We're not exactly a nation of savers, especially boomers. Our day of reckoning draws near, and it's about to reach up and bite us in the...
We’re not exactly a nation of savers, especially boomers. Our day of reckoning draws near, and it’s about to reach up and bite us in the butt. Excuse my language, but I hope I have your attention.
The doomsday that’s long been predicted — the retirement of nearly 78 million boomers, or 30 percent of the American population, is fast approaching. A flurry of recent studies lay out the problem.
One report, released by the Society of Actuaries and funded by the Women’s Institute for a Secure Retirement and the Heinz Family Philanthropies, found that older people of both sexes, but especially women, worry about:
• Not having saved enough to maintain a reasonable standard of living in retirement, then watching inflation further reduce the value of what they have saved.
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• Not being able to afford adequate health care or long-term care.
• Depleting their savings and investments and being left only with Social Security.
Given that women tend to outlive men by five or more years, the study says, they have different experiences in retirement. Widowhood, for one. Some women will live 15 years or more as a widow, it says, often with a decline in living standards. With shorter employment and lower wage histories than men, women are also likely to have significantly lower pension and Social Security benefits (though women are more likely to have meaningful survivor benefits). They are also more likely than men to need paid long-term care services, having cared for their husbands until they died. Although women worry about paying for their care, 85 percent have not bought long-term care insurance.
These concerns should serve as a late wake-up call if we listen. Male or female, boomer and older, many have not prepared financially to live the many years that our era of longevity now projects. According to the actuaries’ study, 30 percent of all women and almost 20 percent of men age 65 will reach 90. Those whose retirement funds aren’t likely to stretch far are in trouble. For a free copy of the report, visit http://research.soa.org/WomensShortReportfinal.pdf.
There are a lot of people in this boat.
We did it to ourselves, despite loud voices telling us for years to wake up. Problem is, they weren’t loud enough to drown out the sirens of spending. Famous for their defining bumper sticker, “He who dies with the most toys wins,” many boomers have spent themselves into decades of debt.
It continues. Just last week I read an article heralding their latest toys: high-end cars. Half of boomer households already own three or more vehicles, says a study by AutoPacific, a marketing consulting firm, and now, with the kids gone, they’re adding more: Lexuses, BMWs, Porsches and Ford GTs, complete with racing stripes.
Several solutions are needed:
• Many boomers will work well past the age of 65. In fact, with today’s 60 being yesterday’s 45, it makes sense as long as good health and good jobs abound. According to a recent study by Challenger, Gray & Christmas, an outplacement consulting firm, U.S. workers over age 55 now number 24.6 million, a record high. A quarter of those are 65 or older.
• It’s not too late for boomers to change their behavior. A new, short, easy-to-read brochure from the federal government called, “Pick Up the Pace,” tells how. Assume you will have a long, active and healthy life, it says, and take action now to ensure that your choices can stay flexible — buy insurance that will protect you late in life, carefully evaluate your options under Social Security, create an estate plan, and others. Since traditional pensions are rapidly disappearing, develop a budget that allows you to save and stick to it. Spend consciously. Then, keep healthy so you can avoid chronic illness.
Free copies of “Pick Up the Pace” are available online at www.eldercare.gov (scroll to the bottom and the link is on the right) or by calling the Eldercare Locator at 800-677-1116.
• If you’ve forgotten how to put a retirement-savvy plan into place or if you never learned how, take classes. For women, an excellent, all-day Saturday program is offered by the nonprofit, Money Wi$e Women Educational Services of Silverdale, Kitsap County. Sponsored by CFA Northwest Mortgage Professionals, State Farm, Washington Mutual and others, these free workshops are a great way to get inspired and motivated to do the hard work: budget, plan your estate, arrange your paperwork all in the company of women who are learning, too.
The next classes are Oct. 14 in Redmond at the Microsoft Conference Center and Nov. 4 in Auburn at the Green River Community College. To register, call Marcia Brixy, founder, at 360-308-0056. For more information, go to www.moneywisewomen.net.
Liz Taylor’s column runs Mondays in the Northwest Life section. A specialist in aging and long-term care, she consults with families and their elders. E-mail her at firstname.lastname@example.org or write to P.O. Box 11601, Bainbridge Island, WA 98110. You can see all of her columns at www.seattletimes.com/growingolder/.