How Much of Each Paycheck Should Boomers Invest in Themselves?
Written by
Kerra Bolton
Edited by
Cory Dudak
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Many baby boomers are asking what comes next and how to make their golden years truly count after decades of working, saving and caring for others.
Whether it’s picking up a new skill, prioritizing health or pursuing bucket list adventures, investing in one’s self after 60 is essential. However, with fixed incomes, retirement goals and inflation, finding balance can be tricky.
So, how much of each paycheck should boomers invest in themselves?
A Different Kind of Nest Egg
Brett Daniel, founder of Daniel Safe Retirement Solutions, said that as boomers near retirement, they should focus on contributing to IRAs or 401(k)s.
“If they are already retired, they should manage withdrawals effectively,” Daniel said. “It is important to set up a budget if you are living on fixed retirement income that accounts for retirement savings and personal development activities.”
Steve Sexton, CEO of Sexton Advisory Group, said investing in oneself should also include making smart decisions about estate planning and long-term care to provide a buffer if things go awry.
“Investing in yourself can also include making time for things that bring you joy or a sense of calm, like taking classes to learn a new language or skill, traveling the world with your spouse, pursuing a new hobby or prioritizing your health by eating better foods and living an active lifestyle,” Sexton said.
How Much Should You Spend?
Some experts said boomers should allocate 5% to 10% of their retirement income for self-investment.
“The goal is to create space in the budget for personal fulfillment without jeopardizing core financial needs,” said Travis Forman, Portfolio Manager at Strategic Wealth Counsel.
Others, like Daniel, said the exact percentage boomers should dedicate to investing in themselves depends on their financial stability and long-term goals. “It’s a good idea for boomers to regularly reassess their financial priorities and what they would like to accomplish during their retirement years by way of health, skills, education or leisure,” he noted.
Smart Ways To Budget
Investing in one’s self should include strategies that build financial freedom and security while offering peace of mind and mental well-being.
“Consider setting aside a fixed percentage of income for health, education or new, fun experiences,” Daniel said. “This percentage can be adjusted based on current needs.”
Smart examples of investments for boomers include dividend-paying stocks such as utility and healthcare companies.
“Bonds are also a smart choice that can offer fixed-interest payments,” Daniel said. “Health Savings Accounts (HSAs) are another smart choice and offer advantages to save for healthcare expenses. Gold and precious metals, as well as long-term care insurance, are also wonderful choices for boomers.”
Daniel explained, “An annuity is a great option that can provide a steady, income stream for boomers that can help cover living expenses for retirement. Fixed annuities can offer a low-risk option for those who need reliable income.”
Returning to What Matters Most
After a lifetime of working, caring for others, and planning for others, boomers may feel guilty about spending money on themselves. However, that mindset is changing.
“Intentional spending that is aligned with values while also working to preserve savings for longevity and unexpected needs is a good mindset to have during retirement,” Forman said. “Viewing money as a tool to create a meaningful and healthy life helps replace guilt with retirement, and this chapter should be about enriching life with intention and pride.”
Retirement isn’t the end of growth — it can be a return to what matters most.
“We work hard, spend time with family and try to be careful in our spending,” said Estate Planning Attorney Kevin Quinn. He is also the president and founding attorney at Legacy Counsellors, P.C. “We try and take care of ourselves so that we are healthy and live long lives. However, when was the last time you took a day to just think about what you’re doing everything for?”
Quinn posed a few final questions to ask yourself: “Is it part of your purpose in life? Are you spending your money in a way that supports your purpose in life? Are you thinking about what your abundance can do for your family?”
More From GOBankingRates
Sources
- Brett Daniel, Daniel Safe Retirement Solutions
- Steve Sexton, Sexton Advisory Group
- Travis Forman, Strategic Wealth Counsel
- Kevin Quinn, Legacy Counsellors, P.C.
