Musings

Get Thee to a Financial Planner

Financial-3207895_1920 MusingsI often write about Boomer issues that relate to working past the traditional retirement age, including how to find inspiration for what to do in your second career. I rarely tackle retirement-related financial issues because that is neither my area of expertise nor my topical interest. But I feel compelled to give any reader of this blog a piece of personal, heartfelt advice: If you're approaching the second half of your life and you haven't yet engaged a financial planner, do yourself a favor and get one NOW.

My wife and I engaged a financial planner in our mid-thirties. It was one of the smartest moves we have ever made. With that person's counsel, we have been able to make wise financial decisions regarding budgeting, investments, insurance, purchasing and selling homes, paying for college, and retirement. In combination with a CPA and an estate attorney, the financial planner has also helped us with tax and estate planning.

It is never too late to get a financial planner. As CFP Casey Weade writes for Kiplinger, a financial planner becomes all the more important as we approach our retirement years: "For most people, problems, questions and opportunities are more likely to crop up as their goals change from accumulating money to protecting it. And that usually happens five to 10 years before retirement."

While professional Boomers may be tempted to handle financial planning themselves, Do-It-Yourselfers (DIYers) lack objectivity and broad knowledge of investments. Weade says, "An adviser can help retirees avoid ill-timed investment losses that could devastate their retirement plans, offer guaranteed income options to those who want reliable payments, and discuss the best 401(k) and IRA distribution choices. An adviser also can offer advice on Social Security income options that DIYers often don’t know about." As for DIY investing, Weade writes that "your investment strategy should match your overall financial plan and long-term goals. Too often, self-investing leads to over-concentrating on the tools being utilized rather than the ultimate goal you are trying to achieve."

Boomers are living a lot longer than our parents did, so making smart financial decisions that protect us in our later years is critically important. What are you waiting for? Get thee to a financial planner!

Image: Pixabay.com

Read about the brands you loved as a kid in the book, BOOMER BRANDS

 


Making Sense of the Retirement Transition

Musings Wood-3041024_1920More and more experts advise those closing in on retirement to view it as a transitional time. An article appearing on NextAvenue.org suggests that retirees should plan on a longer transition time than they expect:

"It could take months or it could take a few years for you to finally feel comfortable in your new skin. It’s completely natural and understandable for this transition to take a long time. After all, you were involved in the world of work for decades and those habits won’t melt away instantly. ... Instead of commuting to an office, commute to your workbench or to a class at the local community college. Embrace the change while diving into what makes you unique."

The article also encourages retirees to "take a moment to breathe":

"...take a week or two to relax before you jump into your new routines. By taking a mini-vacation first, you’ll be better prepared to approach your new life with a clear mind that’s well-rested and ready for the challenge. The way a honeymoon marks the transition from single life into marriage, this pre-retirement breather period marks another (equally) important transition in your life."

A key point in the article is the need to "build a strong mental foundation for change." This includes building a strong identity, a strong social network and a strong mission. "Mission" may not be a word you associate with retirement, but here's some excellent advice:

"One of the biggest fears people have about retirement is that they’ll lose the feeling of being useful. Figure out your mission, whether it’s helping look after grandkids or mentoring local teens on their career paths. Some find that learning a new language or hitting their list of must-see travel destinations around the world make wonderful missions, too!"

You have the ability to reinvent yourself as you enter life's second stage, but you don't have to rush into it. That may be hard, because our society is so focused on instant gratification. Still, if you take time to assess who you are and what you need to be happy, the transition should be a lot easier.

Image: Pixabay.com

Have you heard about the new book, Boomer Brands?


Financial Security in Retirement is Important, But...

Musings Man-505353_1920There are so many sources of information that talk about the financial aspects of retirement. Of course, nothing could be more important than being financial secure when you retire. But what about psychic security? One of the most challenging pieces of the retirement puzzle is finding your true self, especially if you have spent decades working in a single profession. Making the transition from a career into a whole different way of life -- one that may not be centered around full-time work -- can be disruptive and even painful for the ill-prepared.

That's why I like the assessment provided by Michael Rubin in his article for The Balance, "4 Non-Financial Keys for a Happy Retirement." Rubin discusses these four elements in detail:

  1. Work - Rubin makes the point that work in retirement can be a gratifying experience if it is voluntary. He writes "studies have shown that people who voluntarily continue to work, even just part-time, past the age of 65 are happier than their full retired peers."
  2. Relationships - Moving on from work also means moving on from work-related relationships. Maintaining relationships in retirement is essential to avoid social isolation. Rubin indicates "recent studies have suggested that loneliness can result in higher risk of developing Alzheimer's and other dementia-related diseases."
  3. Keeping Busy - Filling time when there is no full-time job to go to can be daunting, but busy retirees are generally happier. "One study showed that the happiest retirees engage in three to four regular activities and the retirees with the busiest schedules tended to be the happiest," writes Rubin.
  4. Staying Active and Healthy -  As Rubin notes, "in a recent study, having good health was outranked financial security as the most important ingredient for a happy retirement, but the two are more intertwined than you might think." One key point is that one's health in retirement directly relates to medical expenses, which can be significant for less healthy retirees.

Rubin's article puts retirement into perspective by emphasizing the non-financial aspects of a happy retirement. Food for thought.

Image: Pixabay.com

Have you heard about the new book, Boomer Brands?


Deciding What to Do Next

Musings Screen Shot 2019-05-16 at 11.23.50 AMWhether you call it retirement, "rewiring," or your "second act," if you're over 65, you may be thinking, "What's next?" This is a particularly vexing question as it relates to a long career centered on a particular industry or discipline, but it is just as profound when you consider potential life choices. Your second act may not be just about what you do with your time -- it may also involve where you do it and with whom.

That's why I think it makes a lot of sense to start thinking about life's next stage even before you get there. My colleague Nancy Collamer, a "second act" coach, has some great advice to help you navigate new territory. She advises the following:

  1. Complete a self-assessment.
  2. Use a decision-making tool.
  3. Talk to people.
  4. Write things down. Take walks. Repeat.
  5. Try things out.

This is smart counsel, delivered in a logical sequence. The self-assessment will help you identify "what you want, what you do well and what you find meaningful." A decision-making tool will guide you in determining which of the options available you should pursue. Talking to advisors and friends comes next, because "they will challenge your assumptions, support your decisions and connect you with key resources or people that could prove invaluable when making your final analysis." Then you should put it in writing -- think about what you wrote down -- and refine it. According to Collamer, "it’s amazing how the act of writing brings a level of clarity to the decision making process that is impossible to achieve by keeping your thoughts in your head." Finally, just do it -- "you’ll never make up your mind about a career move until you start trying things out in small ways," writes Collamer.

Nancy Collamer offers additional guidance, as well as links to helpful resources in her article. Read it here: https://www.mylifestylecareer.com/how-to-choose-a-perfect-second-act-career/

Image: Stuart Miles, freedigitalphotos.net

Have you heard about the new book, Boomer Brands?


The Fight Against Ageism

Musings Woman-208723_1920I've written a number of blog posts about ageism and its impact on Boomers. Ageism happens in both obvious and subtle ways. The older you get, the more you may notice that you feel either overlooked by society or even invisible in their eyes. You are not being paranoid. The messages and signals that surround you are incontrovertible.

  • Younger people may be dismissive.
  • Retail store clerks may call you "honey" or "dear."
  • People demonstrate impatience and frustration if you seem to have trouble hearing or understanding them.
  • Finding clothes to fit your older body is challenging.
  • Advertising on television is largely geared to the young, and those ads that include "gray hairs" are inevitably pitching drugs for serious ailments.
  • Your employer thinks nothing of letting you go because of your age, despite your years of service, experience and expertise.

According to an article in Business Insider, three million older workers can't find high-paying jobs because of ageism.

These kinds of indignities are suffered on a daily basis by those over the not-so-old age of 65. It's ageism, and it's discriminatory.

We need more people, organizations, and politicians fighting against ageism. I've mentioned an organization called Respectful Exits in the past. Respectful Exits works with employers to change the view of older employees by instituting a "Longevity Agenda." AARP offers a special section on its website called "Working at 50+" that has information for older workers.

You should definitely check out a new ageism clearinghouse started by Ashton Applewhite, an anti-ageism activist. It's called Old School and it is a free ageism resource center with tools, books, blogs, podcasts and more.

Boomers are some 74 million strong. The more we all speak out against ageism, the more our society will begin to respect us. Everyone gets older -- and ageism will happen to all of them someday if we don't stop it now!

Image: Pixabay

Have you heard about the new book, Boomer Brands?


Is "Early Retirement" a Myth?

Musings Baby-boomer-442252_1920
Early retirement -- generally defined as retiring from the traditional workplace before the retirement age of 65 -- is an idyllic-sounding notion. For most Boomers, it is also next to impossible. Sure, you'll read about those senior executives or business owners who have managed to amass enough wealth in their forties, fifties or early sixties to contemplate leaving the workplace behind. It happens -- but rarely.

Still, is early retirement a myth? Well, not necessarily. Part of it depends on exactly how you define "retirement." It may not mean stopping work altogether, but instead changing your way or working, or even your perception of work. You could, in fact, retire early from one career and start an entirely new career. Or you could find a creative way to retire early from your current job and patch together a variety of stimulating opportunities that still provide a reasonable income. The fact is, retiring early may be a realistic goal for you -- but one that cannot be achieved without a really good handle on your financial situation.

Writing for The Balance, Rebecca Lake identifies "six signs" that are legitimate indicators you may very well be in a position to retire early. They are:

  1. You're Debt Free
  2. You've Estimated Your Retirement Needs
  3. You've Saved for Retirement in Multiple Pots
  4. You've Covered Your Insurance Gaps
  5. Your Children Don't Rely on You Financially
  6. You're in a Retirement Frame of Mind

Read Rebecca's article for some valuable insight into each of these signs. You may not see all of them in your own situation, but each is worthy of some careful thought before leaping into the potential abyss of retirement.

Fortunately, I saw enough of these signs to consider early retirement. My wife and I were both marketing professionals. I owned a direct marketing agency. We decided to retire from our careers in our late fifties. We combined early retirement with a relocation from the expensive Northeast to the less expensive South. At the same time our daughter went to college -- we saved for that during our working years.

When we relocated, we decided to start a small service business together, ran it for seven years, and then sold it. It kept us busy and generated an income that was supplemented by retirement savings. Starting to draw Social Security at full retirement age helped us financially, as did going onto Medicare at age 65. Now, I'm a part-time writer, and my wife volunteers and is a caretaker for her mother. We never viewed "retirement" in the traditional sense -- to us, it was more about going through phases of life. Some would certainly define what we did as retiring early, while others might say we just transitioned into doing something different.

Retiring early may or may not be for you -- but it's really about how each of us defines the concept of early retirement.

Image: Pixabay

Have you heard about the new book, Boomer Brands?


The Looming Retirement Crisis

MusingsNowadays, it's much easier to imagine retirement than it is to actually retire. You've probably seen the sobering statistics about Boomers who have no choice but to continue to work for years beyond the traditional retirement age. Many Boomers have not saved enough to comfortably support themselves into their 80s or even 90s. Life expectancy is increasing, even as vehicles for retirement savings have either dried up or remained stagnant.

A recent survey by Lexington Law indicated that 24 percent of seniors said their biggest regret was not saving and investing sooner. The other most common regret is taking on too much credit card debt. A separate poll by the firm revealed two shocking statistics: 70 percent of respondents did not know the age at which Social Security benefits begin, and less than half know how much of their earnings they should be contributing to retirement savings.

In the past, pensions were a legitimate source of retirement savings. In 1998, for example, an estimated 60 percent of employees were covered by company pension plans. Today, pension plans barely exist. Instead, Boomers have had to self-fund retirement savings, and they do receive help from their employers through matching contributions to 401(k) plans. Thankfully, the majority of companies do offer some type of defined benefit retirement plan such as a 401(k), but it is the employee who shoulders the bulk of the financial responsibility.

Typically, the other main source of retirement income is attributed to Social Security. The money you put into Social Security over your employed years does come back to you in some form, of course. Most financial experts agree, however, that it is best to hold off on collecting as long as possible, certainly until your full retirement age (which varies based on your birth year), if not until age 70, when you collect the maximum amount. Some Boomers are sorely disappointed when they realize that Social Security payments are not nearly what they need to live on in retirement.

With no pensions, modest 401(k)s or other retirement savings plans, and Social Security that barely keeps up with living expenses, there is a looming retirement crisis in our country. Boomers who have not by now set aside sufficient retirement funds will be thrown head first into this crisis when they stop earning income. There is a glimmer of hope that the job market will continue to be favorable toward Boomers, at least on a part-time basis, but there is no long-term guarantee that jobs will be available to aging Americans. This may be one reason a fairly high percentage of Boomers start their own businesses or find freelance work rather than compete in the traditional job market.

The oldest Boomers are already approaching their mid-70s. How financially secure are they? The youngest Boomers will be 60 in just five years. Do they have a financial plan for retirement? These are challenging questions to ponder. 

Have you heard about the new book, Boomer Brands?


The Failure of Knowledge Transfer in American Business

MusingsIf the headline of this post sounds ominous, it is meant to be just that. It's a sad fact that American business in general is failing at the transfer of knowledge from its departing employees. Writing for Next Avenue, Richard Eisenberg puts the situation into perspective: "4 million boomers a year leave the workforce and boomers comprise 31 percent of workers; 56 percent of retiring boomers are in leadership positions. That’s a lot of knowledge to go pfffft."

A survey of workers between the ages of 54 and 72, conducted by The Harris Poll for recruiting firm Express Employment Professionals, tells a dreary story. The majority of boomer workers (57 percent) "say they have shared half or less of the knowledge needed to perform their job responsibilities with those who will assume those responsibilities after they retire," even though 81 percent of boomer workers "are overwhelmingly willing to mentor the next generation." In addition, "only 44 percent say their company has an adequate successor in place for when they retire, and 30 percent feel their companies may lose key client relationships if they retire." While employers might greatly benefit from retaining boomer workers on a part-time basis, "only 20 percent of working boomers say their employer offers 'semi-retirement' options."

Bill Stoller, CEO of Express Employment Professionals, told Richard Eisenberg, “Such a poor transfer of knowledge was surprising to us. You’ve got to have a process in place to have someone follow in the footsteps of someone retiring. It doesn’t appear companies are thinking about that.” Paul Rupert, founder of Respectful Exits, added, “What is described as the systematic failure of companies to mine their pre-retirees for critical knowledge and intellectual property is part of a general failure to appreciate the value of who and what is walking out the door of today’s knowledge-based employers.”

Results from another survey conducted by Transamerica Center for Retirement Studies indicated that "only 4 percent of retirees said their employers encouraged employees to participate in succession planning, training and mentoring," according to Eisenberg.

Many American companies are literally throwing out valuable knowledge when boomer employees retire. In fairness, not all businesses are so short-sighted; a handful of them have knowledge transfer programs of some sort, such as phased retirement or mentoring. Still, the vast majority of firms simply don't have a mechanism for retiring employees to impart what they know to the employees who replace them.

Why? Is this part of the age discrimination that we all know impacts boomers? Would employers just like to have boomers exit as quickly and quietly as possible? Are they really so obtuse as to not realize that retiring boomers have a wealth of knowledge that would help facilitate a transition to a successor?

Whatever the reasons, it really makes no sense to discard intellectual capital that a company invested in over many years.

Have you heard about the new book, Boomer Brands?


How Boomers Impact the Job Market

MusingsStatistically, Boomers are about to lose their position as the generation with the highest U.S. population, according to the Pew Research Center. In 2019, Millennials are expected to reach 73 million in number while Boomers will top out at 72 million.

Still, the number of Boomers in the job market is significant. According to an article in Forbes, workers age 55-plus accounted for around 23 percent of the labor market in 2018, up from about 18 percent in 2008, ten years earlier. In terms of the labor force participation rate, younger workers have either remained flat or declined from 1998 to 2018, while the 55-64 and 65-plus age groups have steadily increased.

Aparna Mathur, who authored the article, sees a number of reasons for this phenomenon. For one thing, many older workers need to work longer for financial reasons. For another, older workers are healthier and living longer, so they have the ability to remain in the work force longer than previous generations. Just as important, older workers want to remain in the workforce because work is rewarding for them.

The interesting side effect is that the current economy boasts a very low unemployment rate, which means it is more challenging for companies to find skilled workers. Guess what -- Boomers are skilled workers! Boomers can also offer employers flexibility in that they are willing and often want to work part-time, which turns out to be more cost-effective for the hiring companies.

So let's hope we are nearing a point at which the continuing desire of Boomers to work, and their resiliency in the labor market, intersects with the employment needs of companies. Only then will our society conquer age discrimination and realize the value that Boomers continue to bring to the table.

Have you heard about the new book, Boomer Brands?

 


Age Discrimination is Alive and Well

MusingsAge discrimination in the American workplace remains problematic for anyone over the age of 50. An ongoing study by Pro Publica and the Urban Institute, has followed since 1992 a nationally representative sample of about 20,000 people from the time they turn 50 through the rest of their lives. Through 2016, the study found that 56 percent of this sample were laid off at least once or left jobs under financially damaging circumstances. The analysis further showed that only 10 percent of these workers ever again earn as much as they did before their employment setbacks. Richard Johnson, an urban economist from the Urban Institute who worked on the study, concluded, “For the majority of older Americans, working after 50 is considerably riskier and more turbulent than we previously thought.”

There is strong evidence from the study that a majority of Americans over 50 with stable jobs are pushed out of work. The study showed that "28 percent of stable, longtime employees sustain at least one damaging layoff by their employers between turning 50 and leaving work for retirement... An additional 13 percent of workers who start their 50s in long-held positions unexpectedly retire under conditions that suggest they were forced out."

The bottom line: The data analysis conducted suggests "as many as 22 million of these people have or will suffer a layoff, forced retirement or other involuntary job separation. Of these, only a little over 2 million have recovered or will." In an excellent article on Pro Publica about age discrimination and the results of the study, Carl Van Horn, a Rutgers University professor and director of the Heldrich Center for Workforce Development, commented, “There’s no safe haven in today’s labor market. Even older workers who have held jobs with the same employer for decades may be laid off without warning.”

This is not the first time I have reported on age discrimination in this blog. The more I read about age discrimination, the more I wonder if it is representative of a broader societal attitude toward aging. Employers routinely discriminate against older employees, hiring younger (i.e. less expensive) employees to take their place -- making the federal age discrimination law nothing more than a paper tiger. It is true that a few companies boast hiring older employees, but it is comparatively only a handful. 

Are we really at the stage where people over 50 can be thrown out of the workforce simply because of their age? Apparently, the answer is yes. Imagine the experience and knowledge base that is being tossed out as well. It's a sad commentary with no end in sight.