retirement strategy down to bite-size pieces that could fit on one page of paper?
- How does your fill-the-gap formula look?
- Have you figured out how much income you need to cover the difference between your retirement budget and what you’ll bring in from Social Security benefits, pension income, rental property income, etc.?
2. Things you should consider about your investments:
- How will the 4% rule work for you?
- How will you ensure that when you’re 75 and 85 that all the mechanics are being handled correctly?
- Do you have a plan in place for drawing income from your nest egg for the entirety of your retirement?
3. Things you should think about beyond typical retirement and investment planning:
- Do you know the estimated tax implications of your investments?
- Do you have an estate plan in place, like a will, financial power of attorney and advance directive for healthcare?
- Do you have a plan for how you’ll cover the expenses of healthcare as you age?
These issues take time to sort out, I know. But don’t leave your retirement questions unanswered. Get a handle on the topics above, whether you’re looking to retire this year or in ten years.
It’s worth the effort to get prepared for your new lifestyle. As Benjamin Franklin said, “An ounce of prevention is worth a pound of cure.”