Baby Boomers: Can We Ever Retire?

According to a new Associated Press survey, only 11% of Baby Boomers feel they have enough saved to retire, 25% doubt they can ever stop working. Staggeringly disappointing. But the harsh reality as we look at the non-retirement phenomenon of Baby Boomers is that it won't be changing for the better any time soon. The next "retirement age" generation seriously needs to think about what the landscape will look like 10-15 years from now if we don't create our own cash flow systems today - better, easier, more secure and more profitable cash flow systems.

Yes, the money is still in real estate, but smart real estate - not just any real estate! There are a number of profitable markets to be had outside our beloved Canadian borders, but you have to know what you're doing.This is why I've been extensively traveling, conducting due diligence on an average of 5-10 properties per week. And after careful scrutiny, I'm quite pleased with the results. Sometimes cash flow isn't everything, depending on the location and what is happening in the area - I've found some prime property with tremendous appreciation opportunities.

But I'm still in the midst of my travels, so I will have more to share with you at a later time. In the meantime, watch this video, read the article and think about your plans for retirement ... when will you be ready?



Baby Boomers: Can We Ever Retire?

(NECN: Peter Howe, Boston) The Dow Jones Industrial Average has come back 6,000 points from its worst low during the post-crash winter of 2009, with stocks basically making up what they've lost in the last three years.

But a major new Associated Press/LifeGoesStrong.com survey released Tuesday showed for millions of U.S. Baby Boomers -- those born between 1946 and 1964 -- their expectations they can ever realize a traditional retirement have permanently changed. Just 11 percent of boomers are sure they've saved enough to retire; 44 percent know they have not, and the rest are at best somewhat confident they're saving and investing enough to allow them to quit working. And of boomers, nearly 3 out of 5 say the value of their home, savings, and retirement plans have fallen since the 2008 market meltdown.

"I see clients all the time who've reduced their contribution to retirement accounts when money gets tight,'' said Kimberly Harris, a financial planner with Armstrong Advisory Group in Needham, Mass. "Always pay yourself first -- such a basic financial planning rule, but make sure you do not give up for your retirement.''

That's a lesson many younger Americans have taken to heart after seeing what a financial jam their older boomer workmates and associates have run into in the last two years -- like Matt Birmingham, a 27-year-old Boston real-estate businessman from Wrentham, Mass.

"I feel bad for a lot of people who did work their whole lives and lost it on the markets, or lost it in real estate, or just poor investments,'' Birmingham said. As a result, "I don't rely on depending on Social Security, and I am putting about $1,000 a month into a separate savings account.''

Harris said for many boomers with ravaged or non-existent 401(k)'s, the answer may mean things like making your kids pay for or borrow to pay for their college educations. "Your kids [may] need to take responsibility. If it means paying for themselves now, you'd rather have them do that than have to pay for you in retirement.'' Harris's rule of thumb for clients is those in their 20s and 30s need to be salting away 10 to 15 percent of income in a well-planned retirement savings and investment account, and for those who find themselves at age 45 not yet having saved, or not having saved close to enough, "You need to be very aggressive. It's time to kind of reevaluate your budget as a family and say, 'Where can we cut corners? And where can we spare some money so that I can aggressively save, I would say at a minimum, 20 percent of household income per year.''

It's basic math, but with a rule of thumb you shouldn't use up more than 5 percent of retirement savings annually, coming up with $40,000 to supplement Social Security means amassing an $800,000 nest egg, something that is far easier to achieve if you start at age 25 than age 50.

Of course, the same AP survey found 1 in 4 boomers are resigned to simply never retiring because they haven't saved anywhere near enough money or don't have a pension from work.

Notably, another roughly 40 percent say they plan to work part- or full-time after hitting retirement age, either because they want to, or they think they need to work into their 70s to afford retirement after that, or for health coverage, or just because they want to stay active. As of 2008, fewer than half of Americans aged 65 to 74 were in fact working. So if this survey's findings hold true, in coming years you would see a lot more senior citizens in the workplace -- some by choice, many out of necessity.