Cecily O'Connor
RedwoodAge.com

Boomers who've been stunned by plunging home values and stock prices now have 200,000 friends to turn to for advice.

Eleven non-profit financial associations, representing more than 200,000 financial services professionals, aim to alleviate boomers' anxiety. They've formed the Partnership for Retirement Education and Planning (PREP) to better educate boomers about the unique financial challenges they face, and ways to address them. 

"Eight thousand American men and women woke up to their 60th birthday today, and that's going to happen every day for the next 13 1/2  years," said Philip Harriman, a spokesperson for PREP.  "Most have spent a lifetime raising kids and putting them through college. Now they can see retirement in sight, and have very little time and a big job ahead of them."

The coalition may have its work cut out for it, given the ongoing financial crisis. Boomers nearing retirement and their parents have been particularly hard hit as they've watched their nest eggs crack under pressure from a weak housing market and Wall Street's abusive practices.

"Today's market turmoil affects senior investors very directly, because for them, investing for the longer term isn't an option," said SEC Chairman Christopher Cox. "They and the more than 76 million baby boomers will directly benefit from this report on developing high standards for firms' interactions with senior investors."

The SEC just issued a report outlining practices that financial services firms can use to strengthen their policies and procedures for serving older investors as they approach and enter retirement.

That's fine for the future, but the need is right now.

The losses are frustrating for boomers - many of whom haven't adequately planned for their future - who are putting kids through college and/or still paying off their mortgage. And those who are just five years away from retirement also are having a hard time determining their prospects at a time when recession is looming. 

And that's where the coalition can help.

'Big Job' Ahead
Boomers face financial challenges no previous generation has encountered, including pension terminations, skyrocketing healthcare costs, uncertainty about government programs such as Social Security, decreased personal savings rates and significantly increased life expectancy.

And now they are even more confused because their home value has declined and 401(k) cut in half. One solution could involve cutting expenses, and reallocating that money into a 401(k) or another retirement savings account, Harriman said.

A study released this summer - well before the financial industry crisis took hold - found that workers, on average, who are seven years from retirement (boomers in their late 50s) will have to cut their standard of living by about 24 percent to ensure they don't run out of money in retirement.

Another consideration is whether to work longer than planned. While that option is "unpalatable" for some boomers, there are actually some unexpected benefits to a prolonged work life, Harriman added. That includes the ability to make more money, and delay the time in which they dip into retirement income plans. Social Security Benefits also will be higher the longer one stays in the workforce.

The "working longer" decision doesn't just affect older boomers either. Adults that are supporting kids in college, for example, might want to take time now to think through the logistics of their retirement, Harriman said.

Lifestyle and Lifeboats
PREP categorizes retirement alongside three priorities: consider the lifestyle you wish to lead during retirement; determine the life income you need to sustain your lifestyle for 20 to 30 years after retirement, and create lifeboats, such as disability insurance or life insurance, to protect against the unexpected.

Harriman said the non-profit PREP associations are working to better educate their members on the unique challenges facing boomers, and encouraging them to conduct community service education targeted at local boomers, regardless of their financial status.

Members of the Million Dollar Round Table, the National Association of Insurance and Financial Advisors and the Society of Financial Service Professionals founded PREP. Other organizations, including the American Council of Life Insurers, Association for Advanced Life Underwriting, Association of Health Insurance Advisors, GAMA International, Insurance Marketplace Standards Association, Life and Health Insurance Foundation for Education, National Association of Independent Life Brokerage Agencies, and Women in Insurance and Financial Services, also have joined in support of PREP.