Financial analysts say that we Babyboomers have planned our retirements poorly. One reason is the post-1980s American tendency to “live in the now” instead of planning for the future, but another is that, until recently, financial professionals based their recommendations on the assumption that most of us would be dead by our 70’s. Today, the average retiree will live well into her 80’s; many will live past 100. Financial consultants now say we should plan as if we’re going to live to be 105 years-old. Unfortunately, most of us will not be lucky enough to just “hit the wall” (being active right up to the last minute.) The average American will live with several years of disability before leaving the planet. We have to plan for care costs as well. Here’s how.
1) Work with a financial consultant. Professionals can help you determine the income you will need to maintain the retirement lifestyle you want. Be realistic and start working toward insuring the necessary income. Live well within (hopefully under) your earning power; get rid of debt and create an emergency fund. Your financial advisor can suggest appropriate short- and long term investments, and find ways to make any extra money make money for you.
2) Investigate long term care insurance options. . Many of us don’t think about this until it’s too late: we no longer qualify because of poor health, or we are over age 65 and premiums are prohibitively high. Some life insurance plans offer options that allow face value to cover care costs. This leaves fewer dollars for beneficiaries, but can make our later years easier.
3) Understand that there is financial assistance for everything in this country except being old. Financial aid for higher education and training (grants and loans), mortgage assistance, disability programs, and public assistance are available to support younger adults, but parents tend to sacrifice retirement funds instead. Unless US economic realities change, today’s younger adults are not likely to be in a position to take care of us. We MUST prepare to take care of ourselves.
4) Resist the urge to assume massive debt, or use your retirement funds to pay for college. If your kids’ grades don’t earn scholarships, lots of private scholarship money goes unawarded every year. You will have to do some homework to find legitimate (no-fee) search programs, but they do exist. If you can’t find scholarship money, kids may have to choose community colleges instead of the Ivy League, or take local college credits over the summer, so they can get out of private schools on time (or early.) They will also need to serve as many internships as possible to improve their chances of employment. Many will have to also learn a trade to finance their dreams. These strategies not only strengthen our kids, they also free up our resources to insure that we won’t be in their pockets as we age.
5) Insist that your adult children be adults. We have to allow our kids to learn what we learned: you earn the right to do what you want to do by doing what you have to do. I don’t believe the Pullman porters aspired to carry bags for people who thought they were invisible. This was the best option a hostile social environment offered, but these strong, brilliant men were determined to feed their families. That didn’t mean that their minds, or spirits were fettered. It didn’t keep them from learning what they wanted to learn, or taking leadership in their communities, and it didn’t steal their ability to insure better options for the next generation. Our kids can’t expect to start as CEO of the company,or get promotions without doing the work. Also, as painful and disappointing as it can be to everyone, we have to insist that our adult children support their own lifestyles. Many won’t admit that we allowing our kids to live the lifestyle we earned, but they can’t expect to start off where we ended up.
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