We want to stay young. We want to be active. But is there something working against us? According to Hal M. Bundrick, a CPA and former financial advisor for Wall Street firms who writes for TheStreet.com, maybe there is. Namely, some baby boomers’ biggest regret: that they didn’t work longer.
Many American workers have begun proclaiming the end of retirement. An Allianz Life study released last week found that 82% of baby boomers — and Gen Xers — claim that a traditional retirement is a “romantic fantasy of the past.” A recent headline declared, “70 Is the New 65.” A few years ago, a Wells Fargo survey of “pessimistic” workers facing delayed retirement inspired headlines in the financial media of “80 Is the New 65.” Forget golf and antiquing: It’s a work-till-you-drop world.
Is a traditional retirement just a “romantic fantasy of the past?” An illusion?
Now, a study from Bankers Life finds 41% of baby boomers who are still in the workplace expect to work beyond age 69 — or never retire at all. Of those already retired, 69% of middle-income baby boomers say they would have liked to have been able to work longer.
You would think that such a never-ending work ethic might be rooted in financial fear. But of the retired baby boomers who do have a job, the respondents say it’s not just a money thing. In fact, six in 10 say they work for nonfinancial reasons— because they want to, not because they have to. Those surveyed cite such reasons as staying mentally sharp (18%) and physically active (15%), as well as maintaining a sense of purpose (15%).
Working simply because you want to might sound like a great life, but digging deeper into the survey reveals a dark reality. While boomers might want to work in retirement, most retired boomers (72%) aren’t working at all. And half of those who don’t work would like to have a job but can’t get one, mostly due to health issues.
Physical setbacks and the steep costs of health care can shock even the most financially prepared boomer. A Fidelity analysis last year estimated that couples retiring at age 65 are expected to face $220,000 in health care costs during their retirement years.
A halcyon view of retirement.
So much for the working retirement that many boomers are thinking will bail out their lack of savings or keep their minds and bodies active.
However, it’s not simply a health issue, as noted by Teresa Ghilarducci of the Schwartz Center for Economic Policy Analysis in New York. Older workers are finding it harder to get hired and are making less money.
“Calling for an increase in the retirement age as a solution to a lack of retirement savings overlooks nearly half a century of economic literature on earnings,” Ghilarducci writes in a recent blog post. “Economists have long known that age/earnings profiles have a parabolic shape, demonstrating a visible decline after the ages 55-59 as older workers are overlooked for promotions and on-the-job training. Workers experience a decline in earnings after ages 55-59 regardless of education levels.”
As Ghilarducci said in a Slate interview in March, “Working longer is a retirement plan like winning the lottery or dying earlier is a retirement plan. Being able to work longer is not a plan. It’s a hope.”
And as the saying goes, “Hope is not a plan.”
I have no interest at all in “retiring.” The concept just seems alien to me. I like having a sense of purpose in life. I retired from law 10 years ago and started my own business and hated the “I have nothing to do today” feeling that struck after I resigned from law. Playing golf every day? I don’t think so 😉
A sobering look at what is to come. Hard to swallow, but like most medicines it must be taken. Thanks.
My dad was a psychoanalyst who never retired. He continued to see patients into his 80s. At his memorial service, many of them got up and spoke about therapy with him had changed their lives for the better. He set me a good example.
Excellent post – it says things that need to be said (and pondered over).
But I’d like to point out that the word “retirement” tends to be used rather loosely these days. Retirement does not mean retiring from a life of work. Strictly speaking, it just means retiring from the position one holds when hitting the “retirement age” set for that particular line of work (which can be 62, as it was for me at the United Nations, or in other types of jobs 65 is common and in some jobs it can be as old as 70). And when retirement occurs in a kind of work one doesn’t like, or in an environment that is – or has become – uncongenial (say, because of a “bad boss”, a lack of opportunities, or more simply, feeling that one isn’t heard, that one doesn’t get things done the way one wants to), then it’s a blessing to be able to retire! It’s a relief to be able to turn around and start working at what you really want to be doing!
So, retirement means ending one kind of work and starting on another…if you’re lucky. Because it’s not all roses. Starting on another job, even one you think you’re going to love, can be unexpectedly hard. Many things can go wrong, above all, you could get disappointed: once you’re in the midst of it, you may find that it’s not really the kind of work you want to do, that the environment is in fact uncongenial (that’s what happened to me when I turned to painting – I’m simply not at home in the contemporary art scene, I disagree with just about everything that’s being done under the guise of “contemporary art” or “conceptual art”. Not my cup of tea. And being a non-conformist artist, I found myself tremendously alone).
Then there’s the problem of diminishing earnings: it’s absolutely true that people over 65 get paid less than younger people even if they do the same work…
Finally, all the above makes sense of course only if you are in good health and fit to work.
I retired from the workforce 13 years ago. Aside from the “new” careers I’ve discovered (as a clay sculptor and author), I volunteer in a variety of ways. I’ve never worked harder (for no pay) but I love making a difference in my community. There are so many options to give of your time, that meet the goal of keeping you mentally sharp, physically active, and provide a great sense of purpose.
People I know volunteer in the healthcare system, advocate for children and the abused, weed the gardens and trim the lawns at horticulture sites or their churches, teach reading to kids and adults, work in the libraries, help others trace their genealogy, write grants for non-profit organizations, run art festivals, manage charities, create fundraisers, build homes for the needy or restore buildings, organize group social activities, serve on boards of small companies and community associations, work in thrift shops, play in community orchestras and sing in professional choirs, and dozens of other things.
Running a volunteer organization is not the same as being the boss or supervisor in a business. You’ll need to marshall or learn plenty of new skills and grow your patience quotient. As a volunteer you’ll see plenty of things you think could be improved. In both cases, your business knowledge and skills can help if you’re willing to give of your time and experience. The network you’ll develop may even lead you to whole new options.
My mom retired early and is having a ball! There are so many things to do in the world that give purpose and are FUN. They also involved giving, which is a key to happiness.
I am newly retired. I was displaced from my job at 66. It has been about a year now. I wasn’t ready to retire, and I was very afraid that I wouldn’t like it. I don’t like it, I LOVE it !!! I get to spend more time with my family. I’ve joined a gym and am taking better care of myself. I picked up a few new hobbies and will soon be looking for a worthy cause to which I can volunteer. Retirement is much better than I anticipated.