Baby
Boomers
are becoming aware that they are experiencing a
different type of retirement than the previous
generation.
Compared to other
generations, these confident and independent Baby
Boomers admit that:
+ They need more
money than their parents' generation to live
comfortably.
+ Their generation
is more self-indulgent than their parents'.
+ They will be
healthier and live longer.
Most Baby Boomers
(the cohort of Americans born between 1946 and 1964)
believe that they will still be working during their
retirement years. The oldest, born in 1946, will reach
62 in 2008 as they begin retirement age over the next
20 years.
8
in 10 Plan to Work at Least
Part-Time
Eight in ten say
they plan to work at least part-time--and others
envision starting their own business or working
full-time at a new
job or career--according
to an AARP Segmentation Analysis: Baby Boomers
Envision Their Retirement.
The fact is older
boomers, those born between 1946 and 1955, had a
median household net worth of just $146,050 in 2001,
according to an analysis of Federal Reserve data by
AARP. Half of this net worth was accounted for by
savings accounts, mutual funds and other financial
assets with the rest tied up in home equity.
Financial stress is
the dominant theme of a Putnam Investments survey of
2,000 people who retired between 1998 and 2002. Some
70% said they wished they had saved more, and 59%
regretted they didn't start investing earlier to meet
their higher-than-anticipated expenses.
According to a
survey by John Hancock Financial Services, the average
401(k) participant expects to retire at about 64 1/2
years old. That's up more than three years from a 2002
survey, and up nearly five years since 1995.
If these workers
carry through with their plans, they would reverse a
50-year trend toward earlier retirement. According to
the Bureau of Labor Statistics, men retired at an
average age of 62 between 1995 and 2000, and women
quit at 61 1/2. In 1950, the average retirement age
was 67.
Governments and
companies around the world are shifting retirement
risk to individuals. The troubling news is that
neither workers, retirees, nor the financial world are
adequately prepared. Few Americans realize how long
they can expect to live, or how much retirement will
cost. Don't expect to rely on the government or your
former employer as you plan for your retirement years.
There will still be a safety net, but proceed as if
you are on your own.
Today, many seniors
have been forced
back to work by financial
need.
The impact of the new global economy and the financial
effects of the lengthy bear market on 401(k) plans
have affected thoughts of retirement. A staggering
half of households headed by 50-to-59-year-olds have
$10,000 or less in their 401(k) accounts even as
public and employer retirement benefits are being
trimmed. With little net worth to fund retirement,
there is now an exodus out of retirement to working.
Most are healthy go-getters who would rather work than
scrimp and save in an idle retirement. By 2015,
estimates the National Council on the Aging, 20% of
the U.S. work force will be over age 55, up from 13%
in 2000.
This "phased
retirement" of Baby Boomers will shape the American
workplace and compensate for a severe talent gap due
to a shrinking supply of new workforce entrants.
Phased
retirement
will allow Baby Boomers to engage in work they
enjoy while providing needed income.
Managing money well
is important. But for many people, the most important
investment they can make during their working years is
in gathering the skills, education and contacts they
need for the work they want to do in retirement. Start
today asking yourself what kind of life you want to
lead? What
do you want to do?
Before retirement is
the time to dream about what you would love
doing--and--invest in that dream by being specific as
to what, where and how
to make your dream a
reality.
If you are about to
retire, now is the time to get smart by shaping your
phased retirement and deciding how you want to live
the rest of your life.
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Phased
Retirement Tips:
Get
Inspired!
For taking a
career
assessment.
Your
Retirement Guide
As Boomers seek the
next great chapter in their lives, they often feel
adrift. Many have lost their greatest fans: their
parents. At work, they sense that they're being
marginalized. Or they're bored. Unemployed
job-searchers
have become
the generation's most active
soul-searchers.
Near the end of
their career, it's clear many boomers don't have a
clue about what's next. 80 percent to 90 percent of
workers who believed they would enjoy retirement find
they feel unhappy and unfulfilled once retired. He
prefers to live in Florida to play golf all winter
long. She favors Maine. Neither know how to overcome
the difficulties of making their previous separate
lives mesh now that careers are over and retirement
has begun.
Retirement
is not an "on-off switch" where you weren't retired
and then you are.
"Retirement is as
major a transition as getting married or becoming a
parent," says Phyllis Moen, a University of Minnesota
sociology professor who has studied how couples
prepare for the sunset years. "Like becoming a parent,
retiring transforms the marital relationship, puts it
out of kilter for a while. You have to
renegotiate."
Figuring out how to
use close to 25 years in this new phase of life takes
some guidance--preferably working with
a
personal coach.
This work should be done when people begin thinking of
retirement, preferably 10 years before and no less
than five. Answering the questions of where you want
to live and how
you want to use these bonus
years to
have a meaningful life without regrets.
If there is one
thing we know about the Baby
Boomer generation,
its that their retirement will be very different from
the generation before them. Living 25 years of
leisure, watching TV and playing golf is bound to make
them restless, rudderless and without a purpose.
Later-in-life career
changers don't care about taking it easier and often
work as hard or harder than they did in the jobs they
left behind. A Merrill Lynch retirement survey of more
than 3,000 Baby Boomers reported that 83% intend to
keep working....and....56% of them hope to do so in a
new profession.
If you are seeking
a new
life direction,
like a career
change
or becoming
a
free
agent,
we should talk. Mid-life coaching conversations can
help you clarify where you are and where you want to
be---and how to get there. Our personal
coaching
plans
normally cost
$500 per month with a 3 month minimum and lower-cost
limited personal coaching services are available for
as low as $200 a month.
Coach
John Agno
knows that sometimes our thoughts aren't crystal clear
and we can be diverted from our goals. As a personal
coach, it is his job is to help people achieve greater
awareness, purpose, competency and well-being, which
often translates into greater compensation, job
satisfaction and better use of personal skills and
abilities.
Only
you know what's important in achieving your vision of
success during these 25 bonus years. However, we all
seek shared outcomes to provide a foundation for where
we want to be. Here is one client's definition of the
foundation for his success:
"Have
you ever watched, listened, and felt someone tuning a
guitar or other string instrument? That is what it is
like to have the good fortune of connecting with
John
Agno.
He is a living tuning fork and you're that string
instrument. Today, I have greater self awareness, am
more in step with my calling, and better able to
appreciate the journey, including the valleys, than
ever before. Thanks, John for helping me get attuned
with my life
signature."
Call 734.426.2000 (US Eastern Time Zone) or email
info@coachthee.com
for a free
20-minute telephone consultation to discuss where you
are heading.
The
decades-long trend toward early retirement among
50-something's may be over.
In 2000, about 69
percent of men ages 53 to 61 were working according to
a
University of
Michigan Institute for Social Research
Health
and Retirement Study
that surveys more than 22,000 Americans over the age
of 50 every two years. "Job
demands are
a factor in early retirement," says David Weir,
associate director of the study, "and these kinds of
changes in job characteristics bode well for keeping
older Americans working longer. The physical demands
of their jobs may not push people out as much as in
the recent past."
However, the
corporate definition of "over the hill" is getting
younger. Not too long ago, workers closing in on the
traditional retirement age of 65 were considered to be
past their primes. Now it's the 50-something Baby
Boomers who are holding on tightly to their full-time
jobs.
There has been a
dramatic change, since the mid-1980s, in the labor
force participation of older workers. In the 65-to-69
age group, about one-third of men and almost
one-fourth of women were working in 2004. The
percentage of men in that age group still working rose
to 33 percent in 2004 from 27 percent in 1994; the
percentage of women in that age group working rose to
23 percent from 18 percent. According to AARP, almost
one in three workers will be 50 or older within five
years.
The AARP's list of the "Best Employers for Workers
Over 50" is published in September and rewards
those firms that offer training, phased retirement or
return-to-work after retiring programs. AARP's
Deborah Russell says more than 200 companies have
asked for registration papers for the 2004 contest;
only 73 applied in 2003.
The Best Years of Their Lives
Retirement is
increasingly regarded as a transition to another work
life--a work life that is more in tune with who
you are and what you enjoy doing. Before retirement is
the time to dream about what you would love doing and
invest in that dream by being specific as to what,
where and how to make
your dream a
reality.
In 2000, 37% of men
and 31% of women age 55 to 64 were employed full or
part-time while receiving pension income, according to
investment firm TAA-CREF. Those proportions are likely
to go higher with 8 out of 10 baby boomer saying they
plan to work in retirement according to an AARP
study.
A 2003 survey by the
Society for Human Resource Management found almost
seven in ten (68 percent) organizations say they
employ older workers who have retired.
A survey by Allstate
Financial of Northbrook, IL of 1,004 Baby Boomers,
born between 1946 and 1961, found 82 percent believe
that retirement will be more fun and rewarding than
their parent's retirement. Others believe it will be
more active (65%) and the best years of their lives
(63%).
The population
bubble caused by the baby boom keeps floating up:
Proportionately, there are more people over the age of
50 than ever before. Most Baby Boomers (the cohort of
Americans born between 1946 and 1964) believe that
they will still be working during their retirement
years. Eight in ten say they plan to work at least
part-time--and others envision starting their own
business or working full-time at a new job or
career--according to an AARP Segmentation Analysis:
Baby Boomers Envision Their Retirement.
This
"phased
retirement" of
Baby Boomers will shape the American workplace and
compensate for a severe talent gap due to a shrinking
supply of new workforce entrants. Phased retirement
will allow Baby Boomers to devote more free time to
community service/volunteer activities and their
grandparent role by living near at least one of their
children.
A greater percentage
of those over 55 are working today than a year ago. In
part, because older workers are prized for their
corporate experience, personal relationships and
stability. "It's not at all surprising that we're
seeing people who have come from the Old Economy
set
of values becoming more attractive again
now,"
says Barry Honig, president of New Jersey-based
executive search firm Honig International.
According to a
survey by ExecuNet, an executive career services firm,
61% of senior managers believe age discrimination is a
bigger problem than it was just one year ago---and a
whopping 84% say it starts around age 50. If you are a
Baby Boomer, looking forward to a phased
retirement,
suggest you check out
these
job
seeking tips.
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our Podcast:
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Inc., PO Box 2086, Ann Arbor, MI 48106 (734) 426-2000
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