February 26, 2016

One of the largest generations in our history has already started to enter retirement, the Baby Boomers. In addition, over the past few years many of Rochester's historically large corporate employers have experienced tough times, among them Kodak, Bausch & Lomb, and most recently Xerox.

The combination of a large retirement age work force and corporate instability leave many who are still working in the Boomer generation asking.... "Am I Next?"

With downsizing happening or on the horizon and millennials coming up the ranks, Baby Boomers are on the precipice of a major life change: retirement.

Here are 5 things to consider:

  1. What does retirement look like? Whether you're planning to stay local, move to a warmer climate, or travel the world it helps to know what you're saving for. Work with your advisor to understand how much income you need to support your desired retirement lifestyle.
  2. Account Structure and Beneficiaries - Once you know your goals, ensuring your accounts are structured properly to meet your goal is vital. 401ks with employer matches is a great way to earn "free money". If you are self-employed you may consider starting an SEP or SIMPLE IRA allowing for larger annual contributions than a traditional or Roth IRA. Work with your advisor to understand your options and which are most suitable. You advisor should also ensure you have named beneficiaries on ALL accounts-whether they are retirement or brokerage accounts. This helps to avoid probate.
  3. Taxes - The goal is to put together a strategy that allows you to maximize your savings and tax benefits in retirement. Working with an advisor and CPA (who I have the pleasure of working with daily) can help leverage tax efficient planning.
  4. Plan for tough times - Did you know that on average 43% of couples do not know their spouses annual take home pay? This is an issue if tragedy arises and a spouse passes away suddenly or you get divorced and all of a sudden you're in the dark. Both partners need to have a full understanding of household investments, income, and cash flow. Ensuring you choose an advisor you are confident will care for your family/spouse, even if you pass away, is invaluable especially if your spouse is not the primary financial decision maker.

Even if you are 100% confident with your level of job security, having a retirement plan does more than just put numbers on paper. It delivers the highest valued intangible feeling: peace of mind. Being able to sleep at night knowing that you have a plan and that plan is specifically created for you is exactly why you should talk with an advisor. While the Baby Boomers are perhaps closest to retirement, millennials should have a plan too. It is never too early to start taking steps toward living the one life you have the way you deserve to live it.

Caroline Hill, Financial Advisor

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(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).