Mellody: Well, it depends on what you are considering, Skip. The boomer generation is one of contradictions when it comes to retirement.
On one hand, The Employee Benefit Research Institute found that just 56.7% of early boomers are on track to meet their financial retirement needs, and in houses where they are not on track, the shortfalls are significant. EBRI found that the gap came to an average of $71,299 per individual in a family, $93,576 for single males, and a whopping $104,821 for single females. On top of this, another survey found that nearly 4 in 10 boomers have NOTHING saved for retirement.
On the other hand, boomers are burdened with significantly less debt – student loans, mortgages, and credit card charges – than other generations. They hold significantly more equity in houses, with homeownership being much higher among boomers than younger generations. Overall, like the other generations, retirement savings are not where they should be.
Skip: What advice would you give to Baby Boomers who are close to retirement right now to improve their financial state?
Mellody: If you are a boomer nearing retirement, I have three suggestions. First, consider working past pre-set and psychological retirement ages of 65 or 66. If you can delay the need to file for Social Security by using working income to live off of, you could claim Social Security benefits later and maximize them, which is very important if your retirement nest egg is not as large as you would like it to be.
Secondly, remember that it is never too late to start investing. If you can, consider opening a Roth IRA, as they offer a number of advantages, such as catch-up contributions of an extra $1,000 when you are 50, tax-free capital gains, no contribution caps or age related rules for withdrawals. And finally, if you are uncertain of your options and your path to retirement, consult a financial professional, as they can help you to understand your options and take advantage of opportunities.
Skip: We will see you next week! Happy Thanksgiving, Mellody!
Mellody: You too, Skip!
Money Mondays: Are Baby Boomers Financially Prepared For Retirement? was originally published on blackamericaweb.com