Monday, October 08, 2012

Sorry Boomers, You'll Have to Work Past Retirement

A friendly kerfuffle between Calculated Risk and Craig Kamman has come up and, with what I've read and know, I'll have to side with Craig on this one.  Not only does his charts show more old timers participating in this economy, Bill's charts are projections from 2006 and 2002, not actual data.

Now, I am still willing to be corrected if somebody comes up with better data, but my anecdotal experience is confirmed with Craig's data, not Bill's.  In my various dealings with people in the 60+ range, nearly ALL of them HAVE TO work past retirement because they did such a poor job saving for retirement (or impoversihed themselves naively paying for their children's worthless Bachelors of Arts in Lesbian Transgendered Turtle Studies).  Additionally, this creates a traffic jam at the top and upper levels of management that chain effects down to the rank and file of employees.  Without old timers retiring, there's no movement or advancement upward.  They're log-jamming the careers of people below them, and ultimately, not allowing for any new hires or entry level positions.  Inevitably this becomes more discouraging to the youth than the elderly and the youth are more likely to participate less in the economy, loweirng their participation rate.  Plus they can always "live at home" while a 62 year old does not have the option of moving back in with his parents.

Until better data proves me otherwise, the drop in the labor force participation rate is largely due to younger people who can't find jobs in part because there are none and also in part because nobody hires people with Bachelors of Arts in Unicorn Sculpture.  It is not due to the baby boomers retiring.

7 comments:

  1. I've been seeing evidence of this locally. This, of course, causes issues for folks trying to get into the job market.

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  2. my mom refinanced her house a year before it was paid off, put the money into the stock market, lost it all, and now is "retired" and looking for a job.

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  3. Anonymous11:57 PM

    clicking on calculated risk takes you to craig k's site...

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  4. My dad wanted to retire last year, but now has no idea when he'll be able to retire. I look at it being his fault for not planning.

    Personally, I'm not counting on or planning on retirement.

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  5. ColoComment3:09 PM

    I am 66 & had planned on BEING retired now. I have far more in savings than the average Boomer, the principal of which is pretty much just now back to the level it was about a decade ago, having been slashed in the tech bust, recovered and then massacred in the financial bust.
    Now The Bernanke has decreed that prudent and rational savers may not earn anything on their savings. Oh goody. My retirement plans were predicated on earning somewhere between 3-5% -- scratch that for the next couple of years.
    Further, sometime, somehow, all that QE money is going sneak out into the marketplace and the value of each dollar of my prudent savings is going to plummet & presto, I'm looking at a retirement on a shoestring.
    So, when I'm 70 or so, and my savings wll buy me 1/20th what they would today, what am I going to do? Find a new job? Where?
    Hell, no -- I'm keeping the one I have until I've got some sense of where this country is going, what the economics of that path will be, and what adjustments I will have to make to survive & be financially independent.
    And I am not the only Boomer waiting..., waiting....

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  6. I figured that out many years ago. Now I'm trying to figure out what to do for a second career, I'm sick and tired of doing IT work.

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  7. sth_txs8:01 PM

    I don't think every single boomer improperly saved for retirement. Some may have done all the right things and may have achieved a modest pension in addition to SS, but because of inflation they may have to work. Health insurance is probably beating them up the most. Maybe even taxes and insurance if they are lucky enough to have a paid home.

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