After the Crash, A New Realism Emerges About Retirement

by Mark Miller

Boomers are focusing more on saving, planning and sharing, replacing materialism with a renewed search for meaning.

Three months after President Obama’s inauguration, one phrase from his speech on the steps of the Capitol comes back to me often: “The time has come to set aside childish things.”

That line, which quotes loosely from 1 Corinthians:13 in the New Testament, refers to our collective need to wake up to the realities and challenges facing the country.

Where retirement planning is concerned, childish behavior wasn’t hard to find before the economic bubble burst in late 2008, and the ensuing economic crisis has provided a loud wake-up call.

The huge generation of baby boomers now approaching retirement has been forced to stop kidding themselves. Housing values and stock prices won’t appreciate forever. Home equity can’t be raided at will to finance expensive travel and second homes–at least not risk-free. Saving money for retirement does require setting of goals and planning.

Boomer retirement has been a train wreck waiting to happen for some time now. And in the post-bubble environment, most of the talk has focused on the pain that’s immediately before us: decimated 401(k) and housing values, foreclosures and layoffs.

That’s the close-up on the crisis. But step back and you can see the beginning of some positive changes surfacing in the way Americans think about retirement, and in expectations about how they will live in the years ahead.

A Silver Lining?

“People are not just looking at what they have but at the meaning of how they will live,” says Laura Rossman, principal of OutsideInsite, a consulting firm that specializes in boomers and seniors.

“They’re realizing that they may need to put off retirement and be realistic about what it takes–not everyone can retire at 58. The market drop is so severe, and no one ever expected anything like the severity of the shock. It is changing some behaviors, and at least for now, people are resetting their views.”

This new realism surfaced in a striking set of data released this month by the Employee Benefit Research Institute (EBRI), a research organization focused on health, savings, retirement, and economic security issues. The headline finding in EBRI’s 19th annual Retirement Confidence Survey (RCS) is that just 13 percent of Americans feel confident that they’ll have enough money to live comfortably in retirement. No surprise there.

But some of the other findings were eyebrow raisers. Workers say they expect to work longer to secure their retirement. Twenty-eight percent of workers say they have changed their target year for retirement in the past year. And within that group, 89 percent say they did so in order to boost their financial security. More people also say they plan to supplement their income in retirement by working–72 percent compared with 66 percent just two years ago.

Saving More, Investing Smarter

The RCS also suggests people are behaving more like grownups when it comes to money management. Among those who’ve lost confidence in their retirement security, 81 percent say they have reduced expenses, and 43 percent have changed the way they invest. Twenty-five percent are saving more money and an equal number are now seeking advice from financial professionals.

Finally, EBRI reports that among all workers, 75 percent say they have saved money for retirement, one of the highest levels ever measured by the RCS.

Rossman sees evidence of broader change in the way people are living. There’s less focus on moving away in retirement–in part because real estate markets won’t permit it. But she also sees a recognition of intergenerational dependence and caregiving.

“It wasn’t that unusual in the 1940s or 1950s to see families living together across generations. It’s hardly a new concept to have grandma in the house or kids sticking around longer. But now we’re starting to see a new openness to sharing resources and not feeling that you need to prove you have it all.”

Finally, Rossman sees a new set of expectations coming for retirement–less focused on material goods and more on experience and values. “It’s going to be an era of simplicity and new priorities–less is more.”

© 2008 Tribune Media Services Inc.

by Mark Miller | Saturday, May 2, 2009 | Retirement

Stop Stressing About What to Do With Your Life

Take complete control of your career in a matter of minutes

Image Description
Free Career Design and Job Search Training Webinars Led by Industry Experts
hosted by Nicola Vetter Director of Communications Starting Spring 2019
Keep Me in the Loop Be a Presenter

FREE GUIDE: Career Change
Image Description

Get our free 36-page guide on career change and life balance.

Get Your Free Guide Now
FREE GUIDE: Know Yourself
Image Description

Get a free copy of Know Yourself!, a user's guide to selecting and getting the most out of your career aptitude test or personality test.

Get Your Free Guide Now
FREE GUIDE: Become a Teacher
Image Description

This free, 40-page guide includes everything you need to know about making a career change into teaching.

Get Your Free Guide Now

Take Control of Your Career Path Today


Smart Career Design
and Job Search

Pathwise Publishing, LLC
PO Box 102847
Denver, CO 80250