Learn From The Boomers’ Mistakes

“Inside every older person is a younger person wondering what happened.”- Jennifer Yane.

In a recent BMO survey 42% of Canadian baby boomers said that if they could go back in time, they would have started saving up for retirement much earlier in life.

Baby Boomer Mistakes

As they say, hindsight is 20/20 and many boomers regret their “live for today” mantra now that they’re trying to figure out how they’ll make ends meet.

The majority of boomers are woefully unprepared for retirement.  In large part this is because they made too many critical financial mistakes.

As a result, boomers advise younger people to put more thought into what their retirement might look like and to budget properly for it.

Alas, much of the younger generation is just not getting it.  A TD survey found that two-thirds of their respondents have no financial plan for retirement and 16% have no financial assets whatsoever.

Related: Why Your Financial Plan Sucks

What could be a true story

Jeremy is in his mid-thirties and is married to stay-at-home mom Jessica.  They have two pre-school children.

He works at a good managerial position earning $85,000 a year.  They have no prepared budget and spend his entire take home pay each month.

Jeremy and Jessica have never been able to save money for a down payment on a house, so they rent in an upscale neighborhood.

Related: Why Do We Save?

They lease two late model SUVs.  They own several credit cards (look at the reward points they can earn!) and an unsecured line of credit.

Jeremy belongs to a pension plan at work so he doesn’t think he needs an RRSP or TFSA.  He thinks his children are too young yet for him to consider saving for their post secondary education.

Because they have no emergency savings, whenever they’re in a financial bind he looks to his mom for help.

Mom is widowed and lives frugally on her CPP and some investment income, but she regularly gives Jeremy access to her credit card and often dips into her home equity line of credit to help him out.

Fast-forward twenty years (and they do go fast!).  Mom has had some health issues and she, unfortunately, had to sell her house and move into an assisted living facility.

The proceeds from the sale are used for her rental payments and medical assistance.

Jeremy has been forced into early retirement.  He receives a lump sum severance package, just in time to pay for his daughter’s lavish wedding to be held in Jamaica.

Since they’re now retired, they decide to take it easy and spend the remainder of the money on a luxury month-long cruise.

On their return they receive notice that Jeremy’s former employer must cut his proposed pension payments in half due to an underfunded pension program.

Meanwhile, they haven’t kept up with their debt payments while they were away and their creditors are demanding payment.  What will Jeremy do?

Mom!  Can you help me out?  This is the last time, I promise!

Final thoughts

Boomers could be somewhat excused for being unprepared for retirement.  After all, we had no model to follow.  In general, the majority of us overspent and under-invested for most of our lives.

We never thought about retirement planning because we were too focused on living in the moment.  Why worry about getting old?

The “hope I die before I get old” generation didn’t anticipate our longevity and the probability of spending about one-third of our lives in retirement.

Related: Are You Counting On An Inheritance?

Likewise, we didn’t realize that we’d likely have to take responsibility for much of our retirement income.

In the BMO survey, 59% of boomers urged young people to open RRSPs and TFSAs as early as possible and maximize their contributions.

They advised them to pay off their mortgages faster and control their debts.

The boomer generation has done an excellent job of teaching others retirement planning lessons using the “don’t do what I did” technique.

You now have a model to (not) follow.  Younger retirement savers would be wise to learn from the mistakes made by the “buy now – pay later” bunch.

Sometimes the best way to prepare is to learn from other people’s mistakes.

It would be a shame to have the opportunity to look after your financial health – but fail to do so.

Print Friendly, PDF & Email


  1. Money Beagle on February 6, 2013 at 6:47 am

    Many boomers counted on the fact that pension plans were pretty well standard for a lot of them, and figured that plus social security would take care of them. Many are still getting pensions but they’re not creating the income stream that they had counted on. The scary part is that the generations following are now pretty much getting no pension plans, so we really need to save compared to what the boomers did. I think boomers built a lot of houses, had a lot of vacations, and bought a lot of SUVs that our generation won’t be able to continue. We’ll have to live in the houses that the boomers built instead of building new.

    • Boomer on February 6, 2013 at 4:30 pm

      @Money Beagle: It’s not really fair to lay all our economic woes at the feet of the boomers. Later generations have continued the poor financial legacy we started but will end up even worse off if they don’t change their lifestyles. Many boomers will still expect to receive some sort of inheritance from their depression-era, frugal parents – not so the kids of the boomers.

      I remember forecasts from several years ago (I think about 20) that new houses would be smaller and more compacted together because families will be smaller and no one will want to buy the larger homes when the boomers downsize. This prediction obviously was dead wrong. McMansions are continuously being built, larger than ever. I see many 30 – 40 somethings driving their Expeditions and Tundras to the corner store and taking annual winter vacations to resorts.

  2. Gary on February 6, 2013 at 8:41 am

    excellent post boomer. i will forward it to my 38 year old son. i actually have a brother who would fit right into your tale.

    • Boomer on February 6, 2013 at 4:31 pm

      @Gary: And I thought I was making up a horror story 🙂

  3. Joe on February 6, 2013 at 11:46 am

    Great post. But who wants to bet that if somebody invented a time machine and Boomers could go back, they still wouldn’t save more? lol. Learning from the errors of others — a much less painful strategy than learning from your own mistakes.

    • Boomer on February 6, 2013 at 4:34 pm

      @Joe: The only way a time machine would work is if we still had our present memories. That way we would know to keep our baseball cards in pristine condition, buy the Apple IPO and bounce in and out of the stock market at the right time.

      I’d be up for that!

  4. LifeInsuranceCanada.com on February 6, 2013 at 12:52 pm

    >>>They lease two late model SUVs.

    Shudder. If there’s one thing that keeps people chained to debt, it’s having ‘two late model car payments’. What is that, like $750-$1000 a month? That’s a mortgage payment sitting in the driveway.

  5. krantcents on February 6, 2013 at 3:14 pm

    I disagree, I had a great role model to follow. My parents went through the Great Depression and taught me how to save and live a frugal life. I was so good at that I reched financial freedom at 38 years old. I understand many boomers did not, but it is a poor excuse.

    • Boomer on February 6, 2013 at 4:42 pm

      @krantcents: You were lucky to have good role models and learn from them. While it’s not fair to paint everyone with the same brush, I think many children would rather do the opposite of their parents – just because.

      Most boomers did not learn about finances (or life) when they were young. I personally had absolutely no financial education – from my parents or at school. Perhaps it was presumed that my husband would take care of it. (?) I did eventually learn and take responsibility, but you’re right – many boomers didn’t and have no excuse and neither do later generations.

  6. Bet Crooks on February 6, 2013 at 5:56 pm

    One thing I’ve never understood is why does the Boomer generation extend to 1964? I think the label is getting used on too many people and it’s making it hard to draw conclusions about them as a group.

    That said, I hope that Canadians in their 30s and younger learn from someone, ANYONE, that it’s crucial to save. It doesn’t matter to me whether they save for retirement or just for a rainy day. The key is to stop racking up debt and start saving.

    • Boomer on February 6, 2013 at 7:07 pm

      @Bet Crooks: Demographics say that (in Canada at least) the Boomer generation spans 18 years from 1946 to 1964. Sometimes it seems that the media extends this time frame another 18 years. I laugh when I hear about the boomers who are walking their elementary children to school (or some other nonsense). Not likely unless they are boomer men on their second family.

    • Kyle on February 11, 2013 at 10:18 am

      In my fourth year of university I decided to pretend that every pay cheque was my last, and the savings started piling up… I think the easiest way to teach the younger generations to save more is to scare them with the harsh reality that jobs end, costs rise, and the parental safety net may not be there to catch them.

Leave a Comment

Join More Than 10,000 Subscribers!

Sign up now and get our free e-Book- Financial Management by the Decade - plus new financial tips and money stories delivered to your inbox every week.