The Baby Boomer generation is that post-World War II baby boom that came, and are now aged 58 to 76. This means they’re spanning pre-retirement and retirement, and that tends to be their financial focus. This generation has amassed wealth in real estate, investments, and often has pensions to secure their base retirement income. They were the last generation where the “norm” was staying with an employer for decades, working their way up the income ladder, and having different priorities when it came to their job and the importance of providing for their families.
This generation is also the first to experience high divorce rates and blended families. Meaning, this is a generation where so many people are in very different circumstances. They could have depleted retirement savings through a divorce settlement and had to start over. There could be blended families to support. They may have had children financially dependent on them longer than expected. Everyone has their own journey that they’re on.
Here are my top 3 things that this generation should be considering:
1) Ensure your retirement income needs are met
As we live longer and healthier lives, one fear is that we’ll outlive our money. There are many ways that this can be avoided through effective planning and investment solutions that will help protect much of your retirement capital from erosion, and keep pace with uncertain inflation and lifestyle costs. For those pre-retirement and worried that you haven’t saved as much as you need to secure your financial future, you CAN fast-track through some strategies. Most importantly, just having a clear outline as to how and when your retirement income sources can be accessed is key. You may be better positioned than you think you are.
Don’t be against making some short-term sacrifices for long-term gains. For some, it may be a matter of prioritizing what your lifestyle will look like, and for others, it may include continuing to work/earn an income a few extra years so that they can enjoy the retirement lifestyle of their dreams.
2) Be mindful of taxes
For those in retirement, if you’re not already set up with both taxable and non-taxable income sources don’t worry. There are ways to still make that happen. For example, consider taking more taxable income incrementally each year from RRIFs or LIFs, and making regular deposits to your TFSA to build up a tax-free, tax-sheltered money source in case you need it. This will prevent having to take a large sum of taxable cash when you may need it, and be hit with the tax bill in that single year.
3) Make inheritance decisions
If you have the opportunity to gift part of your wealth to the next generation while you’re still living, and while they may have an opportunity to use it to reach their financial goals, why wouldn’t you want to make that happen? Not only are there potential tax benefits, but you can also celebrate the wins. Likewise, a gift to a charity of choice would bring immediate and significant tax benefits and help your community or cause that’s near and dear to you.
Not everyone’s in the same boat
While there is plenty about living your ideal retirement, this isn’t possible for everyone. In fact, many in the Boomer generation aren’t at all financially secure for their retirement and are forced to work well past reasonable retirement age struggling to make ends meet even with government benefits. This is where cash flow management and a little thinking outside the box may be warranted to secure as financially stable a future as possible.
Unsure how secure your retirement future is? While retirement planning is an exercise in trying to predict the future, together we can chart a course so that there’s direction, and adjust as needed. You don’t have to take it on alone, but rather should spend the time enjoying your life.