Baby Boomers: Don’t let plans go bust

If you’re a baby boomer, you’re at the point in life where, if you haven’t actually entered retirement, you’re at least approaching the outskirts. But if you’re like many of your fellow boomers, you may be experiencing more than a little trepidation over your financial prospects as a retiree. That’s why it’s so important for you to determine what steps to take to help improve your chances of enjoying a comfortable retirement.

Just how worried are baby boomers about their future? Consider these numbers: Seventy-two percent of non-retired boomers think they will probably be forced to delay retirement, and 50% have little confidence that they will ever be able to retire, according to a recent AARP survey. Other surveys show a similarly bleak outlook among the baby boom generation.

Fortunately, when it comes to building resources for retirement, you have options. Of course, if you’re in one of the younger age cohorts of the baby boom generation, your possibilities are greater — you may still have time to take measures such as boosting your 401(k) and IRA contributions, reducing your debts and positioning your portfolio to provide you with a reasonable amount of growth potential.

But even if you are pretty close to retirement, or at least close to the point where you initially expected to retire, you can act to better your outcome. For one thing, you could re-evaluate your planned date of retirement. If you really don’t mind your job and could extend your working life for even a couple of years, you could help yourself enormously in at least three ways:

You’ll add on to your retirement accounts. The longer you work, the more you can contribute to your IRA and your 401(k) or other employers-sponsored account.

You may be able to delay taking Social Security. You can start taking Social Security as early as age 62, but your benefits will be permanently reduced unless you wait until your Full Retirement Age (FRA), which will likely be 66 or 67. Your payments can increase if you delay taking your benefits beyond your Full Retirement Age, up to age 70.

You may be able to delay tapping into your retirement vehicles. The longer you wait until you begin withdrawals from your IRA and 401(k), the more time you are giving these accounts to potentially grow. (Once you turn 70 ½, you will need to generally start taking withdrawals from a traditional IRA and a 401(k) or similar plan, but you don’t face this requirement with a Roth 401(k) account.)

As an alternative to delaying your retirement — or possibly as an additional step you can take along with a delay — you may be able to adjust your investment mix to provide you with the combination of growth and income that can help carry you through your retirement years. You can also be strategic about which investments you start taking withdrawals from, possibly allowing your portfolio to grow more than you had envisioned.

Start thinking now about ways you can help yourself achieve the retirement lifestyle you’ve pictured. You may want to consult with a professional financial advisor who can suggest the strategies and techniques most appropriate for your situation. In any case, with some careful planning, you can be a boomer whose retirement plans don’t go bust.

Doug Drost is a certified financial planner for Edward Jones, 2262 Reno Highway.