Baby Boomers need to ease the transition to retirement

Leaving the workforce should be a careful process, not a sudden upheaval

October 24, 2011|Susan Reimer

"Near-retirees," as those of us of a certain age are often called, are getting a lot of mixed messages.

Fortune magazine reports that companies are hanging onto their baby boomers because they fear a brain drain — a loss of skills and institutional knowledge. In 1985, the magazine says, about 11 percent of people over 65 worked full- or part-time. This year, the figure is more than 18 percent.

However, while unemployment among older workers is 6.2 percent, significantly below the national rate of 9.1 percent, it is double what it was three years ago.

And the U.S. Government Accountability Office says that those 55 and older who lose their jobs wait an average of three times longer than they did in 2007 — from 11 to 31 weeks — before they find work.

Finally, a study commissioned by National Public Radio says we near-retirees are clueless about what retirement will be like and how much money we will need. One guess is that we will need to work until our early 70s just to meet basic living expenses and noncovered medical costs.

In an economy that continues to spiral downward, it doesn't make any sense to step out of the work force voluntarily, no matter what your age. And, in fact, maybe now is the time for the gray hairs to ramp it up a bit so employers don't make negative judgments about the value and productivity of older workers.

But it is also time, I think, to change the way we look at retirement: when and how we retire, and what we do afterward.

If Fortune is right and we are valuable because of what we have learned during our working life, we hold a trump card. But if we are expensive because our salaries have grown large over the years, or because our health is just shaky enough to cost the company work time or health care costs, we can easily be viewed as a liability and simply cut loose.

If people's homes and retirement savings are, like mine, at their lowest point of value in many years, we have little incentive to walk away from a paycheck until the economy recovers — if, indeed, it does in time for us.

If, however, we recognize that we are in the fourth quarter of life, as it were, we might feel that time could be better spent than in a cubicle. But at the same time, there are too many surveys that show retirees can slip quickly into depression and ill health: It can be tough on the mind and the body to go from the boardroom to building birdhouses in the garage.

Also, those of us who owe our place in the workforce to someone who left are aware that by staying, we are keeping someone younger from moving up.

These are a lot of moving parts, but I think we can synchronize them if we change the way we look at retirement — if it becomes less of an event and more of a process. More than 44 million of us will make that transition in the next 10 years, after all. That's a lot of incentive for change.

To begin, we need to give companies the flexibility to deal with older workers. Todd Buchholz, writing in a New York Times blog, said, "only the sharpest labor lawyer has a clue how to arrange a flexible benefits program for downshifting workers. Companies often outright fire workers before even considering rehiring them on a part-time basis."

The author of "Rush: Why You Need and Love the Rat Race" and a former White House economic adviser, he listed the Employee Retirement Income Security Act of 1974, the Age Discrimination in Employment Act, and some parts of health care reform as stumbling blocks to this flexibility.

If we recognize that the skills and knowledge of the older worker have economic value, we would be foolish not to find a way to transfer that value to younger workers, or to find a place for older workers as consultants or part-timers. There are reports that show workers stay in this transition phase for about three years before full retirement. That's not a bad deal for either party.

If we acknowledge that the old model — a gold watch at 60; working full-time one day and cut loose the next — is inconsistent with economic realities, life expectancy and the vigorous life that we envision for ourselves in our later years, we would revolutionize retirement the way we did the idea of mothers working outside the home.

It should be the case — and perhaps it will be again — that the U.S. economy is dynamic, not static, and that companies have the resources and confidence to expand their workforce and not simply replace the workers who depart. We are not spark plugs, after all.

But until that time, we need to find a sensible, humane and orderly transfer of the workforce, from one generation to the next and from one chapter of life to the next.

Susan Reimer's column appears Mondays. Her email is susan.reimer@baltsun.com.

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