Hey guys, this is a guest post by Carly who wanted to talk about her experience writing for a baby boomer/ retirement magazine and what it taught her about personal finance.
We see stories in the news every day about how the Baby Boomer wave is hitting retirement age, and many are finding themselves caught unprepared. But why? The BMO Retirement Institute reports boomers over the age of 55 are not serious about planning for retirement. Only 54 per cent of those surveyed have ever tried calculating a financial goal for retirement; less than half (45 per cent) have consulted with a financial planner; and 43 per cent do not consider themselves knowledgeable about making financial investments, according to the report.
If that’s not enough to convince a 20-something to set up a retirement savings plan, I don’t know what is. However, not all of the Generation-Y pack care to acknowledge the financial crisis currently striking down on those more than twice our age. We’re still a long way from 65, the standard age for retirement. This makes it difficult for certain individuals to make the connection, and to start taking retirement seriously as early as their 20s. We’re too busy settling into our careers, searching for life-long partners,
paying off student debt and saving to buy our first homes.
A recent article in The Globe and Mail (editor's input: by none other than Preet Banjeree!) reads, “With borrowing up and savings rates down, many Canadians are spending all they make now. And if that wasn’t bad enough, some are also borrowing from future earnings. Canadian debt-to-income levels hit an all-time high this year. That means some people are on track to spend every dollar they will ever earn in their lifetime before they even retire.”
In other words, we’re headed for an even rougher path than our elders.
The article goes on to explain recent findings published in the Journal of Marketing Research, where authors discovered that if subjects were presented with an image showing an aged version of themselves, they were more likely to put an imaginary grant of $1,000 into a retirement fund than those who were not offered the image. This suggests in order for us youngsters to take seriously our plans for retirement, we need to be able to make some sort of connection to our future, gray-haired selves.
After reading this myself, it was like a light bulb went off. I am a prime example of this suggestion. All this time, I have credited the positive turn in my financial habits to the swift slap of the real world, which occurred abruptly after graduating from university with a total of $28,000 in student loan debt.
But it was more than that.
In November of 2010, about 7 months after graduating (and just after my lovely 6 month OSAP “grace period” came to an end), I scooped up the opportunity to do some freelance writing for Zoomer. For those who are unfamiliar with the magazine, it's a Canadian lifestyle publication for the 45 plus demographic (boomers with “zip”—hence the Zoomer title).
Over the last year I have been putting myself in the shoes of the Baby Boomer, as I write stories for this audience covering a wide-range of topics, including finance. I quickly became aware of all the financial struggles suffered by this generation, especially in terms of retirement woes. And as I did my research and followed along with the publication, I was studying all of the financial advice offered to the boomers and using it to shape my own ways. It wasn’t until I saw the story in The Globe and Mail that I realized this. I had made the connection the study discusses—I can imagine my life at age 65 because I do it every day as part of my job.
So I guess I have the Baby Boomers to thank for motivating me to make long term financial goals. In a sense, it’s about learning from their mistakes—I refuse to become part of the 54 per cent. Of course, not all of the financial advice offered to the 45 plus demographic is going to apply to someone my age. And you won’t find any tips in Zoomer about paying off your student loans or becoming a first-time home buyer (fortunately, we have PF blogs like Young and Thrifty for that).
Still, the overall message is relative:
retirement is something to look forward to rather than fear.
And the best way for that to happen is to
start planning now.
BIO: Charlotte Bumstead is a freelance writer and blogger, covering a wide-range of topics, including:
health, entertainment, technology and finance. You can find her blog and portfolio on her website or
follow her on Twitter @c_bumstead .