Baby boomers are approaching retirement age and are faced with decisions of how they want to retire, when they will stop working and how they will support themselves and their families after they stop working. Many baby boomers starting establishing a long-term financial plan early in life using wise investments and financial products such as life insurance and annuities to secure access to funds in retirement as well as the safe distribution of assets once they pass away.
A recent survey analyzing the way baby boomers are or plan to transition into retirement found the number of Americans entering retirement at age 65 increased. The data revealed 45 percent of 65-year-old baby boomers are now fully retired, up from 19 percent in 2008. Further, 63 percent of baby boomers are receiving Social Security benefits, and half of those boomers started collecting the benefits earlier than they originally planned and a mere 5 percent retired later than they wanted.
The average age of retirement was 59.7 for men and 57.2 for women. Of the boomers who retired at 65, just 6 percent did so because they could afford it, while 36 percent retired because they reached their retirement age and no longer wanted to work. Another 18 percent retired for health reasons, 6 percent were laid off and could not find work and 14 percent needed to retire or were too tired to keep working.
The study found 37 percent of baby boomers who retired earlier than they planned did so for health-related reasons, while those who retired later than expected 27 percent cited a need for retirement income to pay for daily expenses and 13 percent wanted to stay active. About 60 percent of baby boomers are at least somewhat confident that Social Security benefits will provide adequate support for the remainder of their life, but financial products such as life insurance can create a financial safety net in the event of unexpected bills or purchases along the way.
While many baby boomers said they were optimistic about their futures, another study found 93 percent of baby boomers provide financial support for their adult children and 58 percent assist their aging parents. These expenses will not disappear when baby boomers retire, but rather add financial burden and strain to retirement savings.
The study found 55 percent of baby boomers have allowed their children to move in with them and live rent free, while others are offering support for their elderly parents as well.
"Boomers are feeling the pressure financially and emotionally," says Suzanna de Baca, vice president of wealth strategies at a financial firm. "In many cases they're sandwiched between children who are unemployed or struggling to pay down their student loan debt and aging parents who are facing complex health and financial issues."
The data revealed 22 percent of boomers pay for aging parents' groceries, 15 percent pay medical bills and 14 percent cover utility expenses. With regard to their young adult children, 71 percent of boomers helped pay for their college tuition or student loans, 53 percent helped them buy a car and many others still contribute to health insurance, rent, utility and other expenses.