I was recently reading a text that sparked my interested of how the cohorts of baby boomers will fare in their coming retirement years. This obviously depends on many factors, as the book pointed out, such as “the future state of the economy and capital markets, the timing and nature of labor force withdrawal, and reform initiatives.” Toward the end of chapter three, we see that the discussion of baby boomer retirement does not paint a bleak picture. The boomers seem to be doing as well or better than their parents. While there will be some form of benefit cuts or eligibility delays in the social insurance programs, researchers find that the boomers will enjoy “a higher standard of living then their parents did in retirement years, though it might fall short of their own pre-retirement standards.”

This text, however, was written before the current financial crisis began to take effect. I am interested in how the economic crisis will affect baby boomer retirement. An article in U.S. News and World Report by Emily Brandon (2008) addressed some of my questions. With any large crisis and heavy market loss time heals the wounds. The boomers, however, are the group with the least time to recover. She recognizes three ways the current crisis is negatively affecting the retirement of the boomers: stock market declines on their retirement accounts, falling home prices that are affecting their home equity, and decreasing job prospects that are reducing their chances of post-retirement labor force participation.

These three do seem valid concerns to me, but I am mostly interested in  addressing the last problem of decreasing jobs available to older workers. The article encourages older workers to go back to school and increase their skill set so they have a better chance of a job after 65. While this would indeed be helpful for some, it is unrealistic for many older adults. First and foremost, finances are a huge factor in determining if someone can go back to school. Therefore, the low-income individuals who would benefit most from a “new” job in their later-life are unable to get the necessary skills. Furthermore, various health conditions are more prevalent among these age groups, making it unlikely that they are physically able to get an education and return to the workforce.

The article also discusses how many older adults “experiment with retirement” and how, if they do not enjoy their leisure or cannot afford it, the often go back to work. This, however, is becoming more challenging and the opportunities scarcer. They comment on how potential retirees need to think twice before leaving their full-time jobs because it may be difficult if their change their minds.

I have a few thought on this discussion. First, I believe the article is trying to encourage older workers to remain at their jobs and in the labor force. This seems a good idea for a few reasons. Of course, the older worker themselves will benefit from extending their participation as the article points out that one additional year on average increases a worker’s annual retirement income by 9 percent. Therefore, the longer they work, the less they will need to depend on the government and social insurance programs in general. In addition, I was thinking the increased labor force participation, especially from so large a group as the baby boomers, may help slightly to sustain Social Security and Medicare. Indeed, if more people are working, putting off retirement, and putting into the system then we initially anticipated, this may soften the blow when the baby boomers enter their retirement years.

My second though was around the articles pessimistic outlook on part-time retirement jobs during these times. While it is possible that the availability of these jobs may by drying up, I can also imagine the opposite occurring. As organizations and companies attempt to reduce costs during this time, an experienced, knowledgeable, and part-time (which often means employers not paying costly benefits and health insurance) older work may be just what they would need. Granted this may depend on the skills of the older worker, or the companies and jobs that are thriving, but if the organization can cut back costs by hiring two part-time older workers rather than one full-time relatively young employee, perhaps the way companies view older workers may change. The opportunities may not be as flexible and the jobs may not be ideal, but it is possible that depending on how companies view and utilize older workers and how older workers market themselves, they could have a leg up during this financial crisis. Just an idea.

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