“Change is the law of life. And those who look only to the past or the present are certain to miss the future.” – John F. Kennedy
Many Baby Boomers have very high expectations for their retirements! These may be fueled by Freedom 55 type ads, or stories from retirees of the Good Life of travel, relaxation, fun, and a low stress lifestyle. Their high expectations may not become reality given a real lack of planning, financial or otherwise.
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Retirement expectations and priorities
Polls of Boomers reveal that, when they compare themselves to their parents, they have a rosy picture of their retirements. They expect to be more active than their parent’s generation or at least 62% do, while 54% expect to be better off financially, 44% expect to be retired longer and 41% expect to be healthier. The latter are not pie in the sky as longevity rates are on an upward trend. Canada’s rank in the G7 countries is third, tied with France, with B.C. the highest with 81.7 average life expectancy from birth, Ontario is at 81.5 and the lowest is the Yukon, Northwest Territories and Nunavut at 75.1. Being more active is a part of this as is good nutrition and health care.
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The top three priorities for Boomers contemplating retirement are to live comfortably say 37%, to maintain the good health to enjoy that lifestyle say 31% and to travel say 15%. However, many of us are not making decisions or choices to make those priorities a reality. We are not behaving in such a way as to make it happen.
Retirement planning is key
Remember the A Team? They were an odd ball collection of personalities and skills working together to make their dare devil and off the wall plans work. Only about half of Boomers are doing any planning and most of that planning is only financial in nature. When asked about their planning, 29% said they were saving money, 22% were putting some money into RRSPs, and 13% had some form of investment. No one mentioned planning for their lifestyle, healthy living, building social networks outside of work or any of the other aspects this major transition brings.
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A Scotiabank Retirement Study found that 39% of Baby Boomers think that retirement planning should start when people go into the workforce, but only 9% of them had actually done that. Most do not start planning of any kind until they are in the last years of their careers. The Globe and Mail (June 16, 2014) called the result of this study Baby Boomer Remorse.
When asked specifically about financial planning, 31% had done some and 15% had done none or little. That is also about half that have not really done the financial planning that is required to make their plans possible. Some anticipate dying in debt and 44% are concerned about outliving their savings. According to a Nielson poll, 24% for those from age 45 to 64 have not started their retirement savings. Better to get some reality therapy with an objective look at the financial picture now to take the steps to make that retirement vision come true.
Among those Boomers who are still working, 15% plan to just keep on working, and 40% are working past their retirement dates with 84% of those working part-time. Some keep working because they choose to while others need to supplement their incomes to maintain their lifestyles. If the planning does not match the expectations, it becomes a pie in the sky scenario. Maybe the lottery?
What is your plan? Does it fit with your expectations?