This is the worlds leading source of financial content on the web, ranging from market news to retirement strategies, investing education to insights from advisors.
Forex Forever!

Top Tips for Boomers Who Want to Shore Up Their Retirement

Author: Daniel Smith

Baby Boomers have taken a lot of flak from young people, particularly for the impact that their financial choices have had on the economic and financial outlook for subsequent generations.

Yet even though they may comprise the last generation to reap the full benefits of Social Security, Baby Boomers aren't as prepared for retirement as the younger generations assume. Many Boomers have underestimated what they need for retirement, haven't allocated their investments properly, and simply haven't cobbled together enough.

So are Boomers doomed for retirement? Read on to find out what they can do to remedy any bad retirement planning habits. (For related reading, see: How Boomers Will Change the Way Others Retire.)

Never Saved Enough

According to a 2015 survey from BlackRock, Boomers are severely behind in saving for retirement. The average Baby Boomer has a portfolio with only $136,200—hardly enough for a generation who most experts agree should look to have $45,500 annually during retirement. At their current rate, boomers will have less than $10,000 a year. Almost 75% of boomers said they struggle with saving for retirement on top of other financial obligations. Less than one-third say they are confident they'll have enough to retire with.

Many have attributed the Boomers' lack of retirement savings to being too conservative with investments. They currently hold too much of their savings in cash and cash equivalent investments instead of equities that provide higher returns.

Boomers have also failed to save regularly; only 25% of Americans put aside money for retirement. While many of the problems Boomers face are related to more nuanced issues like investment misallocation, most have simply not put away enough money on a consistent basis.

There's Hope

If you're a Boomer, don't panic. The fact that you're financially savvy enough to be reading about investing puts you ahead of the game. So follow these tips to make the most of the years leading up to your retirement.

  • Play catch-up: Those age 50 and older can contribute extra money to their IRA and 401(k) plan funds. In 2016, the catch-up limit is $1,000 for traditional and Roth IRAs and $6,000 for 401(k)s.

  • Get risky: One of the reasons Boomers have struggled is their unwillingness to invest in high-performing securities with more risk. They should put more of their funds in stocks and funds that will provide better returns than bonds and money market accounts.

  • Decrease expenses: One of the easiest ways to set aside more money for retirement is to cut expenses. Many Boomers are still living in the houses they bought when they had a large family; now would be a good time to downsize and use the savings to fund their nest egg.

  • Delay Social Security: Since many Boomers will depend on monthly Social Security payments, they should wait until age 70 to claim Social Security. Seniors who do this can expect an 8% annual increase in how much they receive, compared to those who take benefits at 66 years old.

  • Work part time: Instead of retiring and living on peanuts, Boomers who are able to should work part time to fund their retirement until they've saved enough to retire for good. They can use their years of expertise to consult or start a small business.

The Bottom Line

The retirement reality for most Boomers isn't pretty, but that's no reason to panic. There's still time to shore up your investment allocation, cut your expenses and bulk up that nest egg. For most, implementing a few simple changes and adjusting expectations should have a major impact for the better. (For related reading, see: Top 10 Investments for Baby Boomers.)

last five articles

#545 5 Keys To Lower Life Insurance Quotes

Author: Andrew Jackson

If you have dependents and need life insurance, chances are that you'll be paying premiums for years or even decades. Getting the best possible rate can make a huge impact on your pocketbook. Here are some ways to ensure you don't pay any more than you have to for the coverage you need.... see more

#363 An Analysis Of Social Security Benefits And Their Future

Author: Ethan Harris

As of the end of May 2014, nearly 64 million Americans received some type of Social Security benefit, or 1 in 6 Americans. In 2012, the government paid out $775 billion in benefits, making it a significant driver of the economy. If you're not sure that you have an accurate idea as to how Social S... see more

#1160 7 Ways To Protect Against Credit Card Hacks

Author: Daniel Harris

Pardon us for sounding all doom and gloom, but a series of incidents proves that your sensitive financial and personal data isn't necessary safe. Look at some recent stats. A Home Depot data breach affected some 56 million credit and debit cards. The well-known Target breach affe... see more

#312 No COLA Raise? Discounts to Help Seniors Budget

Author: Michael Smith

Social Security recipients just got the bad news that there will be no cost-of-living adjustment (COLA) raises in Social Security payments in 2016. The reason: Cost of living did not increase overall in 2015 – attributed especially to the drop in gas prices. However, seniors don't use that much... see more

#62 3 Reasons to Invest in Multi-family Real Estate

Author: Michael Harris

Real estate can be an alternative for those who are not able to withstand the volatility of the stock market. It is also a better investment for those investors who wish to take an active role in growing their capital, rather than passively putting their money into a fund to be managed by someone... see more