Baby ‘gloomers’ are reaching retirement age and many think they have a problem. Often they do, but not necessarily the problem they imagined.
Baby ‘gloomers’ are the younger siblings that hang off the coattails of the Baby Boomer – they lack the brash confidence of their swinging sixties elders. For them ‘Free Love’ was replaced by AIDs and full employment replaced by the miners’ strike and the three day week. They are the ones who watched as the promise of early retirement faded along with their entitlement to the gold plated define benefit pensions.
But as they reach retirement many are finding the challenges are not those they expected. A combination of increased life expectancy and missing out on the excesses of drink and drugs means they reach retirement in far better health than older brothers and sisters. The pensions service built up in their defined benefit pensions, while not the full monty, still provides income enough to fund a retirement that could last 30 plus years. Add to this their parents, who for decades continued as if they would live forever, are now ‘clocking out’ and leaving a sizable legacy.
The original expectation of a lean later life is, for some, being replaced by the challenge of managing considerable assets -and this is proving just as challenging as not having enough.
The first challenge is recognising and accepting their good fortune. Many I work with are so conditioned by the Puritan work ethic of working hard and saving every penny that they simply refuse to accept the reality of their good fortune.
Once accepted the next challenge is to do it justice. While for some good fortune is the result of their own hard work the chances are that much is not. Rampant growth in property values is probably matched only by the increased value of pension entitlements and an unexpected windfall from the previous generation. Whatever the cause, now is the time to do it justice.
While the cautious Puritan in you says save it for a rainy day, those in the know say do anything but! When it comes to dying there is a target range for tax efficient savings which for individuals runs from £0.00 to £325 000. Any more and the Chancellor takes a hefty cut. Why tax considerations are important the real costs has nothing to do with tax. First is the ‘lost opportunity’. You could have done more with your life – seen, experienced or done more. Second, and more important, you could have done more to benefit others. They could be your own family or people or causes you care about.
Some argue that they don’t want to ‘deprive their offspring of satisfaction of achievement’. Twaddle! Their offspring have already been deprived of rampant house-price inflation and a generous pension. Not only that they will have to wait much longer to inherit anything.
If Baby gloomers find that life has been kind to them I suggest its their duty to share….!