Think of dear old mom and dad and how they retired (if they've actually retired) -- perhaps with a nice traditional pension beginning around age 65, and lots of golf and gardening since then. That's not how you and I are likely to retire. Traditional pensions at many companies have grown problematic -- read this Chris Mallon article that discusses firms such as Delta Airlines
Retirement for Baby Boomers has some special aspects worth considering. For example, we're likely to keep working late into our lives, well beyond age 65. This is partly because it's probable that the age at which we can begin drawing Social Security payments (if they still exist) will keep being pushed forward. It's also partly because more and more people are finding great satisfaction in keeping busy with at least some part-time work in their golden years.
Then there's that life expectancy angle. We just keep living longer and longer, many of us. This has a major effect on us financially, because it means that our retirement money will need to last longer than our parents' nest eggs did. Figuring how to make your money meet your needs involves determining how much you'll need, how rapidly you can expect your savings and investments to grow, and how much income they'll provide.
To help them plan effectively, many Baby Boomers are turning to financial advisors. This may seem to run counter to the do-it-yourself attitude you'll often find here in Fooldom, but it's really not un-Foolish to seek professional help when you need it. We've even assembled some guidance for you on how to find a good advisor.
There's another interesting angle about Boomer retirement -- one that affects us investors. As Boomers leave corporations in droves, they'll be taking with them critical knowledge. In Fortune magazine, Anne Fisher interviewed David DeLong, author of Lost Knowledge: Confronting the Threat of an Aging Workforce. DeLong said that a knowledge drain will be a major problem: "It's partly the sheer numbers of people who will be leaving the full-time workforce. But in addition, the past 25 years have brought amazing advances in technology, and almost every job has gotten much more specialized and complex. So people who are leaving jobs today -- and it's only just starting; the first boomers turn 60 this year -- are taking with them new types of knowledge that didn't exist a generation ago."
So what should we pre-retirees do? Well, we need to make sure our own retirement plans are on track, lest we end up part of a scary statistic. We also need to plan not only financially, but also for our future quality of life. Give some thought to what you will do in retirement, and what work or activities you might enjoy. You might want to ease into retirement by starting some before you actually retire. And finally, if you're invested in companies that rely heavily on employee knowledge, give some thought to the aging of the employee base and how it might affect the firm's future.
Learn much more about the super-duper-critical topic of retirement planning in these valuable articles by Robert Brokamp:
- What Retirement Will Cost
- Wretched Retirement Realities
- 7 Social Security Myths
- Get an Instant 80% Return!
And while you're at it, grab a free trial of our Rule Your Retirement newsletter -- it arrives each month, bearing inspiration and information.
Longtime Fool contributor Selena Maranjian does not own shares of any companies mentioned in this article.