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PHOTO: DARREN BROWN
PHOTO: DARREN BROWN
excess wealth, what do you put your money into?”
The four main investment possibilities are cash, bonds,
stocks and real estate. (He adds that sub-categories such as
art and jewellery are for the extremely wealthy, rather than
mainstream investors.)
David also points out that “the stock market blows real
estate markets out of the water over time, but it doesn’t
work out for a lot of investors because they see its volatility
and don’t handle that very well.With real estate, it’s out
of sight, out of mind and you get to hang out in it too. It’s a
natural time for people to want to own that cottage and
they can afford it.There’s also the element of building that
generational place where families stay connected and memories
are retained.”
“Obviously, some of your money goes into RRSPs, but
that brings you no joy,” he adds.“I don’t think people are
able to build a family outing around their RRSPs.”
Family
Family is another priority for boomers. “The older
cohort is starting to think about estate issues and passing
money and property along to their kids,” David explains.
The younger group, the sandwich generation, is
focused on making sure their children receive further education
and are happily launched, while they are also looking
after aging parents.
According to a recent survey by the MetLife Mature
David Cork
Market Institute, the majority of the boomer generation
approaching retirement is focused on the traditional
nuclear family.
“Despite the social and political turbulence of their
youth, these leading edge boomers have established very
traditional lifestyle characteristics,” says Sandra
September 2008 • 11 • Fifty-Five Plus Magazine
Timmermann, the Metlife director who conducted the survey.
“They were married once, had two children and feel
they’ve done a decent job of caring for their family, their
community and themselves.” Part of the natural order of
things is considering succession and estate planning.
At the lower end of the boomer spectrum,the younger
group can expect to spend as many years caring for elderly
parents as they spent raising their children.
Health care
The third priority for the older group is health care.
“Challenging things are happening to them from a health
perspective,” notes David. Many older boomers must deal
with joint-replacement surgery and other age-related health
issues.
For most of the younger cohort of boomers — those
born between 1955 and 1965 — “health is not on the scorecard
for them, because most of them don’t have to deal
with health issues yet,” says David.“But they are mindful of
health care because they have a friend who has died and
they have parents who are a challenge. Their worry isn’t
about their own health care, it’s about their parents’ health
care.”
“I’m assuming that most of the people in the older
group don’t have parents to worry about,”he adds.“We tend
to lose our parents when we are in our 50s. Suddenly, we
are the older generation.This is a time when boomers’ parents
are starting to pass away.That obviously has negative
emotional implications, but it has positive implications
from a financial perspective, in that they are starting to
inherit.”
For the older boomers, this means that they have additional
money to invest. Meanwhile, the younger boomers
are still focused on paying down mortgages and other
debts, growing their investments and creating wealth.
Most of the latter half of the baby-boomer generation
have their parents around and are still worrying about putting
their kids through university,says David,who describes
himself as a perfect example of this “sandwich generation”
circumstance.
“At age 48, I have a mother with Parkinson’s disease
who is declining rapidly and I have kids who are just entering
university, so there are challenges from both ends.”
For all boomers,regardless of their stage of life and priorities,
David offers the succinct advice to plan ahead.
“The reason that people struggle with these issues is
that they are not planning for them,” he says.“In our industry
generally, we see people who want to invest their
money but don’t have a plan.They don’t know what they
want to accomplish or what they want to see as the end
result. Wanting to throw some money into an RRSP and
have it do well is not enough. It’s important to have a plan
so that you can deal with all the issues that might come up.”