The oldest members of the baby boomer generation are turning 80 this year, and it's a crucial time to make some important financial moves. Aging gracefully is not just about physical health; it's also about financial wellness and protecting your legacy.
As you reach this milestone, your focus shifts from accumulating wealth to preserving it for yourself and future generations. It's a delicate balance, but with the right strategies, you can ensure a comfortable and secure retirement.
Here are four essential money moves for baby boomers turning 80:
Revisit Your Estate Plan:
- Plans change, and so do circumstances. At 80, it's time to update your estate and legal documents, such as wills and trusts. Ensure your wishes are clearly outlined and up-to-date.
- If you haven't already, consider using services like LegalZoom or Quicken WillMaker & Trust to create these essential documents. They offer user-friendly platforms and guidance to help you through the process.
Protect Yourself from Scammers:
- Elder fraud is a serious issue, costing seniors billions each year. Take proactive measures to safeguard your finances.
- Set up transaction alerts on your bank and credit accounts to stay informed about any suspicious activity.
- Consider freezing your credit through the credit bureaus if you don't plan on taking out loans soon. This adds an extra layer of protection.
- Sign up for an identity theft protection service that can monitor your personal information and freeze/unfreeze your credit as needed.
Keep Cash Accessible:
- As you age, simplicity becomes key. Keep your cash in safe and liquid accounts, such as high-yield savings or money market accounts. This ensures easy access and peace of mind.
- Share the details of these accounts with your family, so they can assist if needed.
- Remember, savings are crucial for all generations, especially with rising retirement expenses like healthcare.
Feel Confident About Spending:
- Turning 80 is a time to enjoy life and spend on experiences that bring joy. It's a trend known as "SKI" (Spending the Kids' Inheritance), where boomers focus on indulging themselves rather than leaving everything to their heirs.
- With increased life expectancy and rising costs, boomers see this as a reward for their financial discipline over the years.
- Connolly suggests that this approach is not just indulgent but strategic. A "strategic spend-down" can improve your quality of life, reduce future tax burdens, and prevent income from pushing into higher tax brackets.
- If you're unsure about your spending, consult a financial professional for personalized advice.
And here's where it gets controversial... Should boomers prioritize their own enjoyment or leave a substantial inheritance for their children? It's a question that sparks debate. What do you think? Share your thoughts in the comments and let's discuss the pros and cons of this approach to retirement spending.
