Commentary: How baby boomers can increase their retirement confidence
How confident are you about retirement? Generally speaking, most of today's baby boomer workers feel confident that they'll be able to retire with a comfortable lifestyle, according to Transamerica's Retirement Survey of Workers. Sixty-two percen...
How confident are you about retirement?
Generally speaking, most of today's baby boomer workers feel confident that they'll be able to retire with a comfortable lifestyle, according to Transamerica's Retirement Survey of Workers. Sixty-two percent of baby boomers are confident, although only 15 percent feel "very confident" about their ability to have a comfortable lifestyle in retirement.
While the 62 percent is a heartening number, the fact remains that nearly two in five baby boomers aren't confident. With that in mind, here are three things that can make you more confident about your financial future in retirement.
Begin Thinking about Retirement Sooner
Many people who first come to see us seem to be either two days or two years away from retirement. While there are still planning opportunities we can implement if your retirement date is quickly approaching, the reality is that the earlier you begin thinking about and planning for retirement, the better.
Think about any large project you've undertaken. Those projects that you started working on earlier were the ones you probably felt more confident about successfully completing.
Alternatively, the projects you procrastinated on likely resulted in a mad scramble to get things done, thereby producing a lot of unneeded stress-and potentially a shoddy result.
The same holds true for retirement planning. The earlier you're able to formulate a plan and stick with it, the more confident you'll be throughout your working years that you'll be able to reach your long-term goals.
Get Educated about Retirement
One startling data point from the Transamerica survey was that 63 percent of baby boomers feel
they don't know as much as they think they should about retirement investing. That's a massive number, and it's a reason we believe that retirement confidence may not be as high as it could be.
We're both committed to financial education. After all, that's why we write this column and do our radio program. We believe that the more educated you are about personal finance, the more equipped you'll be to prepare for retirement and, ultimately, feel more secure about your future.
Have a Written Strategy
Being ready for retirement is more than just saving money-it also means having a comprehensive plan. Unfortunately, the Transamerica study found that only 13 percent of baby boomers have a written plan.
A written plan gives you something to look back on and to help guide your decisions. If the markets become volatile-and they almost certainly will at some point down the road-reflecting on your long-term plan can help you feel more at ease.
That doesn't mean, though, that once you have a written strategy that the job is done.
Just as the markets and the economy change over time, so too does your personal situation. Loved ones will pass away and grandchildren will be born. A vacation home in Florida may be purchased. An unexpected health condition may force you to retire earlier than you anticipated. All these are drastic shifts that may prompt updates to your financial plan, which is why it's so important that it's reviewed on a regular basis between you and your financial adviser.
Even though most baby boomers are confident about retirement, that doesn't mean that there isn't room for retirement confidence to continue to grow. Proactively planning and thinking ahead are two of the best ways for you to feel more confident about your future retirement.