Boomers on a Budget: Lowering Expectations

Unrealistic expectation. Boomers of any age , but especially those on the leading edge*, have some adjustments to make in the coming lean years. That's because we thought we had already given up one luxury: retirement at age 55. Regardless of the statistics that assure that not so many people actually retire at age 55, boomers grew up with that thought in mind. People could retire at 55. It was within the realm of possibility.

But it wasn't: For most Americans, very early retirement was not a possibility. Even if a neighbor was in that happy number, we saw that person (almost always a man) "double-dipping" in a second career while drawing retirement from the military or some other "lifer" commitment; clearly, he still wasn't retired. Most Americans could not really retire at 55. We accepted that. But the damage was done: we were exposed to an idea that now makes delayed retirement in our 60s a very unhappy prospect. Whatever we expected to happen in the next 5 to 10 years is probably now not possible. The financial crisis promises lean years ahead, and that's the optimistic view.

Lowering expectations: Boomers will be budgeting and probably delaying retirement—or some aspect of it. For example, the year to sell the family home and use the proceeds for a retirement community may need to be selected very carefully. Most retirees will need to wait for the market to recover before attempting a sale. Even then, the house may not bring the profit once anticipated. Can you start imagining a different retirement?

Live like a New Yorker: I'm thinking about Manhattan, where people routinely pare belongings to the minimum in order to fit into small and shared housing. Where public transportation is the norm and private car is the anomaly. Where high costs of everything drive ingenuity and resourcefulness. Well, that's where the rest of America will turn: budgeting with ingenuity and resourcefulness.

On a personal note: The irony is not lost on me: just a few months ago, Tom and I made the decision to not move to New York due to the housing market and the many trade-offs we would have to make. We were not prepared to live like New Yorkers. Now, we're getting prepared...but we'll be living it in Texas. — Lida

*Boomers on the leading edge versus trailing edge:
Leading Edge = birth years 1946 to 1954
Trailing edge = birth years 1955 to 1964

© 2008 Mary Bold, PhD, CFLE. The content of this blog or related web sites created by Mary Bold (www.marybold.com, www.boldproductions.com, College Intern Blog) is not under any circumstances to be regarded as professional, legal, financial, or medical advice. Or education advice. Or marital advice. Or even a tip.