If you think your retirement is going to look like your parents’ or grandparents’ retirement, think again. Here are three things you should be considering:
1. The Bank of Mom and Dad won’t always be open. There are two sides to this. If you’re currently supporting your adult children, you’re not alone. According to a BMO Wealth Institute study, 81% of parents say they have provided their adult children with some financial support. However, you’ll want to evaluate if that’s possible to sustain in the long-term. Ask yourself: Will helping my adult child (buy a house, afford a vacation, transition to a new job …) put my own financial future in jeopardy?
While some Gen Xers have become successful DIY investors, most have not. As the article points out: “They bring an attitude of ‘I’ll figure this out someday when I have time, and then I’ll make some smart decisions that will catch me up.'” But that just isn’t true. It’s time for this generation to start looking to financial experts for help.
I think managing investments for retirement income in the “distribution” phase is much scarier than figuring out how to invest during the “accumulation” phase. At least in the accumulation phase you have some time on your side. At distribution, there is no make-up time for investment mistakes or market downturns.
The study revealed a link between the discipline an individual brings to financial planning and their happiness in retirement. Retirees who identify themselves as “highly disciplined” planners are much more likely than non-planners to say that they are happy in retirement (91% vs. 63%).
If you ask self-employed workers about retirement savings, a shocking number will give exactly the same answer, ‘What retirement savings?’ This is a major problem, not only for the self-employed, but for the United States as a whole. With more and more people without regular jobs and the benefits that come with them, the article says that our nation faces a ticking retirement time bomb. Here’s why.