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The “baby boomers,” Americans born between 1946 and 1964, are moving into their 50s and 60s. Unfortunately, many are facing dual financial pressures. Their kids may need help paying for increasingly expensive colleges. Their folks are getting older and living longer, and boomers may be called on to make up the shortfall in their parents’ retirement income, or to pay for long-term care. On top of that, boomers are struggling to provide for their own retirement and pay for their groceries. No wonder they feel squeezed.
Careful planning and a little diligence can help to alleviate some of this pressure.
First, identify your priorities. Then set realistic goals to address them, putting the bulk of your financial resources and energy toward meeting the most important goals first.
Retirement
You may have to rethink your retirement target age in light of other financial demands like college tuition and care for elderly parents. Working longer can have distinct benefits. Besides funding an accustomed lifestyle for a few more years, working longer and leaving your retirement accounts intact will give the funds more time to grow.
Education
If your child is still young, start saving early and invest for growth. If your child is ready to start college but isn’t financially prepared, consider letting him or her finance a portion of the cost by working or obtaining loans.
College-age kids have their working lives ahead of them and can use their future income to repay loans.
Parents
For many, helping to pay for the high cost of a parent’s long-term care is a priority. A year in a nursing home can cost $30,000 or more. At some point, your parents may need your financial help to cope with such high expenses. In the meantime, suggest that your parents consider options such as long-term care insurance.
If you’re facing some of these issues and would like help analyzing your options, give an accounting firm a call.
Barry R. Gilchrist is a certified public accountant with Wessel & Co. of Johnstown.
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