You don’t want to face a retirement in which you are forced into lowering your living standards. Yet that is exactly what the majority of baby-boomer households are up against. They may not have a choice in how they live their retirement years, because they’re not prepared.
Retirement isn’t as easy as everyone thinks it is. It’s emotionally difficult not having a steady paycheck and the peace of mind a paycheck can provide. You have an idea of how much your living expenses will be, but you don’t necessarily expect the dream vacation or car your spouse suddenly needs to have. And even if you save enough, it’s still not easy.
I was speaking with a client this week who thankfully has saved enough money to retire but commented that at age 62, he’s not sure what he wants to do. He said, “It’s weird—I’ve never thought I’d have a problem with retirement. When I was 45, I thought I knew exactly how I wanted to retire. But now that I’m here, I’m not so sure anymore. Do I work more? I’d prefer not to log the long hours. If I cut them back, can I keep the business going?” Even with a solid retirement plan, he’s not 100% sure. What does that mean for those without a plan at all?
Being prepared for retirement gives you options. It helps you make good decisions and reduce the bad ones. Too many investors are entering their golden years ill-prepared to live like they’re used to living. An astonishing 51% of early-boomer households, headed by those ages 55 to 64, face a retirement with lower living standards, according to a 2009 study by the Center for Retirement Research at Boston College.
Saving as much as you can and keeping what you make is so important, both before and in retirement. Having a portfolio that will meet your lifestyle will allow you to figure out, at your own speed, what your retirement will look like. And having options so you can live how you want to live sounds pretty good to me.