The easiest way for your children to learn about money is for you not to have any. — Katherine Whitehorn
CBS News’s MoneyWatch announced a new report issued by Merrill Lynch, in collaboration with Age Wave, which could change the way we view retirement.
Entitled Family and Retirement: The Elephant in the Room [PDF], the report found that many retirees fail to consider the effect their retirement will have on their families. In fact, they’ll often fail to even discuss their retirement with their families.
This unfortunate refusal to include families in retirement planning has some dire consequences. Among them are:
- More than half of retirees have provided financial support to their families in the last five years, and have not factored that support into their planning.
- 56% of people age 50 and older would rather begin passing on their assets during their lifetime, rather than at the end of their life.
MoneyWatch writer Steve Vernon wisely advises some careful planning for generating an income during retirement that will cover living expenses. That means a very careful distribution of social security income, pension benefits, and savings. Vernon also advises purchasing long-term care insurance, a step most retirees choose not even to think about.
76% of Boomers will keep working beyond retirement age, in completely new careers or jobs.
The report itself goes on to highlight some striking new trends started by the Baby Boomer generation:
James P. Gorman, President of the Global Private Client Group, says that Baby Boomer will completely overhaul the concept of retirement. “With Boomers living longer and remaining engaged and employed beyond age 65, many of the traditional financial assumptions regarding retirement need to be reexamined,” he writes.
While 76% of Boomers will continue to keep working beyond retirement age, they will do so in completely new careers or jobs. Remember, they’re the generation that thought anything was possible; so they’ll reflect that optimism and creative thinking in how they choose to reinvent themselves. Gorman refers to this new way of thinking as “the longevity bonus.” If you feel you’ll live to be a hundred, you’ll take appropriately optimistic steps in your retirement planning.
Another innovative Boomer idea is the alternation of intervals of work with intervals of leisure. The idea of the eight-hour day or 40-hour week will just about die for them. Boomers are recasting the American work week in the image of their own plans and dreams.
The most significant revelation of the report is how Boomers have changed over the years. They've gone from being narcissistic kids to concerned family members; or as the report puts it, “the ‘me’ generation becomes the ‘we’ generation.”
“The ‘me’ generation has grown up — now with deep concerns for the well-being of their children, their parents, and their communities. Boomers are now ten times more likely to ‘put others first’ (43%) than ‘put themselves first’ (4%).”
In the explosive 1960s, Boomers raged against “the Establishment,” and pooh-poohed pleas to “work within the system.” Now they’re doing just that, as they begin to think about precisely how their families will fit into their retirement planning. It was once their mantra to “never trust anyone over thirty.” As the population ages, Boomers will be forced to trust more people over thirty than they had ever thought possible. Including themselves.