The Baby Boomer generation covers individuals born from around 1948 to 1959. Many of the individuals in this age range are quickly approaching retirement after decades of work. Unfortunately, there are major concerns about this shift to retirement, as some people feel that their generation wasn’t taught how to handle personal finances.
This claim may seem bold on the surface, but let’s go over the statistics behind it, and focus on how:
- Baby Boomers Can Increase Their Knowledge of Personal Finances
- Younger Generations Can Plan to Handle Their Financial Needs
Personal Finance Knowledge and the Baby Boomers
So, what weren’t the Baby Boomers taught about personal finance? Many people first consider the stock market when trying to answer that question. After all, the stock market has changed a lot over the last few decades, and a lot of the rules about how if functioned were easy to miss.
While it is true that the tricks to managing stocks and bonds – along with keeping a diversified portfolio – were not taught to many in the Baby Boomer generation, there are other financial concerns involving:
Many in the Baby Boomer generation – around 70 million people – have simply not saved for retirement. In fact, one study in 2014 reported that around 33% of Baby Boomers had saved nothing for their retirement.
Baby Boomers who have saved for retirement have usually put away insufficient funds. Median retirement savings for the group hovered at $200,000. While this looks like a large number, many experts say you will need around $1 million to reach the end of your retirement.
High Amounts of Debt
Baby Boomers are also carrying significantly more debt than older generations. Studies have determined that – on average – Baby Boomers are carrying more than $100,000 in debt. Many members of this generation are still carrying a mortgage after they reach 65.
Handling Personal Finances Now
So, if some Baby Boomers did not get the financial education they needed when they were younger, what does that mean? High levels of debt and poor retirement savings can force individuals to continue working for longer.
A lack of retirement savings and the burden of debt can also force retirees to fall back on their family members or social services. This could create a strain in some areas of the country, especially where the population of Baby Boomers continues to increase. States like South Carolina, Florida, and Arizona could all be impacted.
Some of the younger members of the Baby Boomer generation still have time to increase their retirement savings. Anyone can take steps to handle high levels of debt. Some options for getting rid of debt can include:
- Refinancing a Mortgage
- Consolidating Credit Card Debt
- Paying Off Debt with a Lump Sum Payment
Getting the funds for a lump sum payment may not be as impossible as it sounds. Some individuals may be able to take out a low-interest personal loan from their bank or credit union. Individuals in many states, for example in the south can also get immediate funds with a title loan in South Carolina.
Learn More About Your Personal Finances Today
The Baby Boomer generation is not the only cohort in the U.S. that could benefit from learning more about personal finances. Millennials – along with members of Gen Z and Gen X – could all gain financial security by learning about:
- The Best Steps for Retirement Saving
- Real Estate Investing
- Tips for Handing the Stock Market
Keeping your debt low and your savings high can ensure that you are ready when you retire, no matter what generational group you belong to. Focusing on eliminating your debt and setting up a retirement account today is a great way to start handling your personal finances.