BakerAvenue Financial Feminism Master Series

Baby Boomers (1946-1964)

Baby Boomer women have experienced a lot during their lifetimes: the savings and loan crisis, the oil and energy crisis, and the Vietnam War. Now that you are transitioning towards retirement, probably focused on ensuring that you don’t outlive your money, being prepared for unexpected medical care, helping your children and grandchildren in the future, and other key issues

Typically, financial priorities include diversifying assets and buffering against market volatility. With wise financial management practices in place, you can take on your next phase of life and legacy with confidence.

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Investing | Life Planning

The Top Three Issues for My Financial Future

Preservation of capital: We meet every six months with our financial advisor to review / adjust our portfolio based on balancing age-appropriate risk and risk mitigation. In addition, he updates Monte Carlo-type simulations for different scenarios over the next several years. We are cautious about relying on projections because they don’t reflect potential downturns and bear markets. However, the scenarios give us an overview of where we are now – and where we might be if we take more withdrawals as we age. We paid off our mortgage years ago, plus annually invested the maximum amount permitted in our 401(k)s, which were typically matched by our employers’ contributions. We believe our investments are sufficiently diversified to weather the inevitable market self-corrections.
Heath issues and long-term care: We are currently fairly healthy but have some issues that require regular attention. We are very mindful about staying as mentally and physically fit as possible. We volunteer for a number of organizations in our community, eat healthy food, exercise daily, and get regular medical and dental check-ups. We have Medicare Advantage health insurance, plus we’ve had a long-term care policy for many years, so it is still affordable. Not surprisingly, we have both had expensive dental work recently (replacing old crowns, dental implants, root canals, etc.), most of which is not covered by insurance.
Helping our children: We paid for our two children’s educations, so neither has any college debt. We help one son financially as he finishes getting clinical hours for a Marriage & Family Therapy license, and the other son and daughter-in-law are self-supporting. We plan to help our children when they’re ready to purchase homes (they will likely leave California due to the very high cost of real estate). We’ve talked to them about investing early, particularly in 401(k)s, gifted them some money to start investing, and had them meet with our advisor. In addition, we’ve provided the contact information for our living trust (trustees, CPA, advisor, and trust attorney).

What We Would Do Differently: Looking back, we wish we’d engaged a financial advisor much earlier rather than buying and selling individual stocks through a conventional stockbroker.

Overview of What to Consider

In Your 50s to 60s...

If you haven’t already, now is the time to set an approximate retirement date. As you do so, you’ll want to start accelerating your retirement savings by upping your contribution levels and taking advantage of catch-up contributions. Prioritizing debt-reduction as possible as you approach your target retirement date will be critical in avoiding unnecessary stress in the future.

Plan an approximate retirement date

Accelerate retirement savings

Reduce your debts

Create a trust and / or will for your heirs

In Your 60s to 70s...

You may be well on your way to retirement, if you aren’t already there. When it comes to retirement, two of the most important responsibilities are signing up for Social Security and Medicare. Depending on your life circumstances, financial goals, and income needs, you should sign up for Social Security between the ages of 62 and 70. For Medicare, in order to avoid future penalties, be sure to sign up by age 65.

Protecting against fraud

Legacy

Pass on to future generations or beneficiaries. The goal is to protect the purchasing power of the underlying assets, but not necessarily to produce the highest return possible.

Growth equities
Real estate
Bonds
Natural resources / commodities
Absolute return strategies

Lifestyle

Produce disposable income and growth to protect purchasing power. These assets have moderate risk and return goals.

Dividend-paying stocks
High-quality stocks
Taxable / municipal bonds
Income-producing real estate

Growth

A portfolio mix to maximize returns, often with much higher risk tolerance and volatility, that could have higher turnover and less tax efficiency.

Momentum and growth stocks
Emerging markets
Alternative investments: Private equity, venture capital

ESG / Impact

10 years ago, even five years ago, conversations about impact investing would start with financial advisors asking clients, "Is this something you're interested in?" Today, it’s the clients proactively asking how they can back companies committed to best practices for environmental impacts, social responsibility, and corporate governance issues.

👉 Read more on:

How investors are aligning their money with their values
View our white paper on how to get started with impact investing

Life Planning

Charitable Remainder Trust (CRT)

With a CRT, an investor contributes highly appreciated securities to a CRT, sells highly appreciated stock without capital gains tax and receives an annuity income stream over her lifetime.

👉 Learn more about Charitable Remainder Trusts

👉 Read the top 10 reasons for a CRT

Philanthropy

When life gives you a worthy cause, consider giving back.

👉 Learn about how you can leave your legacy and get started with philanthropy

👉 What Issues Should I Consider When Establishing My Charitable Giving Strategy?

Tax & Estate Planning

👉 Understand the importance of considering all the Estate and Gift Tax planning options

👉 View tips to ensure your legacy lasts for lifetimes

👉 View a directory of commonly used Tax Terms

Other Considerations

Tax laws change frequently, and these changes have potential impacts on your investments.

👉 Visit our Tax Planning resources and see what's new on the Tax Front.

Caring for your aging parents:

👉 What Issues Should I Consider for My Aging Parents?

👉 What Issues Should I Consider If My Parent Passed Away?

Given the current state, it's also important to factor in inflation as you navigate later life

👉 Here are some issues to consider during times of high inflation

How to Choose the Right Type of Advisory Firm

There are many different descriptions within the financial services industry for financial management companies, including asset management, wealth management, and family office services. So when choosing an advisor, it’s key to understand the differences between these terms and the capabilities that different types of managers offer. View this video or read more on choosing a financial advisory firm.

👉 Also, read commonly asked questions on the differences in wealth and financial advisory firms.