Six Essential Retirement Strategies for Baby Boomers
Emergency funds, estate plans, different kinds of insurance and smart investing strategies are all parts of a strong retirement plan.


As Baby Boomers transition into retirement, ensuring financial security becomes paramount in the face of potential uncertainties. From market fluctuations to health care expenses and longevity risks, navigating these challenges requires proactive planning and strategic decision-making. Here are six actionable steps for Baby Boomers to protect their finances and secure a prosperous retirement.
Before diving into specific strategies, it's crucial for Baby Boomers to grasp the various financial risks they may encounter in retirement. These risks include market volatility, health care costs, inflation and the need for long-term care. By recognizing and addressing these risks, Boomers can better prepare themselves for the financial challenges ahead.
1. Building an emergency fund.
A robust emergency fund serves as a financial safety net, providing Baby Boomers with peace of mind in the face of unexpected expenses or income disruptions. While conventional wisdom suggests setting aside three to six months' worth of living expenses, retirees may benefit from a larger emergency fund to account for potential health care or long-term care costs.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Baby Boomers should carefully assess their current expenses and financial obligations to determine the appropriate size of their emergency fund. Additionally, they should consider potential health care costs, including deductibles, copays and out-of-pocket expenses, when calculating their emergency fund needs.
By setting aside a sufficient amount in their emergency fund, Boomers can protect themselves against unforeseen financial emergencies and maintain financial stability in retirement.
2. Ensuring sufficient insurance coverage.
Reviewing insurance policies is essential to ensure Baby Boomers have adequate coverage to mitigate various risks in retirement. Health insurance plays a critical role in covering medical expenses, while long-term care insurance can protect retirement assets from the high costs of assisted living or nursing care. Additionally, life insurance and disability insurance provide financial protection for you and/or your loved ones in case of illness or death.
Baby Boomers should thoroughly review their insurance policies to understand the extent of coverage provided and any limitations or exclusions. They should also assess their potential health care needs in retirement and consider purchasing supplemental insurance, such as Medicare Advantage plans or Medigap policies, to fill gaps in coverage.
3. Diversifying investments and managing risk.
Diversifying investment portfolios is key to mitigating risk and preserving capital in the face of market volatility. While reducing exposure to equities near retirement is prudent, certain financial products, such as annuities, offer protection from market fluctuations while providing a reliable income stream. Annuities with guaranteed income features can help cover income needs not fully met by Social Security benefits.
Baby Boomers should work with a financial adviser to develop a diversified investment strategy tailored to their risk tolerance, financial goals and time horizon. This strategy may include a mix of stocks, bonds, mutual funds and other asset classes designed to generate income and preserve capital.
4. Properly preparing for health care costs.
Health care expenses can pose a significant financial burden in retirement, making it crucial for Baby Boomers to prepare adequately. In addition to Medicare coverage, long-term care insurance should be considered.
Baby Boomers should carefully evaluate their potential health care needs in retirement and explore various insurance options to mitigate the financial impact of medical expenses. They should research Medicare coverage options, including Parts A, B and D, as well as supplemental Medigap policies or Medicare Advantage plans.
5. Considering investments that combat inflation.
Preserving purchasing power is essential in retirement, necessitating investments that keep pace with inflation. Certain stocks or mutual funds focusing on sectors with growth potential or dividend-paying companies can provide a hedge against inflation while generating income for retirees.
Investment options may include dividend-paying stocks, real estate investment trusts (REITs), inflation-protected bonds and Treasury inflation-protected securities (TIPS). By allocating a portion of their investment portfolio to inflation-fighting assets, Boomers can mitigate the erosive effects of inflation on their retirement savings and maintain their standard of living in retirement.
6. Setting up an estate plan.
Establishing a comprehensive estate plan is vital as Baby Boomers age. This includes naming financial and health care powers of attorney to make decisions in case of incapacity. Additionally, having a will or trust ensures assets are distributed according to the retiree's wishes, minimizing the risk of disputes or legal challenges.
Baby Boomers should work with an estate planning attorney to create a comprehensive estate plan that reflects their wishes and protects their assets for future generations. This may include drafting a will or trust to specify how assets should be distributed upon death, designating beneficiaries for retirement accounts and life insurance policies and appointing trusted individuals to serve as executors or trustees. Additionally, Boomers should consider establishing advance directives, such as health care proxies and durable powers of attorney, to ensure their wishes are honored in the event of incapacity.
Navigating financial uncertainties in retirement requires proactive planning and a multifaceted approach to risk management. By building an emergency fund, ensuring sufficient insurance coverage, diversifying investments, preparing for health care costs, considering inflation-fighting investments and setting up a comprehensive estate plan, Baby Boomers can safeguard their financial well-being and enjoy a secure retirement.
As they embark on this next chapter of their lives, Boomers can take comfort in knowing they've taken proactive steps to protect themselves from unforeseen challenges and pave the way for a prosperous future.
Justin Stivers is an investment advisory representative of and provides advisory services through CoreCap Advisors, LLC. Stivers Law is a separate entity and not affiliated with CoreCap Advisors. The information provided here is not tax, investment or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
Related Content
- Turning 65 This Year? Here Are 10 Key Things to Know
- The Five Stages of Retirement (and How to Skip Three of Them)
- Five Things I Wish I’d Known Before I Retired
- How Life Insurance Can Help You Preserve Your Wealth
- If You’re Preparing to Move, Should You Buy or Rent?
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Justin B. Stivers was born in Florida but raised in Knoxville, Tenn. He pursued his undergraduate education at Appalachian State University in Boone, N.C. After graduating, Justin served three years in the United States Peace Corps, living in a rural coffee farming community in Honduras. This experience not only enriched his life but also helped him become fluent in Spanish. Upon completing his service in Honduras, Justin attended law school at the University of Miami in Miami, Fla. He lived in Miami for the next 15 years, during which he built a successful estate planning law firm. In this role, Justin helped families plan for their futures, feeling a sense of accomplishment and service.
-
What About Those ‘Guaranteed’ Life Insurance Ads?
Guaranteed life insurance policies can sound tempting if you've been declined for insurance elsewhere. Here are four downsides and one alternative.
-
13 Answers to Pressing Social Security Questions
From smart claiming strategies for couples to tips on maximizing your monthly check, we have advice that can help you.
-
Eight Tips From a Financial Caddie: How to Keep Your Retirement on the Fairway
Think of your financial adviser as a golf caddie — giving you the advice you need to nail the retirement course, avoiding financial bunkers and bogeys.
-
Just Sold Your Business? Avoid These Five Hasty Moves
If you've exited your business, financial advice is likely to be flooding in from all quarters. But wait until the dust settles before making any big moves.
-
You Were Planning to Retire This Year: Should You Go Ahead?
If the economic climate is making you doubt whether you should retire this year, these three questions will help you make up your mind.
-
Are You Owed Money Thanks to the SSFA? You Might Need to Do Something to Get It
The Social Security Fairness Act removed restrictions on benefits for people with government pensions. If you're one of them, don't leave money on the table. Here's how you can be proactive in claiming what you're due.
-
From Wills to Wishes: An Expert Guide to Your Estate Planning Playbook
Consider supplementing your traditional legal documents with this essential road map to guide your loved ones through the emotional and logistical details that will follow your loss.
-
Your Home + Your IRA = Your Long-Term Care Solution
If you're worried that long-term care costs will drain your retirement savings, consider a personalized retirement plan that could solve your problem.
-
I'm a Financial Planner: Retirees Should Never Do These Four Things in a Recession
Recessions are scary business, especially for retirees. They can scare even the most prepared folks into making bad moves — like these.
-
A Retirement Planner's Advice for Taking the Guesswork Out of Income Planning
Once you've saved for retirement, you'll need your nest egg to support you for as many as 30 years. For that, you need a clear income strategy, not guesswork.