From the May 2008 issue of Boomer Market Advisor • Subscribe!

Boomer confidence crashes with falling economy

As economic indicators continue to trend downward, baby boomers feel less confident that their retirement
savings will see them through retirement. But few may know what steps to take next. The Longevity Alliance recommends you share the following five tips to reassure your clients:

1. Make an honest assessment of your total retirement savings if you live to be 100. Will you have the funds to live the life you want? What do you see your life looking like when you are 70, 80 and 90? Do you have a strategic
investment plan that meets your current goals? Are you following it, or are adjustments appropriate?

2. Have a long-term care plan. Long-term care costs can quickly destroy a retirement nest-egg. And more than 70 percent of people over age 65 will likely experience some need for long-term care, according to the U.S. Department of Health and Human Services. With annual average costs of more than $77,500 per year, even a short stay can deplete your savings. Have a plan for how you will fund this astronomical cost - whether self-funding or insurance.

3. Brace yourself for rising healthcare costs. Many retirees are surprised by healthcare costs in retirement -- which, for a couple retiring at 65, can amount to more than $200,000. Understand what Medicare covers and what it doesn't, as well as the cost for supplemental insurance and out-of-pocket expenses.

4. Have a work plan. More and more people are working longer - for financial reasons and for social reasons. Encore careers, entrepreneurial ventures and parttime work are just a few of the options. An increasing number of companies are looking for older workers to fill their ranks - many with flexible work schedules. The time when you decide to begin receiving Social Security payments can have a tremendous impact on your income in retirement.

5. Consider creating your own pension plan. With the decline in employees covered by defined benefit pension plans, it's smart to think about how to create your own pension plan to cover fixed costs in retirement. There are a number of alternative ways to structure this and it is best to seek advice from a financial advisor.

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