Baby Boomers are positioned to become the beneficiaries of the largest wealth transfer in Canadian history as they inherit the wealth of their thrifty “Silent Generation” parents. The Boomers are near or even past the end of their savings period and as they enter retirement, they will be faced with new challenges.
As we did in our first “Millennials on the Retirement Stage” blog, we will first try to provide a better understanding of this generation’s challenges before we attempt to address them. Let’s start by looking at some of the Baby Boomers’ key attributes.
They have a “Live-to-Work” Attitude
Boomers live to work and as a result have been prone to work/life imbalance. For them, transitioning to retirement will require a shift in mindset. Preparing for the lifestyle changes that retirement brings is equally as important as all the financial considerations.
They are a Sandwich Generation
This generation is sandwiched between adult children and aging parents. The aging parents may depend on their Boomer children financially and/or physically. Given what’s known as the Boomers’ “helicopter parenting” style, it is commonplace for them to lend a helping hand to their Millennial children well into their childrens' adult years. They tend to continue to be involved in their childrens' lives, providing advice as well as financial and moral support.
They are Great Spenders!
Given that Boomers are the wealthiest generation so far, they have embraced consumerism full force. The Boomers’ spending habits have changed as they age. For example, at this stage in their lives, they are more interested in a holiday adventure, completing their bucket list, or a life experience rather than acquisition of goods. However, the impulse to spend is still present as evidenced by their strong interest in online shopping.
They are Balanced Investors
Generally, Boomers are “balanced" investors. They value and trust their financial advisors and are more concerned with the performance of their investments than the fees they pay to earn that performance.
They are Dealing with New Fears
Given the improvements in life expectancy, Boomers expect to live for a long time. The fear of running out of money or not being able to afford the lifestyle they are accustomed to are some of the retirement fears that Boomers face.
Stay tuned for our next blog where we explore some of the ways Boomers can address these issues in order to prepare for a smooth and successful transition to retirement.