The past few years of economic turmoil led many experts to predict that Baby Boomers would be staying in the workforce much longer than expected, as many lost their nest eggs when stock prices plummeted. But it seems that Boomers are again showing us that they’re not predictable: A recent report in The Seattle Times indicates that the first wave of Boomers reaching traditional retirement age have wasted no time hanging it up and setting out on their retirement journey.
MetLife wrapped up a follow-up to a 2008 study looking at trends and retirement patterns, finding that 59 percent of the first group of Boomers to reach retirement age have at least partially retired. Forty-five percent are fully retired, while 14 percent have retired from their careers but are currently holding part-time employment. They’re happy about it, too: About 70 percent of those retired say they’re enjoying it greatly, while 96 percent report liking retiree status at least a little.
And the retirement wave doesn’t show any signs of slowing down. In fact, 37 percent of the group still working have plans to retire within the next year, and 63 percent are already collecting Social Security retirement benefits. The vast majority of Boomers who have reached retirement age say they plan to retire by the age of 68.
However, just because they’re moving forward with their retirement plans doesn’t necessarily mean they’re still in the financial position they were set up for a decade ago. It seems most Boomers are taking an optimistic approach to retirement, hoping that financial circumstances work out for the best or they’ll find a way to make things work. And some experts are skeptical about the viability of this approach. For instance, a study conducted last year by Vanguard, a mutual fund company, found that the average value of 401(k)s for individuals 65 and older was just $163,000 — hardly enough to sustain a lifestyle for 20 to 30 more years.
The Wall Street Journal also investigated this issue last year. Their findings indicate that “the median household headed by a person 60 to 62 with a 401(k) account has less than one-quarter of what is needed in that account to maintain its standard of living in retirement.” Grim news for those with just three to five years left to save.
So what are Boomers to do? Many have worked 40-plus hour workweeks for at least 40 years, many of them 50 years or more. Retirement is the one point in life most members of the working class look forward to: The time when they’re able to put their working years behind them and live life to the fullest. Delaying that opportunity for five or ten years could mean your health may have declined and you might find yourself not able to do the things you’ve always dreamed of.
Many choose to throw caution to the wind and move forward with their retirement plans, thinking they’ll get another job if they find their savings and pension payments (if any) aren’t adequate to maintain their lifestyles. The problem with this approach is that unemployment rates are still high, and older workers are finding it more difficult to get a job post-retirement. Even companies who are already employing older workers are offering buyouts and other incentives to encourage early retirement. That’s because many older and more-experienced workers are earning significantly higher wages, especially those who have been with the company for many years.
So what’s your plan for retirement? Are you delaying it to boost your nest egg or jumping in with full force?