Inside The Plan

Generational Investment Behavior: Baby Boomers

In today’s episode of the “Inside the Plan with the 401(k) Brothers”, host Bill Bush and Andy Bush, advisors at Horizon Financial Group, in their ‘Generations Series’, talk about the investment behaviors of ‘Baby Boomers’, the generation which includes the birth years 1946 to 1964.



Episode Highlights

·       01:30– In the US, the ‘Baby Boomer’ generation comprises about 70 million people.

·       03:35- Among the Baby Boomer generation, an EBRI survey found that 46% of this group reported accruing less than needed savings for retirement.

·       05:30- Some boomers have said that they're going to need to work longer to pay off debt, but the actual study show, that they don't work longer.

·       07:20- If you wait until full retirement, you're getting 100% of your Social Security benefit. If you wait after your full retirement, you're getting an 8% increase each year on top of whatever the cost of living adjustment might be.

·       08:54- One thing that becomes important is the distribution phase, as we go from the accumulation phase of working to retiring, and then it's how to manage the withdrawals, which can be a tricky situation.

·       11:15– As you grow older, instead of just on a whim of buying something, one needs to be a little more thoughtful of that by understanding what is the purpose of it.

·       13:30- If you're relying on dollars, you just don't want to have to sell when the market drops down.



Three Key Points

1.    Most ‘Baby Boomers’ generation is retired right now or about to face retirement. There are a good number that have already gone through retirement and they've maybe gone through their planning side of entering into retirement and then there are a bunch that are in that decade range till they check out for the last time at the workplace. As per the research Boomers carry an average household debt of alittle over $272,000. And the biggest part of that debt is likely going to be their house.

2.    Some people said that due to the pandemic they’ll just work longer and pay off that debt. But the reality is, that often doesn't happen. The other thing that they talk about is filing for social security, people usually make the mistake offiling early. Filing early kind of locks in lower pay. If you wait until your full retirement, which is 66-67.. or somewhere in between for the Boomers group. So if you wait until fullretirement, you're getting 100% of your Social Security benefit.

3.    Baby Boomers those that have not retired, for them the most important thing is that as you're getting much closer to retirement you need to establish a budget ify ou haven't. So that you understand what your spending habits are. Except for basic needs, make sure you know where your money's going.



Tweetable Quotes

·       “That was post-war that there was a boom in babies.” – Bill Bush

·       “May be some sort of debt that didn't exist the generation before.” - Bill Bush

·       “Percentage of people that say, “Hey, I'll just have to work longer and the percentage that does is much lower because they become ill.” – Andy Bush

·       “If you want more information about Social Security, we do have a webinar on the horizonfg website under Events, if you want to look into that a little more.” – Andy Bush

·       “As you mentioned retiring without debt is an ideal situation.” – Bill Bush

·       “You're going to have to probably be a little better at budgeting.” - Andy Bush

·       “They want to make sure that they're not exposing themselves to significant market drops of money that they're going to rely on” - Andy Bush


Resources Mentioned

·       Horizon Financial Group - Website

·       Contact Information: Bill Bush      Andy Bush

·       Podcast Editing

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