Every generation believes itself unique. Unfortunately for Baby Boomers, this may be especially true about their ability to retire.

Some sociologists argue that the Baby Boomer generation has taken historical uniqueness to the extreme, rewriting the rules on just about everything: sex, marriage, work ethic, consumption, faith, and even death. Now that Baby Boomers are in or entering their 60s, it’s ironic then that many lament they cannot retire as their parents did. 

In a recent survey by AARP, 44 percent of Boomers said they believed their standard of living will be worse than that of the previous generation. 

Despite this result, the first Baby Boomers are often declining to delay their retirement past the age that Social Security defines as their full retirement age, according to a 2013 MetLife study. Even though these Boomers enjoy approximately five more years of life expectancy than their parents did at age 65, 52 percent of these Boomers have retired at an average age of 59.5.

On the plus side for Boomers is the fact that one of the biggest threats to retiree security -- inflation -- is mercifully low. Older Americans will recall a time when annual inflation averaged between 6 percent and 10 percent a year, and how cumulative inflation from 1970 to 1989 ran a whopping 162 percent.

So what’s left to retirement for Baby Boomers to figure out?  What rules should they break, and which should they keep?

  • The “4 percent” withdrawal rule:  Developed two decades ago, this rule sets the inflation-adjusted amount that retirees can take annually from their savings in order to avoid running out of money before their deaths. The rule was based on historic asset return data, and focused on the negative returns of the Great Depression and the stagflation of the 1970s as presenting the greatest threats to individuals living on investment income. Four percent was determined to be the maximum rate that would allow a retiree to live through periods like these without exhausting his resources. But while 4 percent was created to work for Boomers’ parents or grandparents, it‘s unclear as to whether it will work going forward. Near-zero real returns to bonds as well as increased global volatility have many financial planners believing the “safe” withdrawal rate will need to be lower for Boomers. At the very least, Boomers will need to be flexible in their retirements, able to dial down their rate of withdrawal in extremely negative return environments, delaying consumption until more positive returns are achieved. BREAK IT

  • No debt in retirement:  Boomers are already carrying much more debt – think mortgages and credit cards – into their golden years than did their forbears. But today’s retirees would do better to honor their elders’ example.  Being debt-free in retirement provides necessary cash-flow flexibility. KEEP IT

  • A care-free retirement depends on smart investing:  While not exactly a “rule,” the many brokerage ads depicting happy couples strolling the beach have a lot of retirement-bound Boomers believing that if they just pick the right investments, they will do fine. The reality is a bit more complex:  Prudent investing is wise, but not a complete solution until combined with expense control, down-sizing, health care and disability management, and even part-time work. A diversified “portfolio” of solutions, not a single hot stock or fund, will be the winning formula for many retirees. BREAK IT

  • A carefree retirement, period: Isn’t this the deal that all generations, not just the aging hippies, subscribe to? Unfortunately, Boomers’ increasing life expectancies – theirs and their parents – have meant that their retirements may include much elderly caretaking. Meanwhile, their children – hard-hit by the economy – are also asking mom and dad for help.  Boomers will need to establish realistic priorities, and to set financial limits for their retirements that they might not have anticipated. They’ll need a multi-generational approach to financial planning that addresses both their needs as well as the needs of their extended families.

Defiant Boomers have always done things their way, and navigating retirement will be no exception.  They are, in fact, the first generation that has to look primarily to their own resources and management – rather than to government or corporations – to invest for retirement and create an income stream from these investments. 

Fortunately, financial planning and the certification of competent, ethical professionals have come of age with the Boomers, to help them make the most of this uncharted territory.  Boomers will no doubt continue to “do their own thing” in retirement, but with a CFP, they can do it prudently and successfully.