Many baby boomers are reaching the age of retirement but aren’t retiring (as expected). In a recent conversation on social media, Boomers shared why they still work and are not in retirement. Their responses — from money headaches to lifestyle tastes — tell us much about the pressures and decisions people are dealing with today. This slide show explores a few of the explanations Boomers offered, helping clarify what goes behind their mind.
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Retirement Is Not Affordable
“Many of us can’t afford to retire. While we’ve been ‘sucking up all the resources’ so the younger generation has to go without, we got a few surprises along the way that most of you are unaware of. Around age 40–50, many of us Boomers found out that the pensions we were promised when we were hired were being eliminated. Those older than us and nearing retirement got grandfathered in, but the more junior employees saw our pensions go away. Instead, they came out with something called a 401k Plan. This was in the late 1980’s to early 1990’s. At first, the companies told us they would match our contributions to the plans dollar for dollar. It wasn’t long, however, before they cut it to 50 cents on the dollar – then less; a classic case of “bait and switch”. Of course, there was a cap on percentage of income one could contribute, as well as a cap on how much the company would contribute, as well.”
Although the boomers are often considered to be a generation that had it easy, many still find themselves jumping financial hurdles. Companies cutting pensions or changing retirement plans made it hard for them to save enough for the future. Many entered the workplace with certain expectations that were suddenly taken away. Now, they have to get by with much less than they had figured.
Retired With Side Hustles
“Who said we weren’t? Most of my friends are retired. Most of us also have side hustles because between 65 (or, in some cases, 62) and death lie a whole lot of years that need to be filled with something other than daytime TV and day drinking.”
People often do not want to stay idle after retirement. Enterprising boomers often start side hustles or money-making hobbies. Money is not the only motivator – they also want to stay busy. They have a long life ahead of them that needs to be filled with purpose.
Not Enough Savings
“They can’t. Many boomers didn’t save money for retirement, or if they did, they didn’t save enough, either because they miscalculated or because they didn’t make enough money to save enough money so that they could retire.”
Not all boomers had the chance to save enough. Others saved too little, or failed to save in the first place. Between the cost of living, life events and crappy jobs, the ability to save was just not there. The result? Many boomers find themselves unable to retire at all.
Enjoy Working
“We enjoy working. We talk with old friends and make new ones. Right now I’m laying on the couch and that is the one action I try to avoid. so I work part time. It fills my needs.”
Actually, there are boomers who enjoy their work and do not plan to retire. To them, working isn’t just for the money but also how they keep in touch, socialize and be useful. They think working part-time or staying busy will provide for them a feeling of purpose.
Fierce Competition
“I’m a boomer who was born several years after the baby boom started. I graduated from high school into a recession (sound familiar) and had to compete with millions upon millions of other baby boomers for what few jobs there were.”
Most Boomers joined the nation’s workforce during an economic crisis. This was a time when finding a job (and keeping it) was tough. So they are used to fierce competition and they are not willing to let go of the jobs they found with so much hard work.
Higher Cost of Living
“Baby boomers cannot always afford to retire. They are expecting to live longer than the past generation. The cost of living has climbed steeply during their lives.”
Life is a lot more expensive these days than when boomers first were starting work. From housing to health, everything is expensive. While boomers had higher savings rate, costs keep increasing. The money is not enough to cover their living standards, especially with their longer lifespans.
No Pension
“No pension. Lost their job at age 50 due to downsizing or offshoring or just plain company greed. Greatly reduced pension after company bankruptcy, see airlines.”
A lot of boomers thought they were going to retire with a pension. Some, who were promised a comfortable retirement based on defined benefit pensions, were left high and dry after being laid off or outsourced overseas to companies that soon disappeared. In many cases, people who did receive pensions in retirement saw the value of their payouts slashed because their employers fell on hard times.
Companies Phasing Out Pension
“They began phasing out dedicated pensions and those that do have them are finding them cut back as the companies deliberately went out of business so they wouldn’t have to pay into them.”
Corporations started cutting back on pensions by phasing them out or shrinking their contributions. Some companies even went out of business to avoid paying into pensions. That meant boomers were left with less retirement savings than they expected — and had to keep working.
Supporting Kids
“We helped pay for our children’s education and their weddings and helped them through their starts in life. But we took money out of our savings to do that and the kids aren’t ready to pay us back yet.”
Paying for kids to get through school, weddings and early careers bled the accounts of so many boomers. They invested money in their kids, often at the expense of their own retirement funds. With their kids just beginning to establish themselves, those same boomers are now waiting for their finances to bounce back.
No Other Options
“Last year, my beloved neighbor’s husband died. They were both retired and owned a house (fully paid). The lady never worked (homemaker). After her husband’s death, she doesn’t get any pension, just $600–$700. She has to pay 300–400pm utilities and 400 pm property tax plus $500 pm for her food. Can she manage to pay $1300–1500 pm with her $600 pm? NO.” She has to work.”
Life events make it simply impossible for some boomers to stop working. A spouse dies, or unexpected costs come up, and they find themselves in a very different financial state.
No Inheritance
“I retired, but I’m one of the lucky ones owing to an inheritance. Many of my contemporaries cannot afford to retire. They didn’t inherit money, lived paycheck to paycheck for decades, didn’t save money, or had their savings wiped out in the crashes of 2001 or 2008.”
Not everyone is lucky enough to inherit money. Many boomers lived paycheck to paycheck and couldn’t build up significant savings. Some lost their savings in stock market crashes. Without an inheritance or a financial safety net, there is just no way for them to retire comfortably.
Work Is Better Than Boredom
“There are two distinct reasons that may keep people at work. One is that they cannot afford to retire, the other is they may get far more out of working than out of mooching around doing bugger-all.”
Some boomers stay in the workforce not just for pay, but because they like what they are doing. They find it better than getting bored and doing nothing. Work gives some people meaning.
Lots of Work Other Than a Job
“I’m retired from my teaching career. I’m not retired from running the farm I bought for myself for my 50th birthday. I’m not retired from making a very good living trading stocks and bonds.”
In many cases, retirement does not mean doing nothing. Boomers may continue working on some level even after they leave their main career. They can be a farmer or even invest in stocks to make a living. Retirement is changing, and for some, this will mean transitioning to new roles rather than stopping work entirely.
Source: Quora.
Disclaimer – This list is solely the author’s opinion based on research and publicly available information.