3 Tech Tips to Help Baby Boomers Prepare for Retirement

People need to start harnessing a range of different technologies to help them to be more proactive in their saving.

This article was written by Daniel Schwartz, Managing Director of Moven

Daniel Schwartz
Daniel Schwartz

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For a millennial struggling to make ends meet in a challenging economic environment, it would be easy to look to their parents’ generation with green eyed envy. After all, the majority of America’s 75 million baby boomers have reached a level of relative comfort after decades in the world of work. They own property, have accumulated wealth and belongings, control roughly 70 percent of all disposable income in the U.S. and are set to inherit about $15 trillion dollars over the next 20 years.

However, while millennials are within their rights to feel hard done by, many overlook the fact that baby boomers’ working days are quickly coming to an end, and the majority of this generation are not prepared financially for retirement. Baby boomers are aged between 52 and 70, which means some will already be eligible to retire and others have less than 15 years left working. Recent surveys reveal that only 24% of boomers express confidence that they have saved enough resources for their retirements.

New fintech companies regularly target ‘tech savvy’ millennials, but overlook the fact that the majority of boomers — who include Bill Gates and Steve Wozniak in their midst– are quick to adopt new technology too.

So how can boomers take steps now to prepare themselves for life after the world of work?

Make a plan

Retirement planning involves much more than just crunching numbers based on current salary, outgoings, and predictions for pensions and savings. It also involves external factors such as where you will spend your retirement and what you plan to do during your golden years.

If you plan to relocate to a cabin in the woods and fish and hunt daily, your outgoings will be drastically different than if you have your eyes set on the luxurious country clubs and golf courses of Key West.

No one likes nasty surprises, so when making a financial plan it is important to be realistic about how much you need to save, and the return you can expect on your current assets –while taking market volatility into account.

U.S. wide retirement organization AARP has created an online calculator which offers a snapshot of your financial future based on your current situation, assets and plans for the future. In a recent Forbes article, Rob Berger highlights Personal Capital’s Retirement Planner, Fidelity myPlan Snapshot, Flexible Retirement Planner, The Ultimate Retirement Calculator and Vanguard Retirement Nest Egg Calculator as the best apps and website based tools available on the market right now.

Once you have made a plan of how much you need to save each month, stick to it like a life or death matter. It is always easy to make little excuses for overspends, but if this becomes a habit then all of your time planning will have been wasted.

Monitor spending

Boomers use apps and technology to actually gauge their spending, monitor accounts, pay bills and keep track of outgoings much less than millennials — 44% compared to 72% – and considering that baby boomers spend a lot more than younger generations, driving more than 35% of all discretionary spend, this seems misguided.

A recent study by Gallup Daily suggests that the daily spending among boomers has been increasing since bottoming out when the great recession hit in 2009, reaching a 5 year high of $105 per day in 2015.

No one wants to live their life constantly hesitating at checkouts thinking ‘can I buy this?’ or ‘should I spend that?’. Rather than turning spending into a negative behavior, it is more efficient to harness technology to highlight spending trends in your day-to-day life, so you can make informed decisions as to what needs to be cut and not.

There are a range of free and reasonably priced spend tracker apps for iOS and Android which can help you decide whether you need to downgrade your three daily trips to Starbucks for the office coffee machine, how much you are spending each month on direct debit payments and which subscriptions could be cut, or whether eating out has stopped being a treat and started being an everyday occurrence.

More than half of boomers consider eating out as their main money drain. Everyone deserves to enjoy life’s little luxuries occasionally, but sometimes seeing your outgoings visually represented in comparison to your incomings, it can give us a nudge in the right direction.

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Cut back on expensive extras 

According to a study by Key Retirement, boomers are releasing record amounts of cash from their homes to spend on luxuries like cars and holidays, with nearly $1 billion being withdrawn from properties using equity release plans in the first six months of 2015 alone.

According to recent travel trends, many boomers increasingly view travel and holidays as a necessity rather than a luxury. For those in their fifties and sixties an overriding sentiment is ‘enjoy it while you can’. According to AARP, baby boomers spend $120 billion a year on leisure travel and a 2014 report of more than 1,000 AARP’s members highlighted that the average boomer will make about four to five trips in a year.

For most boomers, their children have finally flown the coop, and the temptation to go on a hiking holiday rather than dragging a group of kids round Disneyland might be too strong to resist, but it is important to stick within your limits.

Whether it be for holidays, accommodation or clothes, boomers need to take advantage of price comparison platforms more. A recent study found that only 42% of boomers find comparison websites important compared to 57% of Millennials.

Try Skypicker, Skyscanner or Google Flights to find the best travel deals out there, and consider taking holidays on off-season, non-peak times of year. There is less chance of loud school holiday groups, and you will be able to save a pretty penny in the long run.

Considering how few boomers feel prepared for retirement, it is surprising that more banks and companies specifically targeting this group while they still have some time left in the workforce. There is no silver bullet for the boomer saving problem, but people need to start harnessing a range of different technologies to help them to be more proactive in their saving.

As at the end of the day,  if millennial earning and saving trends are anything to go by, the tradition of kids looking after their parents in their golden years is looking like a less and less reliable fallback plan.

 

 

 

 

 

 

 

 

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