Baby Boomers, those born between 1946 and 1964, have changed the rules as they moved through life. Now entering retirement, they are again rewriting the rules. (For more, see How Baby Boomers Will Change the Way Others Retire.)
It Started with Social Security
In 1935, when Social Security started, life expectancy was about 62 years old, and the Social Security early retirement age was 62, while the full retirement age was 65. No one was expected in 1935 to live much past 65, yet people did. One of the first people to collect Social Security was Ida May Fuller. She worked for only three years under the Social Security program before retiring in 1940 at age 65. Her monthly check, based on three years of earnings, was just $22.54 initially, but she lived until 1975 and died at the age of 100, collecting $22,888.92 during her retirement life.
Ida’s story is still relatively rare. Today the average life expectancy for a man who has reached 65 is 84.3. For a woman who lives to 65 the average is 86.6. That’s a lot of time to spend in retirement playing golf, tennis, pickleball or whatever else someone starts doing daily when they first retire.
Beating Boredom and Rejuvenating the Economy
Baby Boomers are finding the idea of spending 20 years playing games and hanging out is pretty boring. As they get creative about how to fill their day, many are choosing to go back to work – a movement being dubbed “unretirement.”
Chris Farrell, one of the proponents of “unretirement” and the author of “Unretirement: How Baby Boomers Are Changing the Way We Think About Work, Community, and the Good Life,” writes: “The demographics of despair start with the observation that many aging boomers haven’t saved enough to enjoy a comfortable retirement. The emphasis quickly shifts to the fear that the swelling ranks of aging boomers will drain the economy of its dynamism, dragged down by too few workers supporting too many elders. The forecast grows bleaker with the expectation that a less than robust economy will make it that much harder to pay the tab for Social Security and other old-age programs. But hold on. That same aging boomer population offers the promise and the opportunity of rejuvenating both the economy and our communities.” (For more, see The Financial Implications of Working in Retirement.)
The New Work Formula
Most Baby Boomers are generally not going back to full-time jobs; instead, they are choosing part-time work in something they enjoy doing or are freelancing to have even more control of their time so they can travel or spend extended periods with family. You can hear Farrell’s podcasts of people choosing this route, including a grandma who drives an Uber car and a person with a passion for vintage motorcycles who turned that passion into a business.
There's a generational mashup happening: Baby Boomers and Millennials (born between the early 1980s and the early 2000s) are choosing similar routes in the world of independent contractors and freelancers. “A number of factors both economic and cultural are causing the independent workforce to swell. Technological advances and globalization have greatly contributed to the erosion of traditional work arrangements. The private sector’s need for speed and adaptability is increasingly incompatible with maintaining a large, full-time workforce. And, of course, the Great Recession has put to rest the notion that there is such a thing as a stable full-time job,” writes Sara Horowitz, founder and executive director of the Freelancers Union.
Many Boomers lost their jobs during the Great Recession and were not able to find full-time employment because of age discrimination, which today often starts as young as 50 years old. The move toward independent contracting and freelancing was a necessity for Boomers initially, but now it has become the first choice for many, as they enjoy the flexibility of being their own bosses.
The Bottom Line
Retirement today does not have to mean dividing one's time between golf or bridge and visiting grandkids. New options for post-job life have expanded massively – helped by changes in technology and work opportunities that make new ways of working not just possible but necessary for more and more of us. Today's Boomers are leading a wave that will only widen over time.