What Every Baby Boomer Should Be Thinking About
If you were born during the Post-World War II baby boom between the years 1946 and 1964, then you are considered to be a baby boomer. Beyond just age, the term "baby boomer" is also used in a cultural context that goes beyond just date of birth.
Boomers created a movement of individuality and self-expression in the 1960s. In the 1980s they drove the culture of working to get ahead and success. And now, boomers are the largest demographic group. By 2015, those 50 and older will represent 45% of the US population, according to the AARP.
In 2014, the oldest Boomers will be 68 and the youngest will be 50. Whether retired or still in the workforce, what does it mean to be a baby boomer looking to the future? Baby boomers have been extensively studied and surveyed. And for good reason.
Boomers have immense financial impact. In total, those over 50 own about 65% of the net worth in the US, or approximately 30 trillion dollars. In addition, about $8.4 trillion will be inherited by boomers from their grandparents, parents, and others. Their annual income is $2.4 trillion, which accounts for 42% of all after-tax income.
Boomers are living longer. The current average life expectancy is 78 years but that is a broad average. If you are curious about your own estimated expectancy, you can get a quick estimate from the US Social Security website, or use something with a few more questions here, or get into the details here. My expectancy numbers were within about 5 years. What about yours.
Apparently, there is a 30% chance people will live past 92. Wow. That surprises me.
According to surveys, the big issues that baby boomers think about most are;
- health and quality of life
- money and anxiety over retirement
- their legacy and how to make a contribution
Baby Boomers Need to Think About Their Health
Boomers, in general, have had a pretty good life so far and are greatly concerned about their health and quality of life as they age. There is pretty good awareness of the impact on their health of diet, exercise, smoking and obesity. Baby boomers, overall, have been more informed about health than their parents.
But, in some ways, boomers are not as healthy as their parents. There are a range of health concerns, including;
- Type 2 diabetes increases the risk of serious health problems such as high blood pressure, vision loss, kidney disease, nerve damage, foot problems, amputation and cardiovascular disease. People with diabetes are two to four times more likely to have heart disease or a stroke. Take a risk assessment test here.
- Cardiovascular disease is the leading cause of death in people over 60.
- Cancer is the second leading cause of death in older people.
- Cognitive diseases such as alzheimers and dementia are the 6th leading cause of death, but are one of the most feared afflictions of growing older.
- Bone and joint health raises anxiety around injury and mobility.
Boomers need to think about not only how long they live, and will their nest egg last long enough, but what health and quality of life they will have during those years.
Here are a few changes that will have high positive impacts:
If you smoke, how are you going to quit? Or, at least cut back. It’s an easy recommendation that is not easy to do, but the benefits are well known.
It is still a somewhat controversial therapy for some, but this new study shows that e-cigarettes appear to be 60% more effective than other methods of quitting. That could be a huge positive impact for individuals and for healthcare.
Stop eating and drinking sugary foods
In recent years, there has been increasing evidence that sugar, not fat, is the real culprit when it comes to obesity. Obesity increases type 2 diabetes and cardiovascular (heart attack and stroke) risk. It’s been linked to cognitive decline and joint damage. The growth in obesity rates are quite alarming.
Get your body moving for heart health
Almost half of baby boomers report almost no physical activity. Consistency is the most important thing. Often, the most accessible options are the best since it is easier to stay on schedule. A brisk walk briskly for 20 minutes every day makes a substantial difference. It helps your heart and has been shown to reduce anxiety and combat brain diseases.
Lift weights for strong bones and muscles
Older people are signing up for the gym faster than any other group. It is a great health opportunity. Pushing and pulling against a challenging weight has tremendous benefits for bone density and muscle strength. Both of these have health and quality of life benefits since strong bones do not break as easily and overall strength helps keep you independent.
Baby Boomers Need to Think About Money
Just because the total pool of assets and money associated with baby boomers is huge (trillions!) that does not mean it is evenly distributed. Or, even easily accessible since much of it is tied up in real estate.
In a 2004 AARP survey "Boomers at Midlife," 23% of boomers said the worst aspect of their life was personal finances. Only 58% believed they could meet their financial goals for retirement. And this survey was done before the financial crisis of 2008 where house prices declined dramatically (impacting much of boomer wealth) and millions of workers lost their jobs.
According to an AARP survey, the top financial concerns for Americans over 50 are;
- Their ability to save enough for the future (59 percent)
- Managing their workplace retirement accounts (38 percent).
- Spending down their wealth efficiently and maintaining their current lifestyle throughout retirement (62 percent).
- Rising utility costs including heating, cooling, electricity, and water are also a major concern for those on a fixed income (53 percent).
- Almost half (46 percent) of those surveyed are still managing debt.
- 60 percent think it’s important to seek out the best deals and discounts to help maintain their life savings for as long as possible.
- 81 percent are making it a priority to protect themselves from consumer fraud, including identity theft (72 percent) and deceptive business practices (64 percent).
Assess your financial situation and build a plan
Very few people have the training and experience to assess their current financial situation, understand the future risks and opportunities, and structure a plan. There are professionals that can make an assessment of insurance options, asset portfolio, job loss risks, family health circumstances, education expenses, understanding future government contributions and design a plan.
Most baby boomers have not done an assessment, perhaps out of fear of learning the truth, and don’t have a plan for retirement as shown in this article. While being optimistic is a great trait, it is a good idea to to have some numbers and targets to know how much cash flow there will be available from assets, how much the government will contribute and what lifestyle can be afforded, what should be set aside for future heathcare etc.
If that sounds like you, then a plan is good idea, don’t you think? You might actually be better off that you believe. Or, it might show that changes are in order. Finding the right advisor, or advisors, is key but it is worth the effort.
Downsize and reduce expenses.
Many baby boomers are considering downsizing to simplify their lives to free up time, preserve their savings and stretch their money over a longer life. If downsizing makes sense, then it may make sense to do sooner rather than later to have the biggest impact. Change can be stressful, but if the alternative is running out of money too soon and having a dramatic change in lifestyle, then it is worth it.
Think about working longer
Many baby boomers feel they can’t retire, due to finances. But many say they don’t want to retire even if they are eligible. They feel healthy and enjoy the social aspect of work. Rather than doing what you did before retiring, maybe there is an opportunity to work at something new that interests you? Or start your own business.
One of the advantages of downsizing is that less income is required. This financial relief gives the freedom to do something you enjoy, even if it pays less, and still be able to meet current and future financial needs.
Baby Boomers and Their Contribution and Legacy
Baby boomers have seen, done and accomplished a tremendous amount. Think about the historical events and cultural changes that have transpired in each decade between the 1960s until now. Pretty amazing, really.
Surveys done after the most recent recession of 2008, show that those who were able to manage their way through the economic landmines are very sensitive to those who have not. And they are willing to help financially, especially if they happen to be family members. One of the attributes of living a life full of ups and downs, is knowing that everyone needs a hand sometime.
But the legacy that boomers most want to pass along to future generations revolves around values and life lessons. This has been reported as being more than twice as important as leaving money and financial assets.
If baby boomers continue working after retirement, they don’t want to just have a job; they want to do something that they care about, is a good use of their time and allows them to give back in some way. Their business experience and work ethic has resulted a mini-boom (no pun intended) in 50+ entrepreneurs. There are twice as many start-up founders over 50 than under 25.
There are tremendous lessons learned during a life full of triumphs and setbacks. Younger generations could learn a lot from knowing your story and your values. Don’t keep it a secret!
Chances are you are going to live a long time. Find something that ignites your passion, give it what you’ve got and enjoy the heck out of it.
Baby boomers have contributed to some of the most interesting periods in recent history. It will be fascinating to see where it goes from here.
Are you a baby boomer? We would love to know what you think about the most when you consider the future.