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AARP reports: “In 2011, the first of the baby boomers reached what used to be known as retirement age. And for the next 18 years, boomers will be turning 65 at a rate of about 8,000 a day… It will likely transform the institutions of aging — just as it has done to other aspects of American life.”“The baby boom generation—the roughly 76 million people born between 1946 and 1964—has been reshaping American society for decades,” states the Brookings Institute. “Now that the leading edge of the generation has turned 50, the impending collision between the boomers and the nation's retirement system is naturally catching the eye of policymakers and the boomers themselves.”
Price Waterhouse Cooper’s 2014 Employee Financial Wellness Survey, which tracks the financial wellbeing of U.S. employees nationwide, found some good news for boomers: “This year’s data suggests the gap between generations is growing when it comes to financial wellbeing, as key findings point to Baby Boomer and Gen X employees improving their financial health while Gen Y struggles to climb out of debt and to save for the long-term…”
“But the future is uncertain,” asserts Brookings. “Social Security faces a long-term imbalance. The solution… must in some way cut benefits or raise taxes. The private pension system has changed …—thus raising questions about how well future pensions can help finance retirement. Personal saving, also problematic, has remained anemic for over a decade. Net personal saving other than pensions has virtually disappeared… These developments would be enough to raise concern about retirement preparations under the best of circumstances.”
Michael H. Baker, CFP®, is a Charlotte-N.C.-based financial advisor who has the unique perspective of viewing retirement from the eyes of a Gen X advisor whose parents are members of the Boomer generation. “Many of the Boomers that come into the office have had very similar outcomes in working with financial professionals. They may have an investment portfolio, a pension, or own insurance policies, but they don’t have a comprehensive retirement plan. Some of them have not even explored their options or discussed a strategy for claiming social security. Boomers often own strategies acquired separately, piecemeal, and not designed to work together.
Brookings ponders whether the baby boomers are making adequate preparations for retirement.” “In part, the answer depends on what is meant by ‘adequate”… A rule of thumb often used by financial planners is that retirees should be able to meet this goal by replacing 60-80 percent of preretirement income…Taxes are lower because retirees escape payroll taxes and the income tax is progressive. And mortgages have, for the most part, been paid off. On the other hand, older households may face higher and more uncertain medical expenses, even though they are covered by Medicare.”
“The first part of the planning process is to work with clients in aligning their financial resources for retirement planning to their personal value system and priorities,” says Mr. Baker. “No one wants to live a long life and run out of money. Ensuring that never happens is the goal of this firm.”
People make “mistakes,” says acclaimed author Carl Richards in his New York Times best seller “The Behavior Gap, “but now it’s time to give oneself permission to review those mistakes, identify personal behavior gaps, and make a plan to avoid them in the future. The goal isn’t to make the ‘perfect’ decision about money every time, but to do the best one can and move forward. . . . Most of the time that’s enough.”
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Vertex Capital Advisors, LLC, is a comprehensive financial planning firm based on Charlotte, NC. Founder Michael H. Baker, CFP®, is a native South Carolinian, born and raised in Rock Hill. Michael works with people who want to build and secure a financial future for themselves and their families. Mr. Baker offers investment Advisory Services through AlphaStar Capital Management, LLC., a SEC Registered Investment Advisor. AlphaStar Capital Management, LLC and Vertex Capital Advisors, LLC are independent entities. Insurance products and services are offered through individually licensed and appointed agents in various jurisdictions. Vertex Capital Advisors, LLC does not offer legal or tax advice.
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Name: Michael H. Baker, CFP®
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Organization: Vertex Capital Advisors, LLC
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