Every day, more baby boomers retire from work. But only from work, as this Merrill Lynch survey shows.
Retirement is an opportunity for Baby Boomer women to renew personal interests and enjoy what’s important to them. According to the Merrill Lynch Age Wave Survey, “Americans’ Perspectives on New Retirement Realities and the Longevity Bonus,” 57 percent of retirees consider their golden years a whole new chapter in life and 51 percent pre-retirees plan to work in their retirement, viewing it as an opportunity for career reinvention. Especially for Boomer women, retirement has been an opportunity to think about living the lifestyle they want and to reevaluate how they view money. Women need to plan thoughtfully for a retirement that not only meets their needs financially, but also emotionally.
Understanding Your Goals
There are so many aspects to retirement—finances, health, family, giving, home, work, and leisure—that an early start can only better enable you to achieve the lifestyle you want. Maintain a clear sense of your goals and your emotional values as you make decisions. Many Boomer women redefine their roles in the household after their children leave for college. Some pursue new careers or have philanthropic interests, using both their money and their time to give back. But given the economy over the last few years, they’ve sometimes needed to support family members across multiple generations simultaneously.
The survey found that 52 percent of parents expect to provide their adult-age children with some form of ongoing support – financial, healthcare, housing or education – and 35 percent believe they will need to support their grandchildren in such ways. Take the time to review what you want, how you envision retirement and your long-term-care. So when circumstances change—whether it’s tending to an aging parent or having an adult child move back home—you’ll be more prepared to address them with a strategy already in place. Protecting your own well-being will better position you to care for the ones you love.
Embracing Financial Responsibility
Women are becoming increasingly involved with making financial decisions and collaborating with their spouses: three out of four men (73%) and women (76%) indicated they would like to have equal responsibility when making major financial decisions. Whether you’ve been in the investing process with your spouse for years or are just starting to have a conversation about what assets you own together, it’s important to have those discussions, especially when it comes to retirement planning.
Women have different retirement challenges. They tend to live longer than men, needing more income to support their retirement and long-term-care needs. More women than men cited running out of money among their top concerns (61% and 47%, respectively). Explore ways to save and invest to help make sure that retirement income doesn’t fall behind. Retirement planning isn’t a “one-size-fits-all” template or something completed over night. It’s a fluid process that involves variables and decisions that you make and adjust over time.
Growing Your Nest Egg
Retirement is about saving and growing your money to last throughout your lifetime. Preparing an investment strategy that meets your financial needs is critical. Women may need their retirement incomes to last longer than their male counterparts, so it’s important to select the best potential growth options for your situation. You don’t need to have one type of risk tolerance when it comes to your money—you can have multiple levels of risk depending on your goals. Work with your advisor to customize your approach.
Along with risk tolerance, evaluate where you are psychologically and emotionally. Even if you’re in a position for investing with higher risk, but your investments aren’t aligned with how you feel, it may not be the best decision for you. Understanding your own personal attitude and emotions toward your goals will help create an approach that suits your needs. With the guidance of a trusted financial professional, keep measuring your goals so that you’re on track to meet your desired retirement.
Careful planning can allow you to participate in the best aspects of retirement—enjoying deep connections and experiences with your family, friends, and community.
Nadia Allaudin is the founder of the “Women, Wealth, and Wisdom” forum, bringing together more than 400 women financial advisors and clients to foster deeper relationships and participate in discussions with renowned speakers on health/wellness, leadership and spiritual best practices.