Millions of Baby Boomers are rapidly reaching retirement age in a phenomenon often referred to as the “silver tsunami,” which has resulted in a renewed focus on how this generation feels about their finances. According to Charles Schwab’s Modern Wealth Survey, a significant 66% of Boomers believe they are in a better position to reach their financial goals than previous generations. This intriguing statistic begs the question: how did this generation find themselves so well positioned financially? The answer lies in a combination of proactive planning, disciplined investing, and seeking professional advice. Let’s explore the key steps Boomers have taken to achieve financial confidence and success.
1. Conduct your research and seek expert advice
In today’s world, there is an overwhelming amount of information online, and it can be difficult to discern what financial advice is trustworthy. While “finfluencers” may be gaining traction among younger generations, Boomers are most likely to use a financial professional or institution, such as a financial adviser, investment firm, or accountant, for financial advice. They noted the top reasons for trusting these professional sources are their proven track record of success (53%) and the proper financial certifications and credentials (45%). A financial adviser can help you navigate the complex world of investing, but it’s important 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? If you are seeking assistance with financial decisions, you will want to understand the different designations you encounter and create a list of questions to ask a potential adviser to find the right fit. Boomers have prioritized finding expert advice that aligns with their specific financial situation and goals. By leveraging professional guidance, they gain access to tailored financial strategies that offer a greater likelihood of achieving their objectives.
2. Create a financial plan
When it comes to managing your finances and preparing for retirement, the quote “if you fail to plan, you plan to fail” could not be more true. A financial plan is essentially a roadmap to attain your goals. It is easier and more affordable to get a financial plan today than it’s ever been before, whether you get started with a do-it-yourself digital financial plan or have an in-depth conversation with a professional. Boomers noted that once they created a financial plan, they felt more in control of their finances and in turn more confident they would reach their financial goals.
While more than one-third of Boomers have taken the necessary steps to document their financial plan (38%), another third (34%) have only thought about their financial goals. It’s important that you discuss your financial goals and ensure you have a plan in place for your situation. Many firms, including Schwab, offer free online tools and education and employ Certified Financial Planners® that you can meet with on a one-time or ongoing basis. This hands-on approach to financial planning has allowed Boomers to set realistic and achievable financial targets, providing them with a structured path to follow as they work toward their long-term financial health.
3. Develop an investment strategy
An investment strategy goes hand-in-hand with a financial plan. In fact, Schwab’s first investing principle is to establish a financial plan based on your goals, as these will help guide how conservative or aggressive your strategy should be. Are you saving for a dream trip, a second home, or a child’s education? Knowing your goals will help you determine if you need a strategy focused on growth or stability. The next step is to build a diversified portfolio based on both your capacity to take on and tolerate risk. A well-diversified portfolio can help mitigate risk and improve the potential for returns, a strategy that many Boomers have found beneficial.
While most firms offer you the option to invest on your own, consulting a financial adviser can help simplify the process of identifying the products and services that best meet your needs. An adviser can assist in creating a tailored investment strategy that aligns with your overall financial plan, ensures that you remain on track to meet your financial goals, and gives you confidence in your investment decisions. Boomers’ reliance on professional guidance and a clear investment strategy has provided them with the necessary tools to navigate market fluctuations and achieve long-term financial stability.
4. Remain engaged
Millions of Baby Boomers are swiftly approaching retirement age, a phenomenon often labeled as the “silver tsunami.” This has led to a renewed focus on their financial outlook. According to Charles Schwab’s Modern Wealth Survey, a notable 66% of Boomers believe they are in a better financial position than previous generations. This fascinating statistic raises the question: how have they managed to achieve such financial stability? The answer is found in a mix of strategic planning, disciplined investing, and professional guidance. These elements have played a crucial role in helping Boomers secure their financial future. Often, Boomers began saving early in their careers, took advantage of employer-sponsored retirement plans like 401(k)s, and consistently sought advice from financial advisors. Moreover, many have diversified their investment portfolios and kept a long-term perspective, allowing them to weather market fluctuations. By combining these practices, Boomers have built a robust financial foundation, ensuring they can enjoy a comfortable retirement.