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How to Effectively Educate Baby Boomers to Prepare for Retirement

By Liz Davidson, founder and CEO of Financial Finesse.

More and more employers are grappling with how to help the Baby Boomer generation address the gap between what they have saved and what they will need to save to comfortably retire.

It is a challenging problem. The youngest baby boomers are 47 now, and the oldest are right at the normal retirement age of 65. This group came of age expecting to retire with generous traditional pension plans like most of their parents did, and consequently, many never fully adjusted to the idea that they will be responsible for funding and investing the vast majority of their retirement nest egg themselves. Even those that did adjust became used to a good economy for most of their working careers, and had no contingency plan going into the Great Recession.

Employers are aware of the problem, but many build their education plans off common myths about the Baby Boomer generation and end up with programs that don't address the problem, and in some cases, may even worsen it.



Baby Boomers who haven't saved enough are a "lost cause" because they don't have enough time to build sufficient retirement savings at this point.

Consequently, plan sponsors should focus all their energies on the younger generations who still have time to make changes to their savings strategies.

This is a dangerous assumption to make because every employee's "gap" between what they have saved and what they need to save is different. Some of your Baby Boomers are far behind. Others are quite close and need to simply do some fine tuning.

In addition, there are more alternatives than you might think for Baby Boomers who have a significant gap. The impact of savings is limited for older baby boomers but there are still things they can do to plan. Relocating to a cheaper area and downsizing their homes can help them stretch their retirement savings. Also, delaying retirement by a couple of years can often have a big impact, especially if they or their spouse have a traditional pension plan. For every year they delay, they have the opportunity to increase savings and reduce the amount of time that savings need to last.

In addition, younger members of this generation still have up to 18 years until they reach 65— which gives them significant time to close the gap by increasing savings.

Online education is not a good way to reach the Baby Boomer population as they aren't comfortable online

Baby Boomers who work in an office are using the Internet every day—and find it to be a great tool for research and information gathering. Online education is an excellent starting point for Baby Boomers, as a way to better inform themselves about key steps in retirement and financial planning. It is also by far the easiest, most cost-effective way to reach the most number of people, and to the extent you can offer education on a highly trafficked section of your company intranet, you will be able to consistently reinforce key learning points.

Online education will need to be supplemented with in person education because a computer can't motivate employees or empathize with them, but it should be part of whatever financial education you put together for Baby Boomers.

It's all about retirement with this age group.

Money management basics are still an issue for many Baby Boomers. The foundation of any financial plan is an adequate emergency fund and 45% of 45-54 year old and 27% of 55-65 year olds don't have one. Also, about one third of Boomers carry balances on their credit cards – draining valuable dollars that could be going towards savings and retirement.

Retirement Education is important but it also needs to be supplemented with basic money management workshops that include budgeting, funding an emergency fund, and debt reduction. These are vital for Baby Boomers who are facing retirement and need their income streams to last a lifetime.

Here's the reality: Financial education for Baby Boomers is really an all or nothing proposition. Offering limited education programs will often create more questions than answers. It may be a wakeup call for those not saving enough, but with no next steps to follow, you run the risk of increasing financial stress and resentment that the company's retirement benefits "aren't sufficient"-both very costly propositions.

If there is a single best practice to follow with this group, it is this:

Educating Baby Boomers is a process, not an event. There are emotional issues-such as learned helplessness and defeatism that require multiple interactions to overcome. There are also plenty of Baby Boomers that don't have a solid financial foundation and can't begin to increase their retirement savings or even think about more effective retirement planning strategies until they take care of more pressing problems. Financial progress takes time and ongoing support to help employees accept tough realities and commit to implementing better financial habits and strategies.

To say education doesn't work for Baby Boomers is akin to saying that eating healthy meals and exercising won't help you improve your health and control your weight. The problem is that a day, week, month or even a year of healthy living won't be enough to stay fit and healthy if you ultimately revert to old habits. Far too many employers put their employees through the financial equivalent of one workout session and then scratch their heads when the problem isn't fixed. Each generation has unique financial issues and understanding the myths versus the realities in how to effectively implement financial educate tailored to that generation can fix the problem.

This research has been compiled by Financial Finesse's Think Tank of CERTIFIED FINANCIAL PLANNER™ professionals, Trisha Brambley, a leading expert in this area and dozens of studies on Baby Boomers. For additional research and best practices on Baby Boomers and Financial Education, email AskFF@financialfinesse.com . Trisha Brambley can be reached at trishbrambley@gmail.com.

Financial Finesse was founded with a single mission: Provide people with the information they need to become financially independent and secure. Today, we are the leading provider of unbiased financial education for large companies and municipalities. Our financial education services are fully integrated programs designed to address the strategic goals of the organizations we service and are delivered by on-staff CERTIFIED FINANCIAL PLANNER™ professionals as an employee benefit. If you are interested in learning more about workplace financial education programs, contact one of our education consultants at AskFF@financialfinesse.com.

The Ask Financial Finesse Q&A service is designed to provide general information on trends and developments in workplace financial education programs and participant education strategies. Due to the complex nature of financial benefits and/or workplace financial issues, the information contained in this document is not to be construed as advice.


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