In Part 2, we will discuss why and how this happened to the baby-boom generation. If you missed Part 1, I recommend you take a second to read it first.
Why and how did this happen? The Baby Boom generation:
- Were the first generation to transition from pension plans (defined benefit) to IRA accounts (defined contribution), like 401(k)
- Experienced two market meltdowns in the past decade
- Did not make retirement planning and saving a priority.
- Did not set retirement goals and objectives
- Were uninformed and did not understand what they were investing in.
- Paid excessively high investment fees building wealth for their advisor and the financial services industry.
What are the consequences for Baby-Boomers? They may have to:
- Work beyond their original planned date to retire…if the job still exists
- Work for the remainder of their life…at a low-wage job with few, if any, affordable benefits
- Reduce their standard of living to ensure they don’t outlive their limited savings
- Move in with their kids
- Take greater risk with their investments…the worst possible option, but the easiest to consider!!!
- Experience a combination of the above
“It is a characteristic of wisdom not to do desperate things.” – Henry David Thoreau
In Part 3 tomorrow, we’ll discuss what the Gen-Y and X generations must do to ensure a different and better retirement outcome.
Let me know your thoughts below. If you want to learn more, watch this short video.
If you find this of value, please share with your friends, colleagues and family members, and encourage them to do the same. Time is still on their side but they must be aware of their investment choices…and the potential long-term consequences.