Personal Finance

These are Baby Boomers Top Financial Priorities

Christy Bieber

Published: December 21, 2024 10:14 am

Key Points from 24/7 Wall St.:

• Baby Boomers are focused on retirement savings.
• Paying off debt is another top priority for Boomers.
• Many Boomers are also focused on building emergency savings.

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Competing financial priorities are a fact of life for everyone, but perhaps especially for Baby Boomers who are approaching retirement without a lot of years left to build a nest egg.

It’s important to make informed choices about where to put your limited dollars, so it can be helpful to understand what others in your age cohort are focused on.

So, what are retirees working on? Here are their top financial priorities right now, according to the Transameria Institute.

1. Retirement savings

Unsurprisingly, retirement savings is a key goal for many Boomers. In fact, 67% of members of this generation list saving for retirement as a current financial priority.

With most Baby Boomers now in their 60s and 70s, it’s not surprising that retirement is top of the mind. Members of this generation have median retirement savings of just $194,000,  and increasing that amount will be critical to a comfortable retirement.

Fortunately, there are options to build a more secure future, including contributing to tax-advantaged accounts like a 401(k). With the IRS rolling out new rules next year that allow retirees between the ages of 60 and 63 to make “super catch up contributions” or invest as much as $11,250 on top of the normal $23,500 contribution limit in 2025, Boomers will have plenty of opportunity to invest more in the coming year.

2. Paying off debt

Debt payoff is also a big focus, with 54% of Boomers reporting it’s a current financial goal. Since many Boomers still have mortgage debt and student loans they may not want to carry with them into retirement, there is good reason for members of this generation to want to say goodbye to creditors for good.

One approach Boomers may consider trying is consolidating debt using a personal loan or even a home equity loan or line of credit. With the Federal Reserve signaling interest rate cuts are coming in 2025, there may be opportunities to borrow at an affordable rate. For those with expensive credit card debt, reducing interest costs could provide a great opportunity to make debt payoff easier.

Creating a payoff plan is also a good idea. The debt snowball method is a popular approach, and it involves fully repaying debts with your lowest balance first in order to score quick wins and stay motivated. The important thing, however, is to come up with a plan and stick to it because it will be a lot easier to live on a fixed income as a retiree without losing a fortune to high interest costs.

3. Building emergency savings

Finally, 34% of Boomers say that building emergency savings is one of their current financial priorities. This too makes good sense as the pandemic demonstrated the uncertainty that can exist even for those who are nearing the end of their careers or retired already.

The need for emergency savings doesn’t disappear once you’re no longer getting a paycheck and, in fact, it may be even more important to have accessible liquid cash to cover unexpected expenses so you don’t have to take money out of a retirement plan at the wrong time.

By focusing on these key priorities, Baby Boomers can accomplish big things that will set them up for a better future. If these are your goals, they are good ones. If you’re already on track for all of these objectives, then you’re ahead of the game — but you can still set some goals of your own to work towards to make sure you’re using your money wisely.