Boomers are either retired or approaching retirement. While inflation has cooled down, it has also taken a toll on many Americans who, in turn, have put retirement planning and saving on the backburner. And now, retirees report that the past years have left them worrying about several factors, top of which is inflation (71%), meeting future healthcare needs (51%) and potential reductions in Social Security (46%), according to a Goldman Sachs Asset Management survey.
Advertisement: High Yield Savings Offers
Retirement Savings: Here’s How Much Cash Baby Boomers Need To Retire in the Next 5 Years
Learn: 3 Ways To Recession-Proof Your Retirement
In turn, a new study found that 25% of pre-retirees — non-retired Americans aged 55-65 — say they are planning to retire later than expected, and another 15% are unsure if they will ever retire, according to Nationwide’s eighth annual Advisor Authority survey, powered by the Nationwide Retirement Institute.
Yet, with this new chapter in their lives, there are many steps they can take to avoid financial setbacks and enjoy their golden years. Experts shared some tips on what to do to have a successful retirement.
Eliminate All Debt
Baby boomers should strive to eliminate all debt well before retirement, said Michael Collins, CFA, adjunct professor, Endicott College and founder of WinCap.
“This means paying off any credit card or student loan debt, as well as any car loans or mortgages. Having no financial obligations in retirement can significantly reduce stress, and allows for more financial freedom,” added Collins.
Kyle Enright, president of Achieve Lending, further points out that boomers should pay particular attention to credit card debt.
“Consider that paying off a credit card balance with a 20% interest rate is equivalent to earning a 20% return. Plus, you will provide yourself with breathing room on a fixed income,” said Enright. “If you need to, look into a personal loan to help you pay off the debt, debt resolution (settlement) or credit counseling.”
Boomers Prefer To Retire Abroad: Top 5 Places To Retire Outside of the US
Work With a Financial Advisor
“When we get sick, we go to the doctor. When we get into legal trouble, we hire a lawyer. Yet, somehow people believe that they should be able to navigate the ever increasingly perilous financial waters without professional help,” said Robert R. Johnson, PhD, CFA, professor of finance at Heider College of Business, Creighton University.
According to Johnson, one of the most important functions of a financial advisor is working with clients to establish an Investment Policy Statement (IPS) — a written document that clearly sets out a client’s return objectives and risk tolerance over that client’s relevant time horizon, along with applicable constraints such as liquidity needs and tax circumstances.