The Baby Boomer’s Guide to Preparing Before Retirement

Baby Boomers - Steps Before Retirement (Baby Boomer)


If you among the many baby boomer and are currently earning at your best in your career, you’re probably also wondering how you would be handling your finances during retirement to lead a comfortable life. After all, with all the news headlines about retirement challenges going around, there is quite a bit of concern on the matter.

It’s not all bad news, however. In fact, Financial Finesse’s recent report on generation-wise financial wellness says that Baby Boomers are in fact the strongest when it comes to financial position. And with some good judgement and sound planning, they can take advantage of this financial position to save enough to have a fulfilling and financially plentiful retirement.

Here are some steps that you can take as a Baby Boomer to secure your own retirement prospects:

Make a spending plan while keeping retirement budget in view:

Much like Baby Boomers and retirement, budgeting tends to get a bad reputation, mostly because it is imagined as a constant struggle to find a way to monitor spending all the time. This couldn’t be farther than the truth, however.

In reality, budgeting is the art of bringing a balance between wants and needs, and one’s spending power. It’s a great way to both save and be grounded at the same time. By making a proactive plan around your spending habits, you can plan where you will put your money well in advance, and make sure that your life goals and spending are in the same league.

Besides, there are other very key advantages to making a spending plan – from avoiding spending too much before retirement (and increase your debt), save up some extra money to pay your current debts before retirement, and make the best of specialized tax-advantaged accounts such as HSAs, 401(k)s, and of course IRAs.

Consider your options for health insurance:

One of retirement’s biggest concerns when it comes to expenses are those that are related to health care. Quite legitimately so, as healthcare requirements tend to complicate and increase as one nears (and later enters and further advances into) their retirement years.

In the event that you already have medical insurance for retirement, you must begin to review your options, and estimate how much said options would cost you. If the plan you are on is a highly-deductible one along with plan with an HSA option, you must do you best to set aside the $3,450 max for individual coverage, or the $6,900 max for family coverage – you can also save an additional $1,000 if you are 55 or above.

Estimate what you would need for long-term care:

Long-term care is both a requirement and a cost-drainage factor on retirement expenses. And while it can never be avoided, one can do their best to work around it to earn and save enough for a full comfortable retirement. Not planning in advance can lead to depletion of funds within a few years followed by financial misery.

While making your plans, you must bear in mind that Medicare does not cover expenses for long-term care. Which leaves you to either liquify assets or use your retirement savings. The best alternative to this would be to purchase long-term care insurance in advance that will help you stay protected when you have retired.

Here are some ways in which you can begin to make your expense plan for long-term healthcare:

  • If your healthcare estimate run to the $200k to $2-3 million range in terms of assets, you should consider going for an insurance plan that offers long-term coverage.
  • Regular reviewing of your investment portfolio will help you understand if it is properly diversified.
  • See if the state you live in offers any long-term care partnership programs. Such programs help you to store assets that equal to amount of insurance coverage. Even if you have utilized the benefits, you would be eligible for Medicaid.
  • If you have a percentage as high as 10-15% in a single stock, make sure to diversify it. Stocks fluctuate with time, and you do not need the upheavals that come with a plummeting stock close to the age of retirement.

Estimate the amount of money you would need during retirement:

One of the best things you can do is to estimate the amount of money you will need during retirement is to review your finances. Yet, ironically, people rarely (if ever) take out the time to run basic retirement calculations. This is due to reasons such as the fear of finding their status and an uncertainty on the tools required for their progress, among others.

Reviewing your current finance and expenses and making an estimated plan of your future finance and expenses will help you understand what course of action you should take to understand what you will need and what you can do to spend your retirement in peace and financial fulfillment.