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When it comes to financial security in retirement, younger Baby Boomers are expected to face far more challenges than their older counterparts.

You can thank various factors for the difference. They include:

  1. The decline of employee-sponsored pension plans. A study from the Center for Retirement Research at Boston College found that from 1975 to today, the number of workers with defined benefit plans fell from 88% to 33%. Most Leading-Edge Boomers, which refers to those born 19466-1965, enjoy a level of financial security for their retirement from their employers that younger boomers, also known as Trailing-Edge Baby Boomers, do not. Instead, younger Boomers have employee-sponsored defined contribution retirement plans, if any at all. Those type of plans put the burden of saving and investing on the employee.
  2. Changes to Social Security eligibility dates. Anyone born in 1960 or later must wait till age 67 to get full benefits. But those born 1946-1954 can start at age 66. And with the Social Security fund expected to be depleted by 2034, younger Boomers can expect their benefits to be limited even past full retirement age.
  3. College tuition for children. Younger Boomers face far higher tuitions for their children’s education than older Boomers did. And despite a growing economy, wage stagnation has resulted in many Millennials dependent on their parents’ financial support for several years after graduation. Many younger boomers are already behind in retirement savings and have little or no employer safety net; now they must also decide how to stretch their limited dollars to help their children.
  4. Modern medicine and longevity. According to Pew Research Center, 71% of Boomers have at least one living parent. Many stop working to take on caretaking roles, while others provide financial support for an aging parent. Meanwhile, they are missing out on growing their own retirement savings. Instead, they are squeezed between helping support their parents and their children at the same time. Even more, their own lifespans have dramatically improved, underscoring the need to build their own nest eggs to cover themselves for the long haul.

While sobering and discouraging, younger Baby Boomers can offset these hurdles by planning ahead and addressing their financial needs early on. Some important questions they should consider:

  1. How much to pay for children’s education. Students today have many options to attain higher education. In choosing a university, families should consider the cost of private school tuition versus state schools. Also, loans, grants and other programs are available to pay for college. But, as the saying goes, no one is going to finance your retirement. Hence, parents should discuss their finances with their college-bound children and determine the wisest decision for themselves when deciding on their children’s college. They should also decide how much of their children’s tuition they can afford without forgoing saving for retirement.
  2. Delaying retirement. With lifespans increasing and health of older Americans improving, it is not unrealistic to plan to work more years. And it provides extra years to build up savings and to enable existing investments to grow.
  3. Meeting with a financial planner regularly. Annual financial check-ups promote stable portfolios, establish budgets, and adjust investments.

At Silverman Financial, we recognize the obstacles that many of our clients’ face. As financial planning experts, we provide complimentary initial consultations and ongoing follow-up meetings to help our clients achieve financial security in retirement.