Born between 1945 and 1964*
Our APERS active membership spans the current variety of generational groups such as “Baby Boomers,” “Generation X,” and “Millennials.” Every age has unique features, challenges, and opportunities.
The Baby Boomer challenge:
Many Baby Boomers were already in mid-career when employers started adopting 401(k) plans, so they haven’t had as much time to save. This means their retirement goals may need to be adjusted.
The goal: Catch up. Baby Boomers would be wise to sit down with a certified financial planner, set a goal year for retirement, and start making sure they are on track to achieve it.
APERS suggests: Unlike those with a 401(k), APERS Baby Boomers cannot increase their retirement accounts by contributing more funds to them. Instead, they should determine ways to increase their benefit amount before retiring. This means they need to increase their service credit or their compensation. We're not going to advise you on increasing your pay, but Baby Boomers can increase their service credit by exploring benefit provisions such as reciprocal service credits and service credit purchases.
Besides finding ways to catch up, baby boomers should also explore system options that provide a lump sum payment at retirement. They can obtain lump sum payments by participating in the Deferred Retirement Option Plan (DROP) or the Partial Annuity Withdrawal (PAW) plan. In both cases, members receive a reduced monthly annuity payment; however, they also receive a lump sum payment that is eligible for rollover to another qualified plan. Many of our members roll over the payments, and these payments can provide their financial planners with more planning options.
*Birth year ranges for generational titles from “Minding the Generation Gap: Investigating Media Portrayals of Millennials and ‘Gen Z’" by Logan Casey, New York Times, October 31, 2016. Some material for this discussion was derived from issues raised by Jennifer Brown of the National Institute on Retirement Security as reported by Kara Stiles of Forbes.
Generational Retirement Issues, Part 2: Generation X (Born between 1965 and 1984)