Baby Boomers Reviving The Economy?
Baby Boomers Reviving the Economy
For generations, the dream retirement was one spent in warmer climates, on the beach and often walking distance from a golf course.
Chris Farrell, a senior economics contributor at Marketplace, is among those now laughing at the idea. Farrell, 61, is the author of “Unretirement: How Baby Boomers Are Changing the Way We Think About Work, Community and the Good Life.”
As people are living longer and in better health, they’re working longer, too. And opportunities for the 55 and up group are going way beyond the stereotypical part-time gig at the local supermarket, he says.
Farrell, who says he is still far from retirement, recently spoke with The Post about the modern retirement. This has been edited for length and clarity.
You say in your book that what scares people the most about getting older isn’t aging — it’s retirement. Why is that?
Chris Farrell, author of “Unretirement: How Baby Boomers are Changing the Way We Think About Work, Community, and the Good Life.” (Dani Werner.)
A lot of us haven’t saved enough for retirement, and we’re well aware of it. And I don’t think people haven’t saved enough because they couldn’t resist the mall or they just had to use that credit card. It’s expensive to educate kids and a lot of times people buy a house in a good neighborhood that they think will let them send their kids to a good public school. They spend a lot more than they want on their housing. Also, many private sector workers don’t have access to a retirement savings plan at work.
So then the story is if you don’t have $1 million your standard of living is going to come crashing down. Then the story that you’re going to have too few young people supporting too many older people. What my book is saying is I think this is fundamentally wrong. What people are doing instead is thinking: What does retirement mean? What does my last third of life mean?
What’s the image of working longer? We don’t really have that narrative.
What is the single thing people can do to better prepare for retirement? Save more? Put it off for another year or two?
If you think about our whole discussion about retirement for the past 25 years, it’s really been dominated by the rise of the 401(k). So when we talk about retirement and preparing for retirement, it’s about how much do you have in stocks? How much do you have in bonds? Depending on what you save, what kind of withdrawal rate can you have? There’s all this discussion around asset allocation. And saving is important.
But if you’re in your mid 50s and you’re thinking about retirement, the most important question is not “What is my number?” –which has been the question. The question is, “What do I want to do next?” And it turns out that’s not obvious to a lot of people.
That’s where I think the sabbatical comes into play. The most valuable asset an older person has is their network. The people that they’ve known over the years. Tap into that and start exploring “What can I do next?”
What do older workers have in common with millennials?
The 20-something graduate comes talking to you and they’re exploring what it is they want to do. They want a job. They want to be earning an income. No, they don’t want to be living in their parents’ basement anymore. They also want to do something that has meaning, something that they feel makes a difference.
And the only difference between the 60-something worker and the 20-something worker is that the 60-something worker knows time is short. For the 20-something worker, time is infinity.
So the fact that you know time is short becomes almost paralyzing. It’s not always obvious to people.Most people don’t reinvent themselves. You’re not going to go from working in a cubicle to owning a winery in Napa Valley. So it’s about thinking about the skills and knowledge you developed over the years.
You take what you know, you take your skills, but you go to a different sector in the economy.That’s exciting. You meet new people. You don’t start your own business where you drain your 401(k) and then one year later you’re broke. You have to be smart about it.
You also talk about the personal connections people get from their jobs.
Work is a social institution. When someone has a baby, you get excited. If someone gets divorced, you help them through it. When you look at the surveys of people who are retired and ask “what do you most miss from your pre-retirement years?” You might think money. But it’s pretty far down. No. 1 is their colleagues.
There’s this idea that if people work longer they could be taking opportunities from others who are looking to move up in the workforce. What is your response to that?
My response to that is that until recently we’ve gone through the worst labor market since the 1930s. But overall, I think older workers and younger workers are on the same boat. When older workers are getting jobs, younger workers are getting jobs. When older workers aren’t getting jobs, younger workers aren’t getting jobs.
The analogy I draw is the women’s movement. If you think back to the 1970s, the early 1980s. There was a lot of concern that as women enter the market there’s going to be a lot less opportunity for men. But what happened is we just created a lot more jobs. The economy got bigger.
So I think overall, more older workers is not holding back younger workers. As older workers are going out and starting firms, guess what, they’re creating more jobs for younger workers.
For the past five years a lot of employers have been saying to do more with less. My suspicion is that a lot of aging boomers are going to say goodbye. But they’re not going into traditional retirement. They’re going into their own business or to be a consultant. They’ll have informal partnerships with people they know. I think there’s going to be a lot more job movement than that idea of the older worker sitting in their cubicle for another 30 years.
You think older workers are contributing a lot more to the economy.
By continuing to work, their employers are better off and they’re continuing to be productive and to generate revenue. But the other part of it is there’s real stereotypes about older workers — that they’re not productive.
When you start looking at the arts you find a lot of people get more creative as they age. Then you look at the law. Then at doctors. And then you start looking at management, at skilled craft people.
All of a sudden you start looking throughout the economy and you see there are a lot of really productive, creative people who are seniors. We need to break down this stereotype.
Category: Baby Boomer, Retirement Planning
