Good Morning DINKS. We are all working towards are our individual and couples financial goals. Our financial goals may include buying a home, helping out our parents during their retirement, or saving for our own retirement. It is very important for couples to start saving now for our retirement because we don’t want to be working forever.
Over the last few years as I have helped the baby boomer generation retire, I am noticing a trend amongst the older generation ( actually I am noticing the lack of a trend). Many baby boomer clients who are preparing for retirement do not have a lot of personal retirement savings. Many baby boomer clients are planning for retirement at the age of 60 or 65 because they are at the “normal” retirement age. Our parents may be emotionally prepared to retire, but they may not be financially prepared.
The retirement savings mentality during our parent’s working days was a little bit different than our mentality today. Saving for our retirement in a 401k or a Roth IRA was not as much of a priority back then as it is now. The main source of our parents aka the baby boomers retirement income is coming from their employer pension plan. It was very common for our parents to find a job right after high school and remain employed with the same company until retirement. After 30 or 35 years of working with the same employer the accumulated value of an employer pension plan can definitely add up.
Nowadays it is very uncommon for someone to start and end their career with the same employer. How many full time employers have you worked for up to this point in your career? Since my university graduation I have personally worked for 4 employers, but I don’t count 2 of them because I was employed for less than a year.
The concept of relying on someone else (aka our employer) for the financial sustainability of our retirement is a concept that I don’t fully grasp. Of course when we are planning for retirement we rely on a variety of income sources to make up our retirement income such as old age security, accumulated assets, our employer pension plan, as well as our own personal retirement savings. When we save in a personal retirement savings account we are ensuring a financially stable retirement.
During retirement DINKS can once again become a dual income no kids couple, but this time the dual income is a retirement income. Retirement is supposed to be the ultimate financial goal; after all we work our entire lives in order to retire. Sometimes our retirement income is enough to sustain our pre retirement lifestyle, sometimes our retirement income is almost enough to maintain our desired lifestyle, and sometimes our retirement savings are just not enough to maintain our lifestyle.
If our retirement income is not enough to maintain our desired lifestyle, we will be forced to make some financial decisions. At this point we have to decide if we are going to supplement our income (by continuing to work) in order to maintain our desired lifestyle, or if we are going to sacrifice our quality of life and accept the fact that we are going to have to live on less of an income than originally planned.
Photo by stevendepolo