Just last week, the Employee Benefits Research Institute (EBRI) announced that almost half of the 76 million baby boomers will run out of money within 10-20 years of their retirement. This is not expendable income – they won’t have enough money for rent, food, transportation or medication.
It may become the ultimate revenge for Boomer parents: unable to afford to live on their own, many will be forced to return to live with their own middle-aged children. Some parents may find themselves “repaying” the goodwill the parents bestowed to children living at home after college or when saving money for a down payment, etc. Unfortunately, EBRI studies also indicate that Gen Xers are facing similar issues when planning for retirement. The question is, how does one prepare for this significant shift in lifestyle?
In The Hard Times Guide to Retirement Security, author Mark Miller outlines options for Boomers currently planning for retirement. Miller claims the scary truth is that “it will be very difficult for most people to set aside enough money to maintain their pre-retirement standard of living in old age.” Remaining at one’s job a few years longer is recommended by Miller. It allows for additional income and equally important, access to healthcare insurance.
Sounds like good advice as long as that is an option with your employer. It may not be enough if you plan to remain independent. Revising your expectations of retirement, restructuring your “American Dream” lifestyle now and aligning your goals with your personal values are all techniques for creating sustainable success, i.e., avoid moving back in with the kids!
We’ll address each of these strategies in the weeks to come in our blog and newsletters. If you can’t wait, pick up a copy of Upside: How to Zig when Life Zags at your local Barnes & Noble.