The Best Investment for Baby Boomers May Be in Themselves!

With more than 10,000 Baby Boomers reaching retirement age every day, we are now in the midst of the greatest transfer of wealth our nation has ever experienced and the majority of adults in the US have not done the proper planning to ensure their wishes are honored upon their deaths.

The Baby Boomers generation consists of people born between the years 1946 and 1964. This includes people who will be between 51 and 70 years old in 2016.

As this segment of the population ages, their focus is on all aspects of their health – spiritual, emotional and physical. Baby Boomers have more discretionary income than any other age group. (USAToday)

Baby Boomers once believed if they worked hard for several decades, the market, the government and their employer would one day take care of them. However, an economic shift and dramatic life lengthening due to scientific advancements has changed their way of thinking. The original life expectancy of a Baby Boomer was 75 years but with the advances in health care, nutrition and technology, the average life expectancy is now well into their 80s, 90s or even longer.

Baby Boomers are worried about retirement.

61% of people are more afraid of outliving their money than they are of dying. (WealthWave) An AARP poll shows that 25% of people ages 46-64 say they have no retirement savings and 26% of those surveyed have no personal savings.

Boomers are worried about outliving personal savings and retirement funds. They are expected to live longer and healthier lives than previous generations. That is good news, but it does raise some issues. Will the savings they have managed to put away, combined with any other government or job related retirement benefits, be enough to provide a comfortable lifestyle? This seems like a valid concern. It is also part of the reason that most boomers do not plan to totally give up working after they pass retirement age.

4 important things to remember when completing an estate plan:

1. Make sure a Medical Power of Attorney (aka Health Care Proxy), Living Will (aka Advance Directive) and Financial Power of Attorney (aka Durable Power of Attorney) are in place. This allows you to express your wishes regarding what will happen if you cannot handle your financial and health-related decisions. Without these important documents a judge may appoint someone to make these decisions for you. Providing direction beforehand is a valuable gift to your loved ones, eliminating any question of your wishes being honored.

2. Create a Last Will & Testament. As uncomfortable as it may be, discuss with family members your wishes with regard to distribution of your assets, as well as your wishes with regard to financial and medical decisions Addressing those issues will allow you to make the decision of who gets what instead of the government deciding for you. These conversations will avoid a lot of potential controversy down the road.

People often get stuck on making decisions such as: who will be the Executor/Personal Representative, Guardian of minor children, or who will receive their assets. This indecision is often times the reason for delaying or not creating an estate plan. Considering of one’s demise or disability is not something that people think of everyday, nor do they want to. It’s important to educate others to think of these decisions as being liberating and empowering.

3. Be familiar with the state laws. How your assets and belongings are distributed upon your death may not be the way you intended. Without a Last Will & Testament, the distribution of your assets pass in accordance with state law. That’s not what most people want. Regardless of whether or not you are married your assets may not automatically pass to your spouse. Laws vary from state to state. Be sure you are aware of current laws in your state that concern dying without leaving a valid Last Will & Testament. In New York in particular, if you don’t have a will and you die with a spouse and children, 50% goes to the spouse, but the rest would go to the children. More typical is everything goes to the spouse, and when the spouse dies, it goes to the kids. An estate plan lets you decide.

4. Make sure beneficiaries are updated.  As life events occur, marriage, divorce, the birth or adoption of a child, or the death of a spouse or loved one, the need to review and update your financial plan, estate plan and beneficiary designations is critical. Keep in mind that a Will only dictates the distribution of your individually owned assets. Assets that pass by beneficiary designation, such as life insurance and retirement accounts, do not pass under the terms of your Will, but rather by the beneficiary designation associated with it.

The greatest gift you can leave behind is a protected legacy.