In this article, we’ll show you 12 great money moves baby boomers will make during retirement. If you would like to skip a detailed analysis of baby boomer wealth and retirement, please visit: 5 Amazing Money Moves Baby Boomers Are Making After Retirement.
About baby boomer wealth and retirement
Baby boomers are the wealthiest generation on earth.according to luck, Their net worth is between $970,000 and $1.2 million. As of 2022, this generation will have a total of $78.1 With total assets of $1 trillion, it accounts for a significant share of the total wealth in the United States, accounting for 50%. The enormous wealth accumulated by this generational group is poised for large-scale transfers in the coming years.Allegedly estimated $53 Trillion Wealth will be transferred from the baby boomer generation.accounting for 63% of all intergenerational wealth transfers.
As wealth transfers await, this generation is enjoying their golden years and making the most of them. Back in May 2023, internal data from Bank of America Corporation (NYSE:BAC) showed a widening gap in the spending habits of working-age adults and retirees. Data shows that baby boomers are spending more than younger generations, with particular focus on spending on hotels and travel.
“Part of the recovery in travel and broader leisure services may be a kind of breather, as they splurge and make money on things they weren’t able to do during the pandemic.”
– David Tinsley, senior economist at Bank of America Corporation (NYSE:BAC) Research Institute.
In addition to making up for time lost during the pandemic, seniors are also making the most of their COLAs, the highest since 1981. luck points out that many of today’s seniors are currently enjoying financial prosperity, with high interest rates contributing to the growth of their accounts. Therefore, now is the perfect time to invest fully in senior stocks.
“Millennials are really feeling the impact of the hiking cycle. Baby boomers less so.”
– Oson Kwon, BofA Quantitative Strategist.
Bank of America Corporation (NYSE:BAC) owns American Express Company (NYSE:AXP), Toll Brothers Company (NYSE:TOL), Welltower Corporation (NYSE:WELL), Service Corporation International ( I’m paying attention to stocks such as NYSE:AXP). SCI) will gain attention as boomers continue to spend on health care, entertainment, and home improvements. This generation accounts for 33% of American Express Company (NYSE:AXP)’s total card payments, so this could be a good time to grab the company’s stock. American Express Company (NYSE: AXP) is also known for specializing in entertainment and travel, two of his key spending categories for seniors.
Additionally, Toll Brothers, Inc. (NYSE:TOL), a construction company that specializes in luxury homes, is another boomer stock to buy among affluent seniors. Baby boomers often help their children buy their first homes, and since they dominate the housing market, Toll Brothers (NYSE:TOL) is another buy.
Scott Barlow, market strategist at globe and email, These demographic trends move slowly, so there’s no need for investors to rush. If a stock starts to rise, or if market volatility causes it to become heavily discounted, it may be a good time to add the stock to your portfolio.
on the other hand, Transamerica Retirement Research Center Please note that. Median retirement savings for baby boomers is $202,000. Based on this diagram, average retirement income That’s $8,000 a year for them. These numbers mean that even though baby boomers have amassed the most wealth, there are still many people who don’t have enough savings and need to think about smart moves to supplement their retirement income. It suggests something.
Overall, baby boomers are earning some income Great money move after retirement That’s stepping up their game. Let’s check out these movements.
An elderly couple consults a financial advisor about investing for their retirement.
methodology
To edit the list 12 brilliant money moves baby boomers make after retirement, we used forums like Reddit and Quora to analyze what this generation is doing to earn and save more money for retirement. A consensus approach was used to rank the proposed moves, and each time it was recommended by a boomer he was given one point in its place.
The scores were summed and ranked in ascending order from lowest to highest score.
here it is 12 Amazing Money Moves Baby Boomers Will Make After Retirement:
12. Social security delays
Insider Monkey Score: 10
This is easy. Delaying Social Security until full retirement age allows retirees to claim their full benefits.by Social Security Administration, Social Security retirement benefits increase by a percentage each time an individual delays starting benefits beyond full retirement age. This benefit increase stops when you reach age 70. An individual who decides to claim benefits early, such as a 62-year-old, can only claim her 70% of the scheduled benefits. Those who decide to wait until the age of 67 will receive the amount to which they are officially entitled, and those who wait until the age of 70 will receive their 124% of the main insured amount.
“…people are living longer today, and for couples, the benefits of higher incomes continue throughout the lives of both individuals. In humans, it’s much higher than 50%.”
-Wade Pfau, respected retirement researcher and author of The Retirement Planning Guidebook.
11. Senior discount
Insider Monkey Score: 12
Requesting a senior discount can potentially save individuals hundreds of dollars. Many companies offer senior discounts for people over the age of 55. Kohl’s offers a senior citizen discount every Wednesday, giving him 15% off in-store purchases. At Ross, seniors 55 and older can get her 10% discount on clothing and home decor every Tuesday.
Other businesses that offer senior discounts include restaurants like Denny’s and IHOP, grocery stores like Kroger, and hotels like Marriott and Hilton. It’s best to check the official page or contact the company directly to ask if they offer a senior discount.
10. Performing a Roth conversion
Insider Monkey Score: 13
One Amazing money transfers that baby boomers are making after retirement Performing a Roth conversion. Roth conversion is a tax planning technique that gives seniors more control over their taxable income. Roth IRAs are funded with after-tax dollars, so withdrawals are tax-free. The annual contribution limit to a Roth IRA is $6,500 in 2023. According to Charles Schwab Corporation (NYSE:SCHW), there are four cases where it makes sense to convert to a Roth account.
First, if an individual believes that their taxes will be higher in retirement. In this case, it makes more sense to pay the tax at the current rate than to pay it later. The second is when a senior citizen wants to maximize their estate for their heirs and does not need to use the IRA funds during their lifetime. Third, most of their assets are in tax-deferred accounts. Converting to a Roth allows you to better manage your taxes. Finally, they have low incomes and irregular sources of income.
9. Consultation with a financial advisor
Insider Monkey Score: 15
According to Northwestern Mutual’s 2022 Plans and Progress Survey. 35% of Americans seek help from a financial advisor. However, the survey also found that more people are recognizing the value of financial support, with 62% of them believing they need financial improvement.
“Despite the fact that too many Americans remain without financial support, the number of people seeking professional advice has skyrocketed in the last year, and the numbers have not returned to pre-pandemic levels. It will remain stable in 2022.”
– Tim Gerend, Executive Vice President and Chief Sales Officer, Northwestern Mutual
With the help of a financial advisor, seniors can maximize tax efficiency, make better asset allocations, optimize Social Security, process withdrawals, and even help rebalance their portfolios.
8. Tap on HSA account
Insider Monkey Score: 16
More and more people in the United States are struggling to pay their medical bills. According to a Gallup poll, 38% of Americans say they or a family member has delayed treatment for financial reasons.However, one A spectacular transfer of funds by the baby boomer generation has been working with employers to create tax-advantaged health accounts for many years.
Flexible savings accounts (FSAs) and health savings accounts (HSAs) are used by baby boomers to pay for medical expenses and Medicare premiums. These accounts help individuals protect their retirement savings by allowing them to pay for medical expenses instead of withdrawing from their retirement accounts. Notably, HSA accounts can be used to withdraw funds for any reason without penalty after age 65.
7. Real estate investment
Insider Monkey Score: 19
Not only are baby boomers extremely wealthy, they are also the largest generation of homebuyers today.by National Association of Realtors (NAR), this demographic is 39They make up the largest proportion of all home buyers among all generations. Investing in real estate provides baby boomers with an additional source of income during retirement. Rental properties in particular offer several tax benefits to seniors, including property taxes, mortgage interest, and even depreciation.
Another recent report NAR Today’s older buyers say they are in a better position to buy a home in the current market. The audience is sending a signal toward an easing of the housing market that baby boomers can take advantage of. If you buy real estate now, you can build even more wealth the next time prices rise.of 82 trillion dollars Almost a quarter of the nest eggs baby boomers have built up over the years are built this way.
6. Get a part-time job
Insider Monkey Score: 21
Working part time is different Smart money moves baby boomers are making after retirement. T. Rowe Price claims that due to longer life expectancies and rising costs of living, 20% of retirees continue to work part-time. 7% are looking for work for money or other reasons. However, there is still a surplus of 1.98 million retirees, posing a potential problem for the economy.
If someone is able to return to work or work part-time, seniors not only help themselves, but the economy as well.
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Disclosure: None. 12 Amazing Money Moves Baby Boomers Will Make After Retirement Originally published on Insider Monkey.