Are Baby Boomers Better Financially Prepared for Retirement?

January 15, 2025

Millions of Baby Boomers are rapidly approaching retirement age, causing a significant shift in focus towards how this generation perceives their financial readiness. According to Charles Schwab’s Modern Wealth Survey, 66% of Boomers believe they are in a better position to reach their financial goals than previous generations. This confidence stems from a combination of factors, including a positive relationship with money, active investment strategies, and a multitude of financial planning resources. This article outlines the steps Boomers have taken to feel better prepared for retirement and how others can emulate their approach to financial security.

1. Conduct thorough research and seek expert advice

In today’s world, the overwhelming amount of information available online can make it challenging to discern which financial advice is trustworthy. While “finfluencers” may be gaining traction among younger generations, Boomers are more likely to rely on a financial professional or institution, such as a financial advisor, investment firm, or accountant, for their financial advice. They noted that the top reasons for trusting these professional sources are their proven track record of success (53%) and appropriate financial certifications and credentials (45%).

A financial advisor can help navigate the complex world of investing, but it’s essential to carefully determine which professional resource is right for you and best meets your needs. Are you seeking help with budgeting and savings goals or more complex guidance around financial planning, wealth management, and tax planning? Understanding the different designations you encounter and creating a list of questions to ask a potential advisor will help you find the right fit for your financial situation. Seeking professional advice ensures that your investments are aligned with your goals, offering peace of mind and a clearer path to financial security.

2. Create a financial roadmap

Managing your finances and preparing for retirement is well-summarized by the quote, “If you fail to plan, you plan to fail.” A financial plan serves as a roadmap to attain your goals, making it crucial for individuals of all ages. Today, obtaining a financial plan is easier and more affordable than ever, whether you opt for a do-it-yourself digital financial plan or engage in an in-depth conversation with a professional advisor. Many Boomers noted that once they created a financial plan, they felt more in control of their finances and more confident in their ability to reach their financial goals.

While more than one-third of Boomers (38%) have documented their financial plan, another third (34%) have only considered their financial goals without formal documentation. It’s important to discuss your financial goals and ensure you have a plan tailored to your unique situation. Numerous firms, including Schwab, offer free online tools and education, as well as Certified Financial Planners® whom you can consult on either a one-time or ongoing basis. The establishment of a financial roadmap is a critical step in creating a sense of financial stability and confidence as you approach retirement.

3. Develop an investment approach

An investment strategy is inherently linked to a financial plan; one cannot exist effectively without the other. Schwab’s first investing principle underscores the importance of establishing a financial plan based on your goals, as these will guide how conservative or aggressive your strategy should be. Consider whether you’re saving for a dream trip, a second home, or a child’s education. Identifying your goals helps to determine whether your strategy should prioritize growth or stability.

The next step involves building a diversified portfolio that considers both your capacity to take on risks and your tolerance for them. While most firms provide options for self-directed investing, consulting a financial advisor can simplify identifying the products and services best suited to your needs. A personalized investment approach can ensure that your financial strategy aligns with your goals and risk tolerance, enhancing your potential for long-term success. By developing a robust investment strategy, Boomers have positioned themselves to better manage market fluctuations and secure their financial future.

4. Remain actively involved

Millions of Baby Boomers are nearing retirement, prompting a significant shift in how this generation views their financial readiness. According to Charles Schwab’s Modern Wealth Survey, a notable 66% of Boomers feel they are in a stronger position to achieve financial goals compared to previous generations. This sense of confidence is supported by several factors, such as a proactive relationship with money, strategic investment habits, and the accessibility of various financial planning tools. Boomers have actively engaged in practices like diversifying investments, regularly updating retirement plans, and seeking advice from financial advisors, which have all contributed to their enhanced sense of preparedness. The article highlights the methods Baby Boomers have adopted to boost their financial security and offers insights on how others can replicate these steps to ensure their own financial stability as they approach retirement. By focusing on these strategies, future retirees can better navigate the complexities of financial planning and feel more assured about their financial future.

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