There is something inarguably beautiful about the movement of time. For better or for worse, we all grow old one day and the way the commandments of social existence works is that we have to put up our feet and retire from work. The baby boomer generation, however, had a different idea of retirement and the Gen X and Y has an almost bipolar notion.
Baby boomers’ notion of retirement came crashing down
Baby boomers had seen a different kind of life fashion itself in front of them — one that was markedly different from the one lived by their predecessors amidst the uncertainty of the 1st and the 2nd World Wars. This made them part-hedonistic and part nonchalant.
Today, when they are on the horizon of retirement, they find themselves woefully short of a decent retirement nest egg. To boot home my point, men may have only $85,000 in their Super kitty and women have even less, an abject $58,000 in their purse once they retire. To put things in perspective, the need is somewhere around $350,000 for a comfortable retirement and the figures talk of an unbridgeable gap.
Higher life expectancy to tackle
Higher life expectancy has thrown the baby boomers out of gear, and unless they have an investment plan dating back a couple of decades, they would find their Super kitty coming a cropper midway through their post-retirement life — or even earlier.
New generations are in a different boot
Things are a little different for the X and Y generations. Above all, they are still a considerable distance away from the time they hang their boots and unless they think that “future is a time that remains indefinitely in the future”, they may make some steady headway.
Diversify asset base
I think the younger generations should go for a three-pronged attack. First, they should start diversifying their asset base and ensure that theirs is a potent mix of growth assets and income generating assets. They should target their home equity wisely and use their tax returns to clear mortgage dues, above any other obligation.
Settle in a cheaper area
Ideally, if geography is not an aspect they need to care about in their professional lives, Gen X and Y guys should look towards settling down in a relatively cheaper area. If geography is a concern, they should downsize post-retirement into a cheaper area where reverse mortgage options open the door of superb refinancing for them.
Choose a profession you find pleasure in
I think that our coming generations may have to work well into their 70s so they should check and prefigure their personal work culture. Choosing a work that can become a burden in a few years won’t help them in hanging till a time their bones and muscle lose lustre. They can only hope to work till their 70s if the jobs they find for themselves give them pleasure and are followed using a mix of watertight discipline and faculty for recreation.
While future is a place (and not a time) we invariably arrive at, it is upon us to make it a fun place to occupy; perhaps with some focused retirement planning.
How are you planning for your retirement?
