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Financial Planning for Baby Boomers and Retirees

Financial Planning for Baby Boomers and Retirees

October 17, 2022

Baby boomers are reaching retirement age, and the reality of their finances is coming to light. Those who set themselves up for success years ago feel great excitement during this time, but others who may not be as well prepared aren't feeling the same. 

The good news? It's never too late to start saving, even for the boomer generation. Learn more about financial planning tips and retirement planning for baby boomers and retirees from your friends at Pathway Financial.

Evaluate Your Short-Term and Long-Term Financial Goals

The best way to prioritize your financial life is to make a note of your financial goals – both short-term and long-term. To do this, we recommend first taking a step back and evaluating what you already have to work with. What does your current financial situation look like? What things do you need to incorporate? Where do you want to be down the road?

Sit down with your spouse, partner, or family and discuss how finances look. It's important to be honest in the evaluation stage so you can appropriately plan for the future. Write everything down or create a digital spreadsheet to account for these items. It can also help to make a list of the financial requirements you anticipate having in the future and during your retirement.

Some of the items you'll need to plan for include the following:

Review Your Retirement Accounts

Congratulations! You've been saving for retirement for a long time, and now you can review everything you've piled away throughout your career. How do you plan to handle these assets moving forward? This includes keeping all existing retirement accounts separate or consolidating them into one. 

To create a sound financial retirement plan, we recommend talking with your company's benefits team to determine how to access the money in your retirement account, such as a 401(k), after you retire. We also recommend asking about options for leaving the money in the plan and making periodic withdrawals or rolling those funds into an individual retirement account (IRA). 

If you're unsure what to ask or how to engage with your company's benefits team, a financial planning professional like Pathway Financial can help facilitate these conversations. 

Retirement Planning Tips

1. Establish an Income Plan

A baby boomer receiving retirement advice from a financial advisor from Pathway Financial

Once you hit retirement, income and your plan around how to spend that money become essential:

  1. Decide on which accounts you plan to draw on first in retirement. Generally speaking, many people plan to start with taxable accounts for withdrawals to benefit from lower long-term capital gains rates.
  2. Access tax-deferred accounts (i.e., 401(k)s or IRAs), where distributions are taxed at ordinary income rates.
  3. Start utilizing your tax-free accounts (i.e., Roth IRAs, Roth 401(k)s) last.

Remember, this order may vary depending on your situation. We suggest seeking out the advice of a tax professional if your situation is complicated or you don't know where to start.

2. Create a Social Security Strategy

You can start benefiting from Social Security at age 62, but waiting just a few years longer will allow you to claim your full benefits. 

  • For individuals born between 1947 and 1954, your full retirement age (FRA) is 66. 
  • If you were born between 1955 and 1959, your FRA is between age 66 and 2 months and age 66 and 10 months, depending on your birth year. 
  • Those born in 1960 and later have an FRA of age 67. 

No matter your FRA, the longer you wait—up to 70 years old—the better and the higher your lifetime benefit may be. For those who are married, consider coordinating your claiming strategy around SS with your spouse to maximize the benefits. 

3. Have an Estate and Legacy Plan

Having a plan for what happens to your money and how your family is cared for in the future is essential at any age, but especially after you hit retirement. 

An effective estate management plan enables you to manage your affairs during your lifetime and control the distribution of your wealth after you pass. Your strategy should clearly outline your healthcare wishes and ensure that they're carried out – even in the event that you're unable to communicate what you want. It can even designate someone to manage your financial affairs should you be unable to do so or explain how you want estate affairs distributed, so there is no confusion or misinterpretation after the fact.

4. Evaluate Your Health Insurance Options

A woman receiving medication thanks to her health insurance plan set up with Pathway Financial

Healthcare costs are one of the biggest retirement planning concerns and can significantly impact your life and plans. Your health insurance options should be at the top of your list as you reach retirement age. From a budgeting and finance stance, health-related costs will amount to a significant portion of your future spending.

For those who have retiree medical insurance, it's important to start reviewing your options as soon as possible and the associated costs to plan for what's ahead. If you're unsure of what insurance options are best for you or what coverage you should look for, consult with a healthcare expert. 

5. Plan for Potential Long-Term Care Expenses

Long-term care costs can significantly drain your retirement nest egg, but you should prepare accordingly. Even those who save enough to retire comfortably can see their finances disappear after just a few years of long-term care expenses.

Planning for long-term care now can also help alleviate any pressure or reservations your family may have down the line. If you require care at some point, but your family doesn't have the financial means to afford it, a significant strain may be put on your loved ones. 

6. Take Aim at Debt

Carrying a large sum of debt into retirement is not ideal, so take aim at these numbers now. Partially for those on a fixed income, large sums of debt in retirement years can hamstring personal finances and keep families from living the way they want to. How do you tackle debts? Start by paying down accounts with the largest balances and the highest interest rates. From there, work through smaller, more manageable amounts and balances. 

7. Remember, it's never too late to save 

A baby boomer's retirement savings started due to retirement planning advice from financial advisors at Pathway Financial

Don't forget about the benefits that can come with saving now. Tax-advantaged savings include any type of investment, financial account, or savings plan exempt from taxation, tax-deferred, or other tax benefits. It is never too late to save and put away dollars for the future. 

Looking for additional retirement planning information? 

You can talk with the experts at Pathway Financial to help answer all your retirement planning questions and provide a path toward a comfortable retirement. Contact our team today to learn more!


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