By: Kimberly Durment Locke
There’s no doubt that many in the Baby Boomer generation, those born between 1946 and 1963, have retirement on their mind. According to marketrealist.com, more than four million Boomers have retired since 2008 and that number is steadily rising each year.
However, there are still a fairly high percentage of Boomers who are continuing to work to age 65 and beyond. According to a recent Bloomberg article, some 32 percent of Americans 65 to 69 were employed as of mid-2017. Looking at those past age 70, a growing number of these seniors are deciding not to retire or are unable to retire. As of mid-2017, 19 percent of 70-to-74-year-olds were working, which is an increase of 11 percent compared to 1994.
Why is this?
While there are several reasons why some Boomers continue to work into their “golden years,” here are four of the more common ones.
Reason one: Residual fallout from the severe stock market declines in 2008, 2009, and 2011.
Most Boomers can’t forget the market crashes of these years that resulted in steep drops in the Dow Jones Industrial Average. Market declines during these years resulted in many investors losing high percentages of their retirement savings. Let’s say a working investor had $250,000 in a 403(b) or 401k and that portfolio experienced even a 20 percent loss or $50,000. It would take that same investor who is saving six percent of their annual salary of $100,000 or $6,000, roughly eight years to recoup the loss not factoring in any gains or additional losses during that same period.
As the market tumbled during these years, many decided to “ride it out” only to find that a new bottom or correction was about to happen. The mantra, “you can’t time the market,” is certainly true for most of us average investors, at least. However, some of the cleverer investors decided to reduce their holdings in the riskier stock portfolios and put that money into bond funds and, in some cases, precious metals or real estate. It’s doubtful, however, that they completely escaped the market losses.
Since January of this year, the market has fortunately reached all-time highs more than 30 times, as of press time. If that impressive performance keeps up, those still in the market should fare quite well, at least for the time being.
Reason two: Assisting aging parents with in-home care and housekeeping expenses while still raising their own children.
Boomers who were born near the tail end of this generation fall in what has been termed, “the sandwich generation.” The term aptly describes those Boomers who are taking care of an aging parent or parents while supporting their own children. According to the Pew Research Center,
more than one of every eight Americans ages 40 to 60 is both raising a child and caring for a parent. Needless to say, that’s not easy on the pocket book.
These Boomers may now be assisting their aging parent(s) by helping offset expenses associated with housekeeping and home maintenance and repairs. While these costs may add up to more manageable amounts of say, $1,000 to $5,000 annually, there are often much higher expenses the Silent Generation, those born between 1923 and the1940s, did not anticipate and may need help with. Couple these smaller financial needs of the older generation, who may not have anticipated living into their 80s and beyond, with the fact that only a minority of these aging parents have purchased long-term care insurance. This leaves the majority of Boomers’ parents without a way to cost-effectively cover the expenses incurred by hiring in-home care for even minor medical occurrences such as a broken bone or while recovering from surgery.
According to the Forbes article “Boomers, Millennials And The Long-Term Care Divide,” 70 percent of Americans who reach age 65 will need some long-term care for an average of three years.
The stakes get even higher when there is a need for a family member to enter an assisted living facility or nursing home. The same Forbes article cites an Aging.Care.com survey that finds 25 percent of Alzheimer’s caregivers spend more than $4,000 each month (that’s close to $50,000 annually) on their loved one’s care.
The article also points to a Cost of Long-Term Care Survey performed in 2015 by the financial company Genworth Financial that lists the staggering and ever-increasing costs of a variety of elder care services. According to the survey, homemaker services and home health aides were charging $20 an hour, adult day care was $69 a day, assisted living facilities were charging $43,200 annually, and nursing home costs were running a staggering $91,250 a year. Those costs are only expected to rise in the years ahead.
Millennials, the survey found, are the most likely to say they felt the burden of providing long- term care for their parents or grandparents will be their responsibility.
Reason three: Some adult children of Baby Boomers are not moving out of their parent’s home or they are returning home due to the high cost of living, loss of a job, or need to begin or complete their college education.
There’s no doubt the job market has become increasingly competitive with respect to education demands. Millennials are those most likely to still live at home with their Boomer parent(s) given their place on the generational ladder.
For younger Boomers this can translate to not only covering or helping cover the cost of college but perhaps even post-graduate studies. While these same students may be able to work part-time as they pursue their education, it’s their Boomer parents who are shouldering a majority of the expenses.
Only about half of first-time college freshmen who enrolled in 2006 have graduated by 2012, according to the National Student Clearinghouse cited in a 2013 article in the New York Times.
It’s taking undergraduate students a lot longer to complete their degrees often times due to overcrowded campuses where students have a tough time getting the classes they need to complete their course of study.
Reason four: The opportunity to pursue a new career field or interest whether there’s a paycheck or not. Let’s be honest, how many of us have actually been able to pursue the career path we dreamed about? Sure, there are those out there who were inspired by that certain fifth-grade teacher or the family doctor who were able to follow in their role model’s footsteps.
For those of us who couldn’t, for one reason or another, work in our preferred career field, retirement may be the perfect time to at least get a taste of it. Maybe you’re not interested in going back to college to get that teaching credential but working as a teacher’s aide or even a school volunteer would give you a sense of purpose and fulfillment that you’ve been longing for and that you didn’t get from your nine-to-five job over the past three decades.
As far as the doctor scenario is concerned, we know that going back to school to earn that medical degree may not be feasible at this stage of life. However, there are other options in the medical field such as office assistant or hospital volunteer where your passion for helping others will shine through. You may not be able to use a stethoscope, but you will be able to offer others a warm smile and a caring heart.
Kimberly Durment Locke is a freelance writer living in the Los Angeles area who enjoys writing about a variety of topics and issues. Her articles have appeared in the Cherokee Phoenix newspaper, Winds of Change magazine, and Pasadena magazine. She is a registered Cherokee Nation citizen, and also is of Hispanic and European ethnicities.