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Welcome to my boomer financial refuge

Welcome to Boomer Bucks, a place of refuge for baby boomers facing financial issues in times of uncertainty.

We are 76 million strong, born between 1946 and 1964 to parents who had experienced cataclysmic events, including the Great Depression and World War II. Yet despite the hardships they endured, they felt optimistic enough about the world to populate it abundantly.

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Our parents remind us about how difficult things used to be. They scraped together a living, many staying at one job all their working lives so that they could reap promised retirement benefits. Most lived within their means since credit cards weren't widely available until we came of age.

Things are different today. As a group, we put purchases on plastic more often than we should, effectively committing future earnings to pay for stuff we buy today.

Frequent victims of job layoffs, we strive to continually reinvent ourselves by taking courses, getting MBAs, capitalizing on our life experiences, becoming consultants or entrepreneurs. Or, disillusioned entirely with the system, we reject it by changing careers to one that's better aligned with our values and sensibilities -- usually taking a pay cut as a result.

Times, they are a changin'
Some 40 years ago, the oldest among us boomers rebelled against the establishment, not trusting anyone over age 30. Last year the youngest of us turned 40. We are the establishment. And some of us find ourselves writhing under a system that doesn't seem to be working well for anyone except for a privileged few.

Retirement looms ahead for us all. Are we prepared? Are we doing everything we can to prepare? We have no choice but to look this issue squarely in the eye, because no one, not the companies for which we work, nor the government of this country, gives us any real guarantee about retirement.

In this column, we'll address retirement: What happened to the old-fashioned pension plan? How are we doing with our 401(k) plans? Are we investing wisely? How much do we need to accumulate? What will happen if Social Security gets privatized? Is privatization a good or terrible idea?

While we look ahead to retirement, we also worry about helping our children get ahead by sending them to college. Financing a college education will also be a key topic. Saving? Borrowing? How can we best afford to send our kids to college? Are 529 plans the way to go? What if we're not prepared, and the kids are already in high school? What options do we have?

We'll also discuss other financial issues -- disability and long-term care insurance, estate planning considerations, investment strategies, etc. And I invite you to write in with topics that you're interested in hearing more about.

The money connection
If you think about it, nearly every decision we make has a financial component. If our kids get good grades in high school, they could be eligible for scholarships or financial aid. If they goof off, the burden is on us to help them. If we save for their college education, it might interfere with their eligibility for financial aid. Some savings vehicles are better than others from a financial-aid standpoint.

If we marry unwisely, we will suffer both emotionally and financially at the dissolution of the marriage. If we marry again and bring children in from previous marriages, the new family dynamic will be profoundly complicated, and will most assuredly have financial repercussions.

We are taking actions that are inextricably tied to money when we move, change jobs, lead a sedentary lifestyle, commute to work, dine out, ease depression by shopping, fly across the country, take a daily walk, talk on our cell phones, etc. We don't always see the financial implications of our actions as we muddle through life.

As a fellow boomer, I feel passionate about financial matters because we as a society are fumbling with money issues.

Whose fault is that? We receive no formal education in financial planning unless we pursue it as a field. If we look to consumer financial publications for advice, we see headlines such as "10 best funds to buy now." These headlines are designed to get magazines to fly off the shelves, and are written by editors who are much more concerned about newsstand sales than about your personal finances.

As consumers, we are bombarded by marketing messages that suggest success is measured by the car we drive, the house we own, the golf clubs we use, the clothes and jewelry we wear. We still idealize youth and try to stave off signs of aging by buying vitamins and getting injected with botox. We have sold our souls to finance companies; we have misplaced our faith in corporate America, which will not take care of us no matter how loyal we may be (unless we are a top-ranking executive).

We are on our own, but united, we are a formidable force. We are smart, we are strong, and we can prevail.

If you have a topic you'd like to see addressed in this column, please send it to me via e-mail. If you have a particular financial problem that you would like addressed, please continue to send your queries to Dr. Don, Tax Talk, the Real Estate Adviser or the Debt Adviser. They have been helping Bankrate readers for years, and are best equipped to address issues specific to your circumstances.

If you're a Gen X or Gen Y person, feel free to tune into this column. The issues that obsess boomers now will concern you later, and this heads-up can help you get ahead of the game.

And those of you who are on the other side of the boomer generation may be interested in contributing your thoughts and ideas, too. I welcome your words of wisdom.

Longtime financial journalist Barbara Mlotek Whelehan earned a certificate of specialization in financial planning.


-- Posted: Jan. 26, 2005




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