Investing in Your Baby Boomer Retirement

The #1 investment you should make in your Baby Boomer Retirement is

Your Health!

Does this surprise you?

If you are in 65 today and you are healthy, (big caveat here that you are healthy), there is an excellent chance you will live past 100.

Your health will determine:

• What your healthcare costs will be in retirement! According to the Fidelity investments A 65-year-old couple retiring in 2012 is estimated to need $240,000 to cover medical expenses throughout retirement. (Source:Fidelity Investments). This above and beyond what medicare will pay.
• How long will you live? The NBCNEWS.com article Will Baby Boomers Live as Long as Expected states
  “Most retirement plans and federal budget projections assume baby boomers — those Americans born between 1946 and 1964 — will live significantly longer than their parents have. That is a logical assumption, given healthcare improvements, new drugs and the long 20th century experience of ever-rising life expectancies.But there is a counter argument: boomers, beset by factors like elevated rates of obesity, cancer and suicide, could reverse or at least slow the increase in human life spans.” In other words, if you do not take care of yourself you may die at a younger age than your parents!
• Being healthy helps your bottom line. In 2002, the mean household wealth of married couples reporting excellent health was approximately three times that of married couples reporting poor health (an average of $500,000 compared with $164,000).  Average household net worth was $31,000 when both partners were in poor health but more than $400,000 when in excellent health. (Source: Health and Retirement Study)

(First and third bullets come from Motley Fool blog 17 Frightening Facts About Retirement Savings in America

What does all of this mean?

If you are a baby boomer and you had better start focusing on your health.

• You will live longer
• You will be able to work longer (at something you enjoy) and delay dipping into retirement savings
• You most likely be happier due to less stress due to bad health for you or your spouse

Personal Story

I left my last corporate position at the age of 54 with very high blood pressure, completely stressed out, and feeling lousy.

In the previous year,  my friend Stanton Truxillo went down with a massive heart attack while bicycling with his friends. Stanton was saved by a good Samaritan who got out of their car and performed CPR almost immediately. He was dead for a good 10 minutes. Stanton is happy and healthy today (post bypass surgery). The only reason he is alive today is due to that good Samaritan who walked away. This was a big wake up call for me!

Stanton was the picture of health in his late 60′s. He could kick my a** on a bicycle and leave me in his dust.

Twenty months later my blood pressure is down due to diet, exercise changes and getting out of the toxic work environment. I rode my bicycle over 53 miles last Saturday and climbed more than 5000 feet. Yes, I still ride a bicycle!

I am working on reducing my cholesterol by diet and exercise.

I know my best investment is in my own health! Life is short and is be enjoyed.

What about you?

If you missed my recent post on my upcoming book “Repurpose Your Career – A Practical Guide for Baby Boomers” please go check it out.

___________________________

Like what you read? Click here to subscribe to this blog! Better yet share it with your friends using the buttons below.

Marc Miller Career Design Specialist

Baby Boomer Retirement – Next Steps

I have been writing about all of the issues around the topic of Baby Boomer Retirement. Let’s talk about the next steps.

If you have not read all of the posts this is a good time to review before we address next steps.

• Baby Boomer Retirement Paradox
• Your Parents – Retirement and Pensions
• Baby Boomer Retirement – What happened?

Baby Boomers have had a major impact on just about every aspect of society. We will do the same as we redefine retirement.

We will look at a number of factors that will effect how retirement is redefined.

Where

There have been reports that many Baby Boomers have delayed or eliminated any plans to downsize their housing. The great recession has depressed housing prices such that many cannot afford to sell.

We will see housing and healthcare are the two issues that you will need to address in your next step.

Why

Why do you want to retire? It is usually for one of the following reasons:

• Tired of pursuing a career that no longer meets your personal needs
• Health issues have caused you to want to stop working
• Family members have health issues that you need to address. This includes both parents and spouses
• Custody of grandchildren and the need to stay home with them (This is happening at an alarming rate)
• You want more time to spend with family

Notice that only the first and last reasons are by choice.

What

What do you want to do in retirement?

One desire I hear all of the time from Baby Boomers is the desire to give back.

Can you fill this desire and still make money?  YES!!

When

Most of the Baby Boomer generation will retire at a much later date than planned and it will look very different.

How

How will we retire? In some ways we will never retire. That is good!!

I see my retirement as working less at something I love.I want the time to do other things like going with my friends this weekend camping and on a long bicycle ride. I want the flexibility to work when I want.

Here is the kicker for my next post. What factor will effect every decision we make going forward?

OUR HEALTH!

What are your responses to the Where, Why, What, When and How of Baby Boomer Retirement?

If you missed my recent post on my upcoming book “Repurpose Your Career – A Practical Guide for Baby Boomers” please go check it out.

___________________________

Like what you read? Click here to subscribe to this blog! Better yet share it with your friends using the buttons below.

Marc Miller Career Design Specialist

Baby Boomer Retirement

Has Baby Boomer Retirement become an oxymoron or a paradox as I suggested in an earlier post? The answer for most Baby Boomers is YES.

So what happened?

There are a whole set of factors but we need to go back to 1998 to really understand it.

Where were you in 1998? I was working for IBM and was in my early 40′s. I had a pension plan and a rapidly growing 401(k). My IRA was also growing. I traveled a lot and talked to people who had real estate that was escalating in value. Things were good. Our Baby Boomer Retirement outlook was great!

This was about as good as it would get.

There were signs that things were getting out of hand. I had a colleague who suggested that I get a second mortgage to invest in the market. He had a broker who could do a drive by valuation and get me the mortgage. Across that country Baby Boomers harvested money from their homes to invest but also to pay for vacations, cars, college education for our kids,…. Did we need to save? Heck No! Everything would continue to grow. Well until the bubble burst!

In 1999, I was standing on a soccer with a parent of one of my son’s teammates. He was saying he was going to dump Oracle stock because it was only going to double in price that year. It did not hit me until an hour or so later. Doubling you money in a year was not good enough!! Wow!

In March of 2001, the S & P 500, topped 1550! We all know what happened next. The Dot Com Bust. The S & P 500 reached above 1550 in August of 2007 and we all know what happened next. The Great Recession. As I write this post the S & P 500 sits just above 1410.

When we were suppose to be able to double or triple our retirement portfolios, most lost money. It was a lost decade for Baby Boomers.

What did we assume?

• Our pensions would continue to be there
• Our retirement savings would continue to grow at historical rates
• We would be able to retire early
• In the worse case, the gains in the value on our homes would pay for retirement

Which of these assumptions did you make? What happened to your Baby Boomer Retirement?

If you missed my recent post on my upcoming book “Repurpose Your Career – A Practical Guide for Baby Boomers” please go check it out.

___________________________

Like what you read? Click here to subscribe to this blog! Better yet share it with your friends using the buttons below.

Marc Miller Career Design Specialist

Your Parents – Retirement and Pensions

Have you considered how your parents retirement and pensions shaped your view of retirement?

In my last post Baby Boomer Retirement Paradox I talked about the history of retirement. It is relatively new idea. As baby boomers, our parents and grandparents were the first ever to enjoy retirement.

I want you to think back about your parents and grandparents. Think back about their friends, coworkers, neighbors and other people in their lives. How many of them smoked cigarettes?

I would expect the response from most of you would be most of them.

My mother and father did not smoke. My father was very anti-smoking. Why? My grandfather or Pop-Pop was a three pack a day Lucky Strike Smoker. I do not ever remember my Pop-Pop ever walking without a walker. He died in 1968 in his early seventies from complications of emphysema. I was twelve years old at the time.

I watched my Pop-Pop smoke through a hole in his throat. I was anti-smoking from that day forward.

Retirement and Pensions

In the early 1960′s most pension funds were funded for people like my Pop-Pop. After World War II, cigarette smoking was an accepted social behavior and at times considered healthy. The pension funds assumed people would live 10-15 years into retirement.

Let’s step into the 21st century. If you are 65 years old today and healthy. You have a very good chance of reaching 100 years old.  The big caveat in this equation is being 65 years old and healthy. More on that in a later post.

It is almost a given you will reach your 90′s. Over the next several decades the number of centenarians is expected to increase dramatically.

In the 1990′s when I was working for IBM, IBM discontinued their pension fund for everyone under 40 years old. They knew the traditional defined benefit pension was unsustainable. IBM converted me to a cash balance plan and then converted me back to the traditional pension in 1999. (They needed to avoid age discrimination lawsuits). When they converted me back they removed the health care benefit from the plan. I was eligible to retire at 30 years when I was 52 years old. They would have been on the hook to fund my health insurance for 13 years until I was eligible for medicare. They knew they could not afford that.

I left IBM less than a year later and took the cash balance total and rolled it into an IRA. I no longer trusted them.

One after another corporate pension funds disappeared and continue to disappear. It is only in the world of government that pensions still commonly exist. However, nationwide they are grossly underfunded.

Most of the assumptions we made about retirement were based on the experiences of our parents and grandparents. If they could retire to their “golden years”, we will also.

That assumption was wrong!

Do you have a pension plan at your company? Will it be there when you retire and continue to be solvent?

Next we will go back to fifteen years and visit 1998 when most baby boomers thought they would be able to retire in style!

If you missed my recent post on my upcoming book “Repurpose Your Career – A Practical Guide for Baby Boomers” please go check it out.

___________________________

Like what you read? Click here to subscribe to this blog! Better yet share it with your friends using the buttons below.

Marc Miller Career Design Specialist

Baby Boomer Retirement Paradox

Can you use the terms Baby Boomer and Retirement in the same sentence or is it a paradox or an oxymoron, kind of like military intelligence.

The concept of retirement was created by Chancellor Otto Von Bismarck of Germany in 1883 as a way to pacify the masses against the Marxists. He set a retirement age of 65 because no one lived that long.

During the great depression, there was a need to get older workers to retire and the only way to do this was to pay them.

This was solved by the Social Security Act of 1935. The reality most did not want to retire because there was nothing to do in retirement.

During the 1950′s golf course construction exploded and cheaper housing in Florida made a life of leisure possible in retirement. The visionary of retirement living was Del Webb when the first Sun City opened in early 1960. It was mobbed on the first day it opened.

There are two videos on the Sun City Museum website you have to watch.

1. Del Webb Sun City AZ Promo The Beginning Part I

2. Del Webb Sun City AZ Promo The Beginning Part 2
   

What all of this shows is the concept of retirement is a relatively new concept.

For many of us, our parents and grandparents were able to retire with plenty to do. Their work was their play!

As a Baby Boomer I was brought up to believe that I would be able to do the same!

There is a great New York Times article that you should read called The History of Retirement, From Early Man to A.A.R.P.

Let’s return to the 1998

In 1998 did you think you were going to be able to retire at 55, 60, or 65? Some of the people I traveled with back then thought they would be able to retire in their 40′s!

The stock market was roaring!

Lot’s of people were making money on the appreciation of their homes!

Some did not think about retirement. That was way to far away.

What happened?

80% of baby boomers now say they will need to work after retirement. Retirement is being delayed for many. Most will not be able to retire as they planned.

To explain what happened you have to look at assumptions that were made, changes made by the federal government, and a lot of bad behavior on our part.

We will discuss those in the next few posts. What are your retirement plans?

If you missed my recent post on my upcoming book “Repurpose Your Career – A Practical Guide for Baby Boomers” please go check it out.

___________________________

Like what you read? Click here to subscribe to this blog! Better yet share it with your friends using the buttons below.

Marc Miller Career Design Specialist

Frightening Baby Boomer Facts

I want to talk about Five Frightening Baby Boomer Facts that come from the Motley Fool article 17 Frightening Facts About Retirement Savings in America. 

• A 65-year-old couple retiring in 2012 is estimated to need $240,000 to cover medical expenses throughout retirement. (Source:Fidelity Investments) My comment - This is above and beyond what Medicare will pay.
• Half of current retirees surveyed say they left the work force unexpectedly as a result of health problems, disability, or getting laid off. If you think you’ll just “work forever” instead of planning for retirement, you may want to think again. (Source: Employee Benefit Research Institute) My comment - Do you have a Plan B?
• Nearly 75% of retirees have not saved enough and said they would save more if they could do it all over again. (Source: Health and Retirement Study) My comment - If current retires did not think they saved enough, is it time to rethink your retirement plans?
• 56% of workers report that they have not attempted to calculate how much money they will need to have saved for a comfortable retirement. (Source: Employee Benefit Research Institute) My comment – I had this conversation with a friend today. We are the same age but I have a 28 year old son who is out of the house and off my payroll and he has a daughter in middle school. He is scared to run the calculator!
• Average household net worth was $31,000 when both partners were in poor health but more than $400,000 when in excellent health. (Source: Health and Retirement Study). My comment – This is a double edge sword. The better your health the longer you will live and the more money you will need. I talked about the article written by Scott Burns earlier this year titled How Much is a Future Year Worth.

This is only five of the seventeen facts in the Motley Fool post – 17 Frightening Facts About Retirement Savings in America.

I strongly suggest you look at your plans and whether retirement as we were sold and marketed actually makes sense.

My next post will be the start of a series called The Baby Boomer Retirement Paradox.

Are you ready? Have you run a retirement calculator or are you in denial!

In the mean time you can also download my whitepaper “Don’t Retire Even If you Can and What to do Instead – A Baby Boomer Manifesto” for free.

or

If you missed my recent post on my upcoming book “Repurpose Your Career – A Practical Guide for Baby Boomers” please go check it out.

___________________________

Like what you read? Click here to subscribe to this blog! Better yet share it with your friends using the buttons below.

Marc Miller Career Design Specialist

I have written four posts on the state of retirement in the last two weeks:

• Transition to Retirement – Retirement Really? You are really going to RETIRE?
• Transition to Retirement – Go out on your own instead! Really??
• Why work? Is it because you have to? Is it because you want to?
• You reach 65, do you need to work, want to work or do you retire?

There were two great articles in the newspaper over the weekend that give two very different perspectives on the state of retirement for baby boomers.

The NY Times Op Ed section had the article Our Ridiculous Approach to Retirement.

The author states:

Seventy-five percent of Americans nearing retirement age in 2010 had less than $30,000 in their retirement accounts. The specter of downward mobility in retirement is a looming reality for both middle- and higher-income workers. Almost half of middle-class workers, 49 percent, will be poor or near poor in retirement, living on a food budget of about $5 a day.

She also states:

To maintain living standards into old age we need roughly 20 times our annual income in financial wealth. If you earn $100,000 at retirement, you need about $2 million beyond what you will receive from Social Security. If you have an income-producing partner and a paid-off house, you need less. This number is startling in light of the stone-cold fact that most people aged 50 to 64 have nothing or next to nothing in retirement accounts and thus will rely solely on Social Security.

Have you calculated your number? For most of you the answer is NO!

Scott Burns wrote a great piece titled How Much Is A Future Year Worth?

Scott writes:

There are two kinds of people in this world. Spenders. And Savers. There is no middle ground.

The savers prepare for every contingency in life. They have retirement savings. They have a reserve fund. They have long term care insurance. And they never borrow money. They do this by putting off until tomorrow (or much further) what they might do today. Some call them by their technical name: Party Poopers.

Their dilemma is summarized in a single statement: “If you don’t buy that Corvette, you can be sure your grandson will.”

Spenders can usually be recognized by their vacations, the newer model cars in their garage, their restaurant spending and the fact that they drink high-priced California wines with weird names instead of Three Buck Chuck.

Their dilemma is summarized in another statement: “My retirement will be fine as long as I die by Friday.”

The first article basically says that the vast majority of baby boomers are in trouble as it relates to retirement.

The second article says if you are a saver like me, then I may be preparing for a future that does not exist and I should enjoy myself now! Plus, if you die early it does not matter that you did not save for retirement.

Take a moment to read both articles and let me know what you think!

• Our Ridiculous Approach to Retirement
• How Much Is A Future Year Worth

If you are interested in more baby boomer facts click here to download my baby boomer fact sheet.

You can also download my whitepaper “Don’t Retire Even If you Can and What to do Instead – A Baby Boomer Manifesto”

___________________________

The next round of the Cure for Career Insanity  starts on July 30th.  Go the the Cure for Career Insanity page for more information and to register.

Like what you read? Click here to subscribe to this blog!

Please visit my Career Pivot FaceBook page daily for interesting articles.

Please check out my one on one coaching packages or the Cure for Career Insanity webinars

Marc Miller Career Design Specialist