The Baby Boomers Are Here!

Baby Boomers are people born after WWII in the years 1946-1964.  It's called a boom because so many children were born in that time - more than the generation before, and more than the generation after.   Why does this matter?  For Americans Under 40, it might mean that your parents are in retirement or close to it and they might not be prepared.  The average life expectancy for Americans is now approximately 75 for men and 81 for women.  That means that "Retirement" could be from 10 to 30 years...have your parents saved enough to survive without working?  To pay increasing medical bills?  To travel?  To spoil grandchildren?

Catch-Up Strategies

Because the government realized the Baby Boomers had not saved sufficiently for a secure retirement, they allow more annual contributions for people over 55 to allow them to "Catch Up" to where they should have been.  Click on the Contribution Limits Page or visit www.IRS.gov

Health Savings Accounts

Health Savings Accounts (HSAs) were created by the Medicare bill in 2003 and are designed to help individuals save for future qualified medical and retiree health expenses on a tax-free basis.  Your parents (or even you) can open a Health Savings Account and have the money invested for a positive return, and then withdraw the money, on a tax-free basis, to pay for various health care expenses.  Again, this puts the power of compounded interest in a tax-free environment to work.
After all, medical expenses are not likely to go down, and as we live longer, we usually pay more to do it.

For more information: http://www.treas.gov/offices/public-affairs/hsa/pdf/HSA-Tri-fold-english-07.pdf