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The Myth of Boomer Retirement
By Richard Nantel | September 11, 2007
For a number of years, the media have been reporting that many countries will be facing a severe shortage of workers due to the impending retirement of the baby boomers. Increasingly, I don’t think this will be the case.
If they haven’t already begun to do so, many boomers will soon be taking a sobering look at their finances. For the vast majority, the possibility of retirement at the age of 55, 60, and even the traditional age of 65 will likely evaporate as they begin to crunch the numbers.
According to a recent article, The Real Price of Affluence, in the Globe and Mail, the economist John Kenneth Galbraith predicted that, as the population’s income grew, people would tire of acquiring material goods and would instead opt for more leisure time. This has not occurred.
Over the past four decades, personal disposable income per capita has risen about 130 percent. Consumption, on the other hand, has risen 140 percent. Savings as a percentage of disposable income has declined by more than two thirds. Consumer credit (debt) has risen 150 percent. The boomers have been working very hard to support a richer lifestyle and saving less for retirement.
This is a tough problem to fix in a few quick years and would require an immediate change in lifestyle. But, frankly, how often do you hear of someone selling their house, one of their cars, and renting a modest little flat in a so-so neighborhood to focus on increasing their retirement savings?
Most boomers continue to hide their heads in the sand, thinking this will all work out in the end. Many are convinced they’ll be able to cash out and sell their homes to fund their retirement. This is good idea, except for two small details:
- In the U.S., that darn sub-prime mortgage problem is having a negative effect on home prices. This may last a while.
- Other boomers are planning to sell their homes as well, thus flooding the market and lowering house prices.
The end result will be that boomers will be working longer than they expected. Our future workforce will likely be significantly older.
Topics: Aging, Talent Management |
January 11th, 2008 at 1:05 pm
I suppose if you are talking about today, then this analysis is correct. But late retirement only postpones the inevitable…it doesn’t stop or change it. This is not a cultural issue, it’s a math issue, which cannot be changed despite our beliefs or assumptions. Eventually, boomers will retire. And when they do, X and Y will be all that’s left for the workforce. This has already started happening and will be even more pronounced 10 years from now. 20 years from now it will be ancient history.
And there is another side to this that seems to have been missed: Relevance. Will a 65 year-old boomer who’s trying to prolong his work life have taken all the necessary precautions to see to it that he is not irrelevant for next decade’s work requirements?
Companies that fail to position themselves for dealing with a Gen X&Y workforce will suffer the most.
February 11th, 2008 at 9:19 pm
I have a few years yet before retirement age, but with that said. For the last twenty five years I have taken in account how I want my retirement life to be. Ivesting into the future, sacrificing some now. This is not an easy thing to accomplish, especially when you are not a corporate executive which I am not.
My point is, no matter what level of income you are. We all have the ability to prepair for and have a joyful retirement.
It’s really up to you.
June 9th, 2008 at 3:13 pm
A few years ago it seemed like retirement was a long ways off. We both had good jobs, a 401K, and felt like we had time to save enough to retire comfortably. How quickly time has passed. Both of our retirement funds have lost money and the future looks grim. We have decided needed a plan B that would continue to bring in money to supplement our savings. Instead of relying solely on social security and savings, we have decided to try our hand at network marketing. It took several tries to realize that not every network marketing opportunity provides the kind of security we are looking for. A lot of them only wanted to take our money and offered nothing but hot air in return.
Even though we are both computer “literate”, network marketing is a like entering a new job, and we realized we needed the support and help of a good, honest team to be a success. We have learned some really neat ways to market the five opportunities we have chosen. One of the first lessons we have learned is network marketing is just like any other job and requires hard work, time, and patience.