Generational trends are one of the biggest draws for social research. Understanding why and how we act with respect to different age populations definitely has an impact on how our overall culture forms and can help us anticipate what comes next. However, it is much more personal than that. These trends aren’t just numbers. Whether they are indicating strengths or weaknesses, these trends represent real Americans. Among these generational trends, we have come to notice one of the biggest areas for improvement: the transition of Baby Boomers into retirement.
This is an area of interest primarily because many Boomers were either unable to save up enough over the years or were unable to recuperate their savings after 2008. Fortunately, there are opportunities for financial support and wellness even as this generation moves through their retirement into senior living. Whether you are a family member or caretaker of a Baby Boomer or one yourself, it is important to understand the necessity of financial wellness for a comfortable senior lifestyle.
Saving for Senior Living
Financial planning is something overlooked by many but a necessity for all. Of course, it is always nice to have some money set aside in a ‘rainy day’ fund but as we all near retirement, savings turn into the money constituting your lifestyle. That can be overwhelming but if you save consistently in the decade (or two or three) leading up to your last day at work then it really isn’t as scary as it seems. Smart investments can also be another avenue for generating some extra padding in your savings portfolio.
But why save?
Saving With A Purpose
Unfortunately, 45% of Boomers have no savings for retirement according to the Insured Retirement Institute. On top of that, the majority of those with savings do not have nearly enough to sustain their lifestyles beyond a handful of years. Consider: The average annual spending for retirees is between $40,000-$50,000. So even for those of us who are frugal with our money, five figures in total savings just won’t cut it. Not only are your savings what maintains your lifestyle but they are also the support system to fund any maintenance costs, personal interests/activities, unexpected medical expenses, etc. Other costs like senior living, residence care, and long term care have been made much more affordable but these are choices that will impact your savings.
This is why conscious, realistic saving is important. Planning for the lifestyle you anticipate is one that will keep you better prepared when retirement does come around. For those of us that want to remain active with trips or toys, we may need to put more away. For those of us that want to keep it simple or stay close to family, we can afford to keep those retirement fund payments smaller. And then there’s a big segment of retirees that want to relinquish our household duties and labor with independent living communities or senior living communities. All of these are things we can work towards.
Trend of Reliance on Support Systems
Of course, if things look a little thin closer to our retirement dates, there is Social Security. This is used by the vast majority of retired individuals. And this is certainly a nice addition to those individuals’ savings but it is not nearly enough on its own; consider the average income from the Social Security Administration is only about $14,000 per year. This is another reason why personal savings are important. Even though we can’t predict everything that will come up during retirement, it is definitely a relief to have a comfortable account accessible in case we should encounter any large expenditures.