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Boomers Face Important Financial Decisions

Posted by: Lisa Nichols | Mar 13,2008

Boomers will face a number of important financial decisions in the coming years. The generation of people born from 1946 through 1964 makes up the largest generation in American history, and they hold a great amount of spending power. For the first time, a sweeping number of Boomers are faced with a number of unique financial situations including a rapidly approaching retirement age and grappling with the impacts of financial aid on the middle class. The resulting reduced income, bills and debts mean Boomers have a number of important financial decisions to make in the coming years.

 

Boomers Crave Early Retirement, but Will it Pay Off in the Long Run?

 

Boomers are looking to retire early, reports USA TODAY. According to reports, half of people approaching the early retirement age plan to retire at age 62. By taking early retirement, the Boomers open themselves up to financial woes including reduced Social Security benefits and large tax penalties on retirement plans. There’s also a very real risk that these Boomers will outlive their retirement funds. Although early retirement holds a lot of appeal, it’s important to weigh the risks. Experts recommend that Boomers meet with a financial advisor to talk about long-term expenses before they make the decision to retire early.

 

Middle Class Boomers Impacted by Financial Aid Programs

 

Ivy League schools continue to be out of reach for most of the middle class Boomers’ kids. Financial aid for college students ignores a lot of the expenses associated with the middle class, including mortgages, debts and retirement plans, complain Boomers. Financial aid programs have been criticized for basing their offers on how much a family “could” afford to pay, not how much they are able to pay for their kids’ college tuition without going into too much debt. In the December 2007 issue of the Harvard University Gazette, Harvard announced that they have stepped up to make school more affordable, stating that families only have to pay 10% of their total income if its between $120,000 and 180,000. It’s a step in the right direction, but a lot of Boomers still worry about how they will pay for their kids’ college. Coupled with early retirement concerns, America’s most influential generation may be facing some serious financial woes in the next couple of decades.

 

Learn more about Baby Boomers and get helpful tips on finances, retirement planning and navigating financial aid for the middle class in the Baby Boomers blog.

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