Baby Boomers are Working Longer, But Why?

Baby Boomers are the largest generation in the history of the United States, and according to the National Center for Health Statistics, they’re also the longest-living generation. And as more of them reach their retirement years, more and more are staying employed. The Pew Research Center reports that a considerable percentage of Americans aged 65 and older still work full-time, while 5% of people aged 75 or older are employed full-time.

With the growth of the aging population in the U.S., more and more Baby Boomers are looking to continue working past retirement age. Nearly one in five people over the age of 75 are still working, with some even saying they work because they enjoy it. This begs the question: why do so many Baby Boomers want to keep working? This post will explore why Baby Boomers are working longer in today's workforce. Read on to find out more.

Common Reasons Why Baby Boomers are Working Longer

There's a myriad of reasons why a considerable percentage of baby boomers choose to continue working even after their retirement age. If you're one of them, you'd agree that the following are some of the most common reasons why working after retirement makes sense:

• Inflation

• Underemployment

• Rising health care costs

• Investment or stock losses due to market uncertainty

• Lack of retirement savings

• A possible financial collapse

• Growing income inequality

While none of these pose an immediate threat to baby boomers' retirement security, they can affect when people choose to retire. Employers have also increasingly turned to older workers because they're cheaper and more reliable than younger employees.

But there's also another possibility causing many boomers to stay in the workforce: an improving economy. As state and local governments lay off employees to balance their budgets, more boomer job seekers are finding jobs than at any time since 1999, according to estimates from Challenger Gray & Christmas Inc., a Chicago outplacement firm. It’s easy to feel confident about your golden years if you’re in your early 50s or 60s – but what if everything goes wrong?

The uncertainty that boomers are facing may prompt you to work longer to continue generating an income. This trend will likely continue until certainty returns to financial markets and Americans gain a better understanding of how much money they need to maintain their current lifestyle in retirement.

Worst Economic Periods and Fewer Retirement Savings

Baby boomers have just lived through one of the worst economic periods in history. Not only did they lose out on returns from their 401(k)s and other retirement investments, but they also may have lost their job or had to take an early-retirement package because of tough economic times. As a result, many boomers entering retirement face more financial uncertainty than previous generations. Some boomers believe they can't afford to retire and choose to continue working as a result.

We have fewer retirement savings than previous generations, fewer financial resources, and longer life expectancies. All of these make it harder to retire. Most people are worried about running out of money in their retirement years or taking a job well below their career level to supplement their income. But many baby boomers don't even plan on retiring at all.

Lack of Retirement-Planning Advice from Professionals

Many boomers have found themselves in a lurch when it comes to retirement planning. Compared to earlier generations, many boomers struggle to understand how best to save for retirement and how much they should be socking away. Without a good plan in place, they're likely to work longer than necessary simply to build up a nest egg that allows them to live comfortably during their golden years. This is what many experts call financial amnesia – You keep working out of fear rather than actual need.

The average person doesn't have access to detailed retirement-planning advice from a professional. Without these insights, it can be hard to prepare for decades of life after work. Since retirement planning affects every aspect of your life, you don't want to rely solely on generic financial advice or cookie-cutter solutions. Instead, seek out trustworthy guidance from a team of experts who can tailor their recommendations to your specific situation and walk you through each step of the process.

The Retirement “Risk Zone”

The "Risk Zone" is where you don't get enough income to cover your living expenses but are also not financially comfortable enough to stop working. This could be anywhere between five to ten years before and after retiring. Keep in mind that this period can make or break your retirement.

The combination of job losses and a volatile stock market has left many baby boomers concerned about their ability to retire when they want to. Whether you're 40 or 60, managing your retirement risk is becoming more critical by the day. The risk of a flop in standard times evolves to the risk of bankruptcy in the Risk Zone. However, if you're lucky enough to survive through your retirement Risk Zone without losing money, you'll probably have a pretty good retirement.

The Retirement Crisis

There are about 78 million baby boomers, but there has never been an awful time like this, with most of them spending the decades in the 21st century in "Risk Zone." 70% of these boomers have saved less than $300,000. This is known as the "retirement crisis," and it's real. So why has it come to this crisis point? Below are several reasons:

• Interest rates are unbelievably lower. This isn't good because you can't be safe and make money if you want to save. You've got to surrender returns on your investments.

• Stock prices are higher than ever before. This isn't pleasant too.

• So much money has been printed than ever before — not even close for infrastructure, QE, COVID relief, etc.]. The country is approximately at $13 trillion. The government has disbursed more than twice we spent on World War II, i.e., if you convert the 1945 bucks into 2021 dollars.

• The wealth divide is incredibly more significant. Lots of the quantitative easing funds proceeded to wealthy individuals. The wealth divide is about social unrest, as seen on the daily news.

• There have never been so many people in the retirement Risk Zone simultaneously like today.

Other Underlying Threats

There’s also the threat of nuclear predicament explicitly initiated by Iran and North Korea. For this reason, there have been various cases such as entitlements running out of cash, Federal Reserves running out of ammunition, the world debt crisis, and, unfortunately, the baby boomers being at the risk of retirement Risk Zone.

So when is this big crash coming? No one knows precisely when or in which decade, but it'd be lucky for boomers to survive such a spell without a considerable market loss. That said, many baby boomers, especially those with no investments or savings, will continue working even after their retirement year to keep a steady income and save for the worst days.

Bottom Line

There has been much speculation about why the largest generation in U.S. history, the Baby Boomers, are choosing to continue working past their retirement age. They're staying on the job longer than previous generations—and their reasons may surprise you.

Nearly half of employed Boomers plan to continue working beyond age 65, and over one-third expect to keep working past age 70. Even as they approach the traditional retirement age, many Boomers seek ways to increase their work-related satisfaction, remain connected to the workplace, and prepare for financial security in the future.

Article by: Makefloridayourhome.com

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