Baby Boomers Will Transform Aging, Work, and Retirement

News Updates

Americans born between 1946 and 1955 will transform retirement by forgoing the tradition of a leisure-filled life. Instead, their financial obligations will encourage many of them to remain in the workforce, some indefinitely, according to a MetLife report, Early Boomers: How America’s Leading Edge Baby Boomers Will Transform Aging, Work & Retirement.

Many Boomers are unable to retire as anticipated, the study says, because:

  • They may have debt from putting their children through college, borrowing against their homes and, in many cases, second home ownership.
  • They expect to live longer than their predecessors and fear outliving their savings.
  • Their financial nest eggs have been severely impacted by low interest rates and an uncooperative stock market.
  • Their family finances have also been stretched by the fact that one in four have adult children still living with them.

“This group of highly educated individuals is apt to find a welcoming employment market where their experience is desirable and where employers will recognize that they do not require benefits like health insurance due to their eligibility for Medicare,” said Sandra Timmermann, director of the MetLife Mature Market Institute, the insurer's research organization on aging and longevity. “The preponderance of white-collar workers in this group will also make it easier for them to continue working.”

The report, co-authored by Peter Francese, founder of American Demographics magazine, notes that in the past, about three-quarters of men and women would be fully retired within four to five years from their 65th birthday. But by the time the first Early Boomers approach age 70, fewer than half of those ages 65 to 69 will have retired. Early Boomers, now numbering 36 million, have swelled the 55 to 64 age cohort more in the past decade than in the previous 30 years and made that cohort the largest it has ever been.

“The Leading Edge Boomers have a tradition of being trailblazers and their entry into the 65-plus generation keeps that reputation alive,” said Francese. “This group was among the first for whom college education was commonplace. They were also among the first to have a sense that their lives would be better than those of their parents. While their retirement years will be met by financial challenges, they may end up having more social and personal fulfillment than that of their parents through their continued presence in the workplace.”

Over the next 10 years, aging Early Boomers will result in a 50 percent rise in the number of people 65 to 74 years old, a growth rate for that cohort not seen in 50 years.

Four in 10 U.S. Workers Plan to Delay Retirement

A growing number of U.S. workers are planning to delay their retirement, according to a survey of nearly 9,100 employees by consultancy Towers Watson. Moreover, most workers are prepared to spend less in retirement.

The survey, conducted in May and June of 2010, found that 40 percent of workers are planning to retire later than they were two years ago. Older workers and those in poor health comprise the largest percentage of employees planning to delay retirement. In particular:

  • 45 percent of employees in poor health plan to postpone their retirement.
  • When asked why they are choosing to retire later, more than two-thirds (68 percent) of older workers said to keep their health care coverage, while 62 percent said the higher cost of health care.
  • Six in 10 older workers (61 percent) blamed the decline in the value of their 401(k) plan.

“Despite efforts to improve their household balance sheet, it appears that older workers are also coping with their current situation by delaying retirement, reducing their expectations and possibly settling for a lower standard of living in retirement,” said Kevin Wagner, a senior retirement consultant at Towers Watson.

“Unfortunately, the groups of employees that feel most compelled to take these steps are often those that can least afford to—older workers and those in poor health. Today’s challenges of retirement and health care affordability are creating a new set of ‘hidden pensioners,’ a group that otherwise is ready to retire but cannot afford to do so.”

Stephen Miller is an online editor/manager for SHRM.