Baby Boomers: Looking at retirement, not facing reality

Susan Reimer says baby boomers are deluded about their finances and their health

October 03, 2011|Susan Reimer

My husband and I have been stashing money in our 401(k)s since they were introduced in the 1980s, but, despite the miracle of compounding interest, he is still convinced we will be working at McDonald's — and eating our only meal of the day off of the steam table there — when we retire.

Like most "pre-retirees," we have been paying more attention to our health (weight, diet and exercise), but my husband is still planning to go swimming in shark-infested waters wearing a steak around his neck as soon as he begins to feel knee or hip pain, because there is nothing he dreads more than a long, slow slide into decrepitude.

He is the exception to the rule, according to new research sponsored by National Public Radio, the Robert Wood Johnson Foundation and the Harvard School of Public Health. Most Americans on the threshold of retirement are optimistic — apparently, foolishly so — when it comes to their expectations for their health and financial well-being in retirement.

In a series of reports, NPR compared pre-retirees — those 50 and older — with those who have retired, and the differences between expectation and reality are profound. We are incredibly optimistic about what retirement will be like, despite the evidence all around us to the contrary.

According to this research, a third of retirees report that their finances are worse than before retirement, and even more retirees report deteriorating health. More than a third report that they are not exercising or traveling, as they expected they would.

Yet we continue to be optimistic, as evidenced by the fact that almost all of us are still betting our future on in the stock market, despite the sickening roller-coaster ride that it has become. Add to this the fact that most people report that they are just guessing when trying to figure out how much money they will need in retirement.

Clearly, we are in denial.

We are, according to this survey, more tuned in to the fact that we will need money for some kind of long-term care, whether at home or in a facility. But we haven't a clue where that money will come from. Most of those surveyed said they thought Medicaid would pay, despite the fact that Medicaid has become the soft target for state and federal budget cutting.

"The mismatch between how people think the next 10 to 15 years is going to go and what current retirees experience is something that's very consistent," Jeff Goldsmith, author of "The Long Baby Boom: An Optimistic Vision for a Graying Generation," told NPR.

"There is no question that one distinguishing feature of our generation is this extraordinary, almost genetic optimism. And the poll results look to me like a lot of that optimism was drawn from a deep well of self-delusion."

So. We are not just clueless about what the future will look like, despite all the evidence around us; we are delusional — daydreaming about a world of robust physical freedom and financial independence, where we bike through Italy with our boomer buddies.

I can understand why.

After all, retirement is called the "Golden Years," and we expected that to refer to more than sunsets. We all have "bucket lists" now, and they don't include watching reruns of "Happy Days."

More to the point, some of us pre-retirees still actually have pensions, and Social Security and Medicare will probably outlast us — although perhaps not by much. And we have watched medical miracle after medical miracle during our lives, leading us to believe that they will find a cure for any disease before we succumb to it.

But I am not sure our optimism is delusional. In fact, I am not sure it is optimism.

It is more like the Scarlett O'Hara syndrome. "I can't think about that right now. If I do, I'll go crazy. I'll think about that tomorrow."

Susan Reimer's column appears Mondays. Her email is

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