Simplified Retirement Planning for Baby Boomers

James Perry Diendl



Beaver and the Bradys

The so-called "baby boomer" generation has received more attention from the media in recent times than any other demographic group, with the possible exception of the more recent generation some have labeled as "generation x." But the "boomers" are by far the largest group, the most powerful, the wealthiest and the primary target of all sorts of commercial advertisements. In other words, they mean big bucks to big business.

So who are these baby boomers who have garnered all this media attention? Basically, they include those born between the years 1946 and 1964. The term "baby boomers" derives from the period following World War II when the fighting men and women came home from overseas and started or added to their families. This was in many ways a post-war boom period. When the war was finally over and the enemies of democracy had been soundly defeated, everything at home seemed to boom: the economy, the birth rate and family values, among many others. And so the earliest of the boomers began life in a time of economic, political and social optimism and well-being.

Certainly the boomers, as well as every succeeding generation, is greatly indebted to the parents of the boomers who fought and won that war to preserve our way of life. If things had turned out differently in that war, we would most likely not even have a need to discuss a topic such as planning for retirement. And, as we shall see, some boomers are getting the chance to repay that debt by caring, and in some cases, paying for their aging parents.

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The earliest of the baby boomers, those born in the forties, were the first to be introduced to that phenomenon known as television. And in the fifties they were entertained by such family-oriented, "G" rated programs as "Ozzie and Harriet," "Father Knows Best" and, of course, "Leave it to Beaver." In fact, Beaver Cleaver is probably a good example of the earliest of the baby boomers. He was reared in a working-class, two-parent family environment that promoted strong moral and ethical values.

The message that most of these early television shows seemed to send was that if you do things right, if you are good and work hard, everything will be fine and you will be properly rewarded. Unfortunately, as many of the early boomers are learning, it often takes more than having done those things to provide for a comfortable retirement. Just because you have worked hard all your life and been a good, responsible person does not guarantee that your retirement years will be happy and care-free.

"No," as Ward Cleaver might tell the Beaver, "a comfortable retirement doesn't just happen. You have to plan for it. And you have to start as early as possible."

Most experts agree that planning is the most important part of any successful retirement program. To get to where you want to go, it helps to have a map drawn up to guide you on your way to successfully arrive at your destination. In a recent government study, it was revealed that for every one hundred people starting their careers, the following situation exists at age sixty-five: 25 are dead, 53 have annual incomes under $15,000, 13 have annual incomes between $15,000 and $25,000 and only 9 have annual incomes over $25,000. There is an old adage that states that "people never plan to fail, they just fail to plan." So one of our goals here will be to draw up a kind of retirement map that hopefully you can use as a guide to get you from wherever you are at the present time on the road to retirement to that final destination: a happy, secure and comfortable retirement.

But what about the youngest of the baby boomers, those born in the early sixties? They lived their early lives in a much more chaotic and unsettling period, which included a war that divided the country, political and social unrest and turmoil and changes of all sorts.

And what television shows were these boomers exposed to during their formative years? To name a few: "All in the Family," "Sanford and Son" and "The Brady Bunch." The Brady children, at least some of them, might be representative members of this youngest group of boomers.

But notice how things had changed from the days of the Beaver. The Bradys were a family made up of two families. There were now step-brothers and step-sisters, a step-mother and a step-father. Oh, yes, and there was Alice. This would have been very confusing for Wally and the Beaver. Yet there is a common link that binds or connects these two extreme ends of the baby boomer generation. That link is a strong sense of family loyalty and togetherness.

A comprehensive survey on baby boomers conducted in 1997 by the Del Webb Corp., developer of Sun City communities, found that all baby boomers rank family as their first priority. However, for the oldest boomers, second place goes to health concerns, while for the majority of the youngest members, finances comes in a strong second. We will be discussing both of these important issues in detail in subsequent chapters.

Following a general overview of retirement planning basics, we will discuss the individual components of what some planners refer to as "the three-legged stool" and the importance of coordinating them in an effective retirement program. Then we will focus on plan implementation and possible roadblocks as well as required and desired components of an effective retirement plan. Finally, we will address the important topics of health care and residence choices.

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Just how important is retirement planning to the baby boomer generation? Well, it has been estimated that a boomer will turn fifty years old every seven and one-half seconds for about the next eight years. That means that boomer planning time is rapidly decreasing. And, as we shall shortly see, timing in retirement planning is crucial.

We previously mentioned that the baby boomers are a very large group. Just how large? By some estimates the boomers are composed of more than seventy-six million members. By almost any measure, that is a huge number of people facing an imminent retirement period. And given the state of modern medicine and technology, they will be living longer than any previous generation in history. In fact, according to the United States Chamber of Commerce, life expectancy is estimated to increase by ten to fifteen years by the year 2010. Ironically, that will be about when the first group of baby boomers will be turning sixty-five.

So is retirement planning and preparation important, necessary and even vital for baby boomers to do today? Although the Beaver might ask, "Aw, gee, do I have to?," this is one subject that should not be postponed.