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 If you are like most Baby Boomers, you have limited
retirement savings to begin with and must learn to protect
them and make
them last. Even if you have comfortable retirement
savings, complacency in financial management could have
painful results. Without active financial management,
Baby Boomers could easily see what savings they have
evaporate.
Baby Boomer Assets
Baby Boomer assets are most likely to
consist of the equity in your home, personal property, a
401K (or pension), investments or real estate.
Investment Advisor shows the average Baby Boomer asset
allocation to be:
Pay Off Those Credit Cards!
 One of the best things Baby
Boomers can do for themselves is to pay off all credit card
debt before retirement. Credit cards have become like
financial enslavement. Credit card companies do
everything possible to entice impulse spending, then find
ways to bump your annual interest rate to 30 percent, and
then encourage you to only pay the minimum (at which rate,
you can only escape through death). Get rid of them -
they are as insidious as nicotine-laced cigarettes!
Protect your Baby Boomer Savings
Regardless of your Financial
situation, every Baby Boomer should develop a financial
strategy for retirement. Here are some general tips
for Baby Boomers to protect your savings:
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Diversify - Don't put all
your eggs in one basket. If one part of the market
or economy goes sour, you are protected by having your
savings in different industries and instruments.
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Generally speaking, think
mutual funds over individual stock ownership because
holdings are diversified. No-load funds with
management fees under 1 percent and a high Lipper rating are preferred.
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Be very careful about relinquishing
control over your investment funds in exchange for a
life-time annuity. Make sure the annuity is
indexed for inflation. Also, if you later need a
large sum of money, realize that annuities are usually
sold at a hefty discount.
-
Avoid or fire any financial advisor who tells you to
just hang in
there when stocks or funds are
experiencing a drastic change for the worst (e.g.,
maintaining investments in financial institutions
directly affected by the subprime debacle). Do not be complacent - An extended bear
market can dramatically impact your retirement unless
your savings are proactively managed. Either get
a
good financial planner
who understands your needs and whom you trust, or educate
yourself and stay on top of your investments!
-
Remember to consider the impact of
inflation when doing retirement planning.
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Fixing your nest egg allocation is more
important than chasing high returns.
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Beware of scammers who call with hot
tips or speculative offers!
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Most financial managers
believe that Baby Boomers moving into retirement should
employ a more conservative investment strategy to
minimize exposure to market "ups and downs." Our
opinion is to retain as much stock as you feel
comfortable (ideally in the form of diversified mutual
funds) holding to offset dips in the bonds and
fixed-income markets and grow your portfolio during good
years.
Make a Budget
 Identify all sources of income you can
expect in retirement and develop a realistic monthly budget.
If you expect to have income from investments or real
estate, factor that in as well. Prioritize your
monthly expenses, amortizing any annual or semi-annual
expenses.
Do you have enough income to cover
anticipated monthly expenses? If not, something has to
go or be reduced, or you need to increase your income.
This simple exercise may alert you to the need to
drastically alter your retirement strategy, perhaps
motivating you to take advantage of some of the "dollar
stretching" tactics contained elsewhere in this Website.
Develop a Savings Withdrawal Strategy for Income
Once your savings are allocated in a
manageable fashion, baby Boomers should prepare a withdrawal
strategy to supplement Social Security benefits and/or
pension income. This strategy should be based on
achieving the following objectives:
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Optimize the amount you receive each
month.
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Protect your principle.
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Minimize tax consequences.
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Stretch your savings over your expected
lifetime (or as long as you can).
Baby Boomers are strongly urged to seek the
expertise of a financial planner or professional to assist
in creating and managing a withdrawal plan to supplement
retirement income.
Identity Theft Protection for Baby Boomers
identity theft t can result in someone
taking out a loan in your, running up charges on your credit
cards or cleaning our your bank account and savings before
you even realize something is going on.
One of the best ways to prevent (or detect)
identity theft is by periodically reviewing your credit
report to look for any unusual activity. Baby Boomers
are entitled to one free credit report every year from each
of the three national credit bureaus:
Equifax,
Experian
and
TransUnion. Baby Boomers can order their free
annual credit reports toll-free at 1-877-322-8228, or online
from
AnnualCreditReport.com, which is a service set up by the
three nationwide credit bureaus to help consumers review and
manage their credit histories.
You might want to stagger the free access to
your three reports to stretch your annual coverage.
Personally, we wouldn't bother with any of the credit
protection or identity theft programs being marketed by the
credit agencies...but that's just our opinion.
Prepare a Will!
Nothing creates a headache for your heirs
like not having a will. Probate is a process you
should not wish on anyone. And having a will gives you
an opportunity to express your wishes for how your estate is
to be handled.
There are numerous software packages and
online sites that make it easy to prepare a legitimate will.
Simply enter "prepare will" in a search engine box and you
will get a multitude of returns.
Disclaimer
We are not financial experts, so any
information we present here is intended only to give you some ideas.
Every Baby Boomer must make his or her own decisions about
how to best manage their retirement assets and estate. If you do
not feel qualified, it is imperative that you hire an
experienced financial manager whom you trust or take
advantage of free resources to assist you in the allocation
and ongoing management of your retirement funds.
Recommended Books
Recommended Websites
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SmartMoney.com - Premier site for free financial
news and investment tracking. Active investors
should consider subscribing to SmartMoney Select ($58
annually) to access powerful financial tools.
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The Motley
Fool - Excellent free advice for active stock market
investors.
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ProtectYourNestEggInRetirement.com - Blog to help Baby
Boomers learn how to take control of their nest egg in
retirement. The number one rule in retirement is to avoid
large losses which can seriously damage your nest egg.
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Debt-Relief-Right-Now.com - Find debt relief or debt
consolidation for credit cards and a variety of loans.
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CafeBabyBoomers.com - Variety of useful articles about
Baby Boomer debt relief.
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The Online Financial and Investment Guide - News,
advice, blogs and reviews to help you achieve financial
success.
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GuardingYourWealth.com - Straight-forward,
Tell-It-Like-It-Is Free Financial Advice.
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FreeMoneyFinance.com - Free advice on growing your net
worth and managing finances during retirement.
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