BMO Wealth Management Report: Survey of American Baby Boomers Underscores Need for Effective Retirement Planning

PR Newswire

New BMO survey shows that Americans' top concerns about living a long life include health problems and costs, becoming a burden on family, and maintaining financial security
Far more aging Americans would most like to be remembered for the values they've lived by and the life lessons they've imparted than for the wealth they accumulated
A higher life expectancy rate makes retirement and estate planning essential

BMO Wealth Management (CNW Group/BMO Harris Bank)

CHICAGO, Oct. 29, 2018 /PRNewswire/ - BMO Wealth Management (U.S.) today released a report revealing Americans' views on aging and exploring their top concerns tied to family and wealth. The report, The Aging Economy: Improving with Age, is based on a survey of more than 500 Americans aged 55 and older and highlights the benefits of a comprehensive wealth plan to help mitigate the worries that many seniors encounter throughout retirement.

Increased life expectancy among Americans – which currently stands at 76 years for men and 81 for women – has extended the average retirement period to 18 years. As a result, many boomers are remaining in the workforce longer in order to grow their retirement nest egg, meet retirement and estate planning goals, and stay active. They're also thinking more than ever before about how to ensure they will live a comfortable life now and in the future.

Key survey findings show:

Boomers' top concerns about a lengthy retirement are healthcare costs and quality of life (46 percent), being a burden on family members (45 percent), and running out of money during retirement (44 percent).
Spouses and partners often have different opinions about long-term financial goals. The discrepancy cited most frequently among couples was when and how much to save for the future (28 percent), followed by retirement goals (27 percent), and how personal assets and possessions should be distributed to heirs (25 percent).
Respondents identified their most significant investment and retirement issues as a desire to maximize retirement income (22 percent), fear of outliving their savings in retirement (21 percent), and the impact of long-term care costs on personal finances (19 percent).

"While Americans are fortunate to be living longer, extended retirement brings additional costs and challenges," said Tania Slade, National Head of Wealth Planning, BMO Wealth Management (U.S.). "It's crucial that people approaching retirement work closely with financial planners, spouses, and family members to come up with a viable, long-term strategy that supports them throughout their elder years and enables them to leave the legacy they desire."

BMO offers the following tips to help alleviate common concerns during retirement:

Make sure your financial plan is up to date: Living longer means planning to 100. If your financial plan is based on average life expectancy rates, you may be underestimating your needs. The older you get, the more likely it is that you will outlive the average.
Make sure your written estate documents are up to date: They should match your current objectives, provide for unforeseen contingencies, and be flexible enough to withstand potential tax and law changes. If this is not true, an update is warranted.
Consider your working years' "after-life": You may need to work longer to provide for living longer and to meet the needs of your anticipated lifestyle. Even if you would just like to keep active, having a strategy can help you prepare for a smooth transition.
Know your personal and family medical history and the effects it could have on retirement spending: Medical costs represent some of the biggest expenses people encounter after retirement. Be sure you fully understand what the transition from a privately funded, employer-sponsored health plan to something else (i.e., Medicare) is likely to entail, including additional out-of-pocket expenses.
Keep your investment policy statement up to date: As your reliance on your invested assets increases with age, your risk tolerance will likely change as well. Ensure that your investments are managed in line with your changed investment risk and that your wealth manager understands and acts accordingly.
Have end-of-life discussions with your spouse, family and/or support network: Spouses need to reach consensus regarding lifestyle, finances, and estate planning. Meanwhile, informing family members and supporters of your wishes now (and changes going forward) will ensure that your desires are followed and they won't need to guess in trying times.
Consult professionals: Just as you consult with doctors and dentists to care for your physical health, you should engage with attorneys, accountants, and wealth advisors to ensure your financial health and help you navigate the legal, tax, and investment complications of living longer.

To view a copy of the full report, which includes additional survey findings and financial tips, please visit: https://wealth.bmoharris.com/insights/individuals-families/plan/aging-economy-improving-age/

About BMO Wealth Management U.S.

BMO Wealth Management serves mass affluent, high net worth and ultra-high net worth individuals and families with a full suite of wealth management solutions including wealth planning, banking and borrowing, investment management, retirement planning, trust and estate services, philanthropy, insurance and risk management, tax planning and ultra-high net worth services. With over 140 offices across 16 states and international offices in Canada, Hong Kong, and Singapore, BMO Wealth Management provides guidance and planning advice combined with individualized service and local experience. As of April 30, 2018, BMO Wealth Management had assets under management of US$47 billion and assets under administration of US$79 billion. BMO Wealth Management is supported by the resources and stability of one of North America's premier financial services organizations—BMO Financial Group. Visit bmowealthmanagement.com.

BMO Wealth Management is a brand name that refers to BMO Harris Bank N.A. and a number of its affiliates. BMO Harris Bank N.A. and its affiliates do not provide tax or legal advice to clients; these matters should be discussed with the appropriate tax or legal advisor.

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