The baby boomer generation is getting old. They’ve long become parents and now grandparents which means many are getting to retirement age. Apparently they’re retiring at a pace of 10,000 a day and will continue to for the next two decades. It’s a good thing they aren’t all retiring at once though because there’s an infrastructure out there that can’t support them yet. Here’s just a few problems:
Dementia and financial decisions: As we age our brains don’t work as well as they used to. In some cases the brain starts to degenerate and the decision making process breaks down. Someone with dementia isn’t capable of making financial decisions and lots of baby boomers will live long enough to become at risk for the disease. Financial advisors are trying to plan for this but it looks like the legal system may need some changing to give them a little more leeway. If someone all of a sudden wants to wire money overseas to some sketchy company does the broker have the authority to step in or do they have to send it anyway? Compounding the matter is the fact that boomers had less children than their parents did and therefore it may be more difficult to track down someone responsible for an elderly boomer in a couple of decades.
The right financial advisors: Even with a system in place to protect an elderly person from making a bad financial move there may not be enough financial advisors the help them anyway. The financial crisis may have scared away some people but the financial advisory business is still very strong. And readers of personal finance blogs know that making the transition to retirement involves a lot more than just finding a hobby. Instead of adding to your nest egg you’re going to start taking from it. Financial advisors aren’t really prepared for the surge of retirement and estate planning needs that will come with the boomers over the next decade. But they are at least aware a change is coming.
Doctor distribution: Part of the benefit of retirement is the option to live pretty much anywhere. Pensioners with direct deposit have all the flexibility in the world. Many choose to live near family or at least escape the hustle and bustle of city life. The problem is many of these areas may not have the proper healthcare facilities for an aging population. There’s been a shortage of primary care physicians for decades. Partially because the money isn’t in family medicine. Even with the right facilities, they may not accept Medicare. Obamacare isn’t likely to make this any easier.
Most of us are aware that retired boomers are going to put a strain on the healthcare system but what we don’t understand is the effect they’ll have everywhere. The entire economy will adjust to provide more service to them. When the boomers hit their late 70s and 80s many are going to need help doing day to day things. They’re an independent generation too so mobility will be important. They’ll still drive and some will probably drive longer than they should. There will be a significant shift in business and government towards providing goods and services to this retired population. If you aren’t prepared for that, now is the time to start.