Health & Well-Being in Retirement
Feb 16, 2021

Retirement Success: Make it a Priority

The Insured Retirement Institute’s Boomer Expectations for Retirement 2019 reports that one out of three of baby boomers plan to retire at the age of 70 or older, overestimating the age at which they will actually retire. Involuntary retirement allows only about 7% of boomers to actually make it to age 70. More than four in 10 boomers erroneously believe that Medicare will cover long-term care costs. Six in 10 boomers have taken no action with their workplace-defined contribution plans. One-third of boomers are not sure if their savings is enough to retire on. Furthermore, only one out of four baby boomers who don’t have a financial advisor have ever attempted to calculate a retirement savings goal.

Boomers’ lack of confidence is a mismatch in parity between expected expenses and potential income. Boomers have been unaware of the need to take actions that can ensure efficient and sustainable income is created from their savings, or unaware of the need to take such action to improve their retirement readiness.

But what if saving for retirement isn’t a top priority for you? Would you save more, and put forth effort to put a plan in place, for the long term? Maybe a happy, healthy retirement is not one of your goals. Northwestern Mutual’s 2019 Planning & Progress Study found that 56% of Americans don’t know how much money they’ll need to retire comfortably. It further found that Americans continue to define “success” based on relationships, health and lifestyle, over material goods, career, and wealth.

Baby boomers are likely to need a financial advisor (FA) for the following specific reasons:

  • create a retirement income plan
  • tax planning
  • plan for health and long-term care costs
  • set realistic retirement savings goals
  • select investments
  • determine when to claim Social Security benefits

The Transamerica Center for Retirement Studies (TCRS) 19th Annual Retirement Survey provided the following recommendations for workers:

  • create a budget
  • save for retirement
  • participate in employer-sponsored retirement plans
  • calculate retirement savings needs and develop a retirement strategy
  • get educated about retirement investing
  • be proactive to help ensure continued employment even in retirement
  • be sure to have a backup plan
  • take good care of yourself and safeguard your health

According to additional data from the Insured Retirement Institute’s Boomer Expectations for Retirement 2019, FAs provide baby boomers with the guidance, strategies and tools they need to navigate retirement, but the relationship also results in boomers feeling more confident in their ability to be successful in retirement than their counterparts who do not work with advisors. FAs can help boomers calculate an achievable, realistic savings goal by helping them figure out what their costs will be in retirement, and create realistic expectations about what their retirement savings is capable of generating in retirement income.

The Insured Retirement Institute’s Boomer Expectations for Retirement 2019 concludes that baby boomers, particularly those who are younger and still working, are unprepared for retirement, and face an urgent need to save more and create retirement income financial plans.

Based on these findings, we recommend that you place a higher priority on retirement readiness, take action to make your retirement a success, and contact your company-specific Baird Retirement Management Advisor to get a Retirement Income Baseline Plan completed. This way, you can discover if your funding status is underfunded, constrained, or overfunded. This is where the work and fine-tuning begins. And be sure to follow this up by making sure that you are getting at least annual retirement “tune-ups.”

This article was written by Stephen “Moe” Allain, RMA®, CPWA®, AAMS®, MBA, Vice President, Baird Retirement Management (BRM), in the Memorial City, Texas offices of Robert W. Baird & Co., Inc., member SIPC. He has 19 years of experience focusing on Retirement Income Planning with retirees and pre-retirees in the oil & gas industry. He is part of the Evans Allain Crumley Group, and can be contacted at (713) 973-3825, via email at [email protected] or via the BRM website at https://www.bairdretirementmanagement.com/evans-allain-crumley-group/.
While Baird does not offer tax or legal advice, our Financial Advisors routinely work with clients’ attorneys and tax professionals to ensure that all phases of the wealth management process are properly addressed.

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