There's no getting around it: Baby boomers are officially middle-aged. Millions of Americans born in 1959 will turn 50 this year; and many boomers born right after World War II have already begun receiving Social Security benefits.
Chances are that most boomers didn't grow up with the same depression-era mentality as their parents, which explains why some find it difficult to live within their means and probably haven't saved as much as they should for a rainy day or retirement.
And, when you consider soaring costs for health care, energy and food – coupled with falling housing prices and stock values – it's easy to see why many worry their retirement savings might run out too soon.
Whether you're rapidly approaching the half-century mark or have already passed it by, here are a few financial questions you should probably be asking yourself:
- Am I saving enough for retirement?
- Do I understand how Social Security and other retirement benefits work?
- Is my budget realistic? If I don't already have one, where do I start?
- How do interest rates impact the true cost of loans and credit purchases?
- What's my credit score and why is it so important?
- How can banking fees and penalties impact my account balances?
- Where can I turn if my debt gets out of control?
- How can I balance raising kids and assisting aging parents while protecting my own financial future?
"50 Ways" contains 50 easy-to-follow tips on how to live happily within your means, create and manage a budget and use banking products and other financial services wisely. It also contains web links and phone numbers where you can get more information on a host of important retirement-related topics.
Answering the question about saving enough for retirement, AARP Financial and Chase recommend planning to have 60 to 80 percent of pre-retirement income to maintain your current lifestyle after retirement. How you get there depends on many factors, including:
- Expected benefits from Social Security, 401(k) plan, pension, IRA and personal savings.
- When you started saving – the earlier you begin, the greater your savings will "compound" or grow.
- How your savings and retirement accounts are invested – higher-risk investments like stocks have greater potential for growth, but also greater risks in the short term.
- Age at retirement and expected lifespan.
- Expected inflation and tax rates after retirement.
Even if you're not quite ready for – or able to afford – retirement just yet, it's still a good idea to prepare yourself now so that when the time comes, you won't be caught off guard.
By Marie Nelson