When it comes to finances, not all boomers are in the same boat
There's a big difference between still being in your 50s and having said goodbye to 60 -- particularly when it comes to money.
Although often lumped together under the same category, subsets of the boomer cohort have led fairly different lives, have diverging priorities and subsequently varying levels of retirement preparedness, according to a recent report by the Insured Retirement Institute.
The biggest differences between early (mid-60s) and late (mid-50s) boomers has been the migration from the defined benefit pension plan (DB) to the defined contribution (DC) plan that has left many of those not yet retired on their own when it comes to investing.
The 'it's all yours, buddy' plans that many late boomers are relying on present them with a unique challenge when compared with the secure income plans their older siblings are living off of.
For this reason, late boomers may want to look into annuities in order to provide them with a guaranteed source of income throughout their years in retirement, the report states.
Life annuities and other guaranteed income products may be a good fit for younger retirees as the report found that close to one-fifth of late boomers and one-quarter of early boomers identify guaranteed monthly income as the most important thing they're looking for in retirement.
But that's tougher to find if you're working on your own. The report found early boomers were generally able to replace 70 per cent or more of their pre-retirement income in recent years while later boomers would be lucky to replace 60 per cent.
What's worse, more late boomers admit that they're already financially challenged even though many are still working. The biggest reason seems to be that 34 per cent of them are currently supporting an adult child compared to 21 per cent of early boomers.
Most boomers report helping out by providing free room and board, but also contributing to major purchases like cars or computers, helping pay for rent and groceries and of course, paying off credit card bills.
Do you see a major difference when comparing, say, your older brother's situation with your own? Do you feel you're falling behind?
By Gordon Powers, MSN Money
Posted by: susan | Jul 9, 2021 6:27:33 AM
Am not sure the difference is age is so much a factor but what occupation one chose and where the chips have fallen. Knowing what I know now, I should have become a teacher.
Posted by: san | Jul 9, 2021 11:28:05 AM
Many of us are all in the same boat...the 50-60 have saved over the years...where do you make any interest now...for those in senior homes are using their principal and making no interest anymore on what they have saved...
when the markets went down in 2008 people that have saved on their pensions lost alot only because of bad decisions with the banks...
How can one make 1 percent on their money and earn for the future...
As far as the markets they have become a roller coaster all the banks care about is what they make on their fees...
As far investing with the banks they look after themselves they might look at a portfolio 3 times a year they do not buy and sell like they did 10-15years ago..because they make their money on the fees
and their 3percent on someones portfolio..
Again occuption is a factor the middle income class will struggle ...only the rich will survive because
they really do not care what anything cost they just go out and spend because they have it..
Posted by: chris | Jul 9, 2021 11:31:55 AM
Times and finances changed about 20 years ago. My dad was able to build his house with no mortgage (he built what he needed, not what he wanted) and was subsequently able to sock away tons of cash into GICs that paid 10 to 17 percent during the 80s and early 90s. But things are different today. Sure you can pay off your extravagant house with less carrying costs but when you do have that house paid for GIC pay you 2% now. Considering that money doubles about every 36 years now at that rate (the rule of 72) it is harder to save what little we do have. I am a gen-x'er and I am fortunate to have paid off my house (again what I needed, not what I wanted) a few years ago, but GICs pay me next to nothing and the stock market is only for people who have real money to invest (ie. over 2 million). I am fortunate to have a federal government DB pension coming soon. There will be changes to this plan I guarantee it in the next 5 or 6 years. I am just fortunate enough to have only about 12 years left to retirement at age 55 and the government will red circle those who have less than 10 years to go at the DB plan. I feel for those people who have say 15 or 20 or 25 years to go at that time when they make the switch. Those are people who signed on to work for the government figuring they would get a DB plan but will get screwed over with a hybrid or full DC plan then. In order for the federal government to keep those employees with a DC plan conversion they will have to pay them more I think. There will be a two tier'ed salary in the federal government I fear, one which will create several problems. I am glad I won't have to be a part of it though.
Posted by: san | Jul 9, 2021 11:32:01 AM
here is your rich baby boomers...when you read with the flooding in Toronto
250,000 Ferrari