Well, Toto, with the morning temp a chilly 30, I guess we’re not in South Carolina any more. Wow. What a difference about 800 miles makes. But I can report from my Spring Break trip to Dataw Island (near Hilton Head) that spring will make its way to NE Ohio — eventually. The farther south you go the more color you see in the trees, flowers, bushes and so on. And I’ll admit that I enjoyed running mid-morning (around 8:30) in shorts and a T-shirt.
I’ll also admit that when I travel like that I think about retirement. Nah, not for me. (I’m going to work and live forever. Woot.) But retirement in general — which really is on the minds of millions of people these days. And I hate to say this — but it is something you should be thinking about no matter where you are on the career/age totem poll. If you are in your 20s, 30s or 40s, think about how you are going to save enough during your working life to live without a diet of dog food during the golden years. And for those of you (and me?) about to embark on the endless search for the world’s softest yogurt and early-bird dinner specials, think about how you are going to spend big chunks of time, each and every day, week after week, and on and on.
Up until the current world economic meltdown, the U.S. Department of Labor estimated that up to 95 million baby boomers — those of us now roughly in our early 60s and 50s — would retire within the next 15 years. Not sure that is going to happen. In fact, consider this.
According to an article in The Wall Street Journal (subscription only), the “percentage of people age 65 and older who are in the work force rose to 16.8 percent at the end of last year, from 11.9 percent a decade earlier. Among 75 and older, the increase was even greater — to 7.3 percent from 4.7 percent.”
And while I was sitting in Dataw watching TV (Internet access spotty, if available at all. Arrrgh), I watched a story indicating that teenage unemployment is now at an all-time high. Why? Unemployed — and scared by the implosions of their retirement accounts — seniors are competing for and getting jobs that once went to Generation Acne. Here’s from a Business Week article, “Employers Avoid Axing Oldies But Goodies“:
Companies nationwide are laying off workers by the tens of thousands. But many are trying to spare the post-55 set from the ax, a reversal of the top-down trends in past waves of layoffs. They’re being driven by legal concerns—since boomers are in a protected age group—and by a need to keep experienced hands in place to keep the companies running and positioned for an upturn. “Seniority matters,” says Marcie Pitt-Catsouphes, director of the Sloan Center on Aging & Work at Boston College.
So while making projections about retirement is dicey, here’s what I was thinking about last week. And please remember that when I travel — much like when I scan Twitter, blogs and so on — I remain pretty much in my own echo chamber. And Dataw Island is one of those country club gated communities were people are well off by any stretch of that definition. Here goes:
- People are going to retire later rather than earlier. And for those approaching retirement — it appears to me that making the transition may not be as easy financially or emotionally as it seems.
- Many (most) people are going to find it increasingly difficult to retire and support their “working-life” standard of living. I have a defined-benefit pension plan from Goodrich. My wife has one with the Akron public school system. This guarantees us a certain amount of income (pending Goodrich and the Akron schools going defunct, which, and I digress, is the issue facing GM and Chrysler workers in the months ahead). We’re in the minority these days. This means most people are pretty much on their own to support themselves during a period of retirement that could easily last 30 or more years.
- Related to this first point: To generate about $40,000 in pre-tax income, you need about $1 million in savings. Add some modest amount of Social Security (here’s hoping, woot) — and then build that savings until you get to where you can living comfortably. But there is unfortunately no guarantee that your next egg will be there in total when you need it. During the past 15 months, the stock market debacle has wiped out more than $2 trillion in individual retirement accounts. And that’s why people nearing retirement are both scared — and thinking twice about it.
- And then there is the issue of how to fill your days; what to do with your time. My guess is that you can only play so much golf — and that the endless parade of daytime TV talking heads gets old after a while. So I think you are going to see a great push in this country for seniors to try to stay in the work force on their own terms — in part-time jobs, with companies that allow you to share jobs and so on. This also strikes me as a great opportunity for continuing education — if colleges and universities can get out of the 18-to-21 mindset. Many will embark on entirely new careers.
- Saying all this, at some point as a nation we are going to have to consider what promises have been made to the currently retired in terms of company-paid pensions, health care, Social Security and so on. This is going to be the issue that sends many to their garages in Detroit and elsewhere to fetch their pitchforks in the next few months. Wait and see.
So I had an enjoyable Spring Break — but I know I’m not ready to retire.
But some warm weather here would be nice.