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.
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 email@example.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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