I can’t figure out how to turn that “R” around in the title of this post or I would. Then again, it’s probably for the best that I don’t, if for no other reason than to avoid unwanted conflicts of interests with the other more well known users of that reversed letter.
I’m a Baby Boomer. I’ve known that for over 6 decades, but I’ve never really thought about what the definition of a baby boomer is until today. So I looked it up. The Merriam-Webster dictionary defines baby boomers as those who were born between the years of 1946 and 1964. I was surprised to learn that the “boom” didn’t last longer than 1964, but there you have it. I found it on the internet, so it must be true.
Wikipedia adds an additional distinction, stating that those who were born between 1946 and 1955 are classified as Leading Edge Baby Boomers. I had no idea, but it’s nice to learn that I’m finally on the leading edge of something!
I guess that also means that I’m on the front end of that much anticipated bubble of baby boomers who are already retired or who are in the process of planning to retire within the next few years.
I retired a little over six months ago and have found retirement to be a state of being for which I may be uniquely qualified and certainly one which I am finding to be very enjoyable and rewarding.
The process of transitioning from full time employment to full time retirement is a subject which is deserving of its own blog post, so I’ll save that topic for another day.
What’s really on my mind as I write this installment is the subject of what it takes in terms of available assets to be financially able to retire.
In the process of meeting with my financial advisor prior to reaching the decision to retire, I was very surprised to learn from him that studies indicate that roughly 60% of all baby boomers are currently not financially able to afford retirement.
This immediately reminded me of several commercials I’ve seen on TV recently in which people (actors) are asked to project how much money they believe they’ll need to retire comfortably for the remainder of their lives. They are then shocked when they see the projections which indicate that those funds will be totally depleted after just a few short years.
I remember a good friend telling me that if she and her husband could only get their savings up to $200,000.00, they would be in good shape for retirement.
Determining what it will take to be financially able to retire involves a very thorough understanding of one’s current assets, current liabilities, current income, as well as projecting what one’s liabilities and income will be during retirement, projecting the costs involved with the activities one wants to do while they are retired, and just how long one expects that they will be retired (the somewhat touchy subject of one’s life expectancy).
It’s extremely unlikely that there are many healthy baby boomers out there who will be able to afford to retire for any length of time with as little as $200,000.00 socked away in their cookie jar.
Interestingly, the Merriam-Webster dictionary adds this caveat to their section defining baby boomers:
“Industry experts predict that reverse mortgages will play an increasingly important role in the coming years as some 70 million baby boomers hit their 60s—often with a lot less saved than they’d hoped.“
I’m confident that this will be true, but I can’t see how reverse mortgages will even come close to bridging the gap between the assets required to fund retirement and the assets that are actually available.
In this regard, the next 20 or so years are going to be very interesting; politically, economically, and culturally.