76+ million Boomers in the United States.
Better than half have crossed the age 65 threshold.
By 2030, the youngest will be on the other side.
Retirement concerns are growing, but Boomers are hardly a one-size-fits-all crowd. A crucial issue for one Boomer might not phase another.
With that said, if we were to segment Boomers by financial readiness, most would fall into one of these three categories:
- 30-40% of Boomers lack any retirement savings. Adding in those with savings at $10K or less, this approaches the 50% mark.
- 20% fear they won’t have enough money to cover basic needs. The other 80% are either extremely frugal or they have cash stashed under their mattress or they’re in denial.
- Many are still saddled with debt. According to the Office of Retirement Policy, four in five “near retirees” hold household debt. The average debt exceeded $100,000.
The Somewhat Prepared
- A BlackRock survey revealed the average pre-retirement Boomer (55-65 years old) has $136,200 saved for retirement, yet this same group desires $45,500 in retirement income from savings.
- Applying the 4% rule (4% annual withdrawals over a 30-year span), to have a shot at yielding $45,500 each year, they’ll need to save at least $1.1 million. These and more stats here.
- Layoffs and/or difficulties landing another job at this age is a big concern for this group. A recent study reports that 60% of those age 55+ retired sooner than they planned to.
- According to the Employee Benefit Research Institute’s 2016 Retirement Confidence Survey, 20% of those age 55+ believe they’ll have enough money to live comfortably throughout their retirement years, down from 26% in 2006.
- In this same survey, zeroing in on the 55+ group: 71% have estimated how much income they’ll need and 41% have consulted with a financial advisor to fine-tune retirement planning.
- While modern medicine has extended longevity, the risk of more serious health issues in these later years runs higher. Many recognize that one serious illness could disrupt their financial security significantly.
Reinvention Trend: Working in Retirement
Working longer is a growing desire for Boomers. Some want to do this to bolster up their nest egg. Others choose this path to stay engaged in a field they enjoy.
In that same BlackRock Survey referenced above, the majority of respondents expressed interest in some kind of paid work during retirement, yet less than 20% of those age 65-74 are actually doing this.
While the prospect of getting hired at 65+ may seem daunting, there’s another path that holds far greater promise for self-starters with experience and skills in fields where demand is high, but the candidate talent pool is sparse.
For the entrepreneurial-minded Boomer, why wait for someone to pick you when you can pick yourself?
Companies Scramble to Fill Talent Gaps
Had it not been for the recession, we’d be seeing a stronger Boomer exodus. Many Boomers are sticking around longer, if they can, to allow more time to rebound from investment losses and to tuck away a few more bucks into their 401(k) plan.
At the other end of the talent pool are the Millennials, largely raised by the Boomers. While their energy, enthusiasm and tech-savvy ways are valued by employers, many lack the depth of experience, knowledge and skills to advance to mid-level and management roles just yet.
Then there’s the Gen Xers, sometimes referred to as the “middle child” of the generations. As you can see in the chart at the right, their ranks are about ten million fewer than the Boomers or the Millennials. Many Gen Xers are advancing to fill Boomer vacancies, but in some fields, there may not be enough of them to go around.
This opens up a wealth of opportunities for Boomers who can help bridge these talent gaps for awhile, addressing needs on a part-time basis as a contractor or consultant. There are also opportunities to help coach Millennials (and Gen Xers) to speed up their learning curve.
The time is ripe for seizing these opportunities, but you’ll need to think through your approach to set the stage for a mutually satisfying arrangement. For some, your current employer may become your first client. For others, you’ll need to tap your network for introductions to potential clients.
Boomers were quite adept at climbing up the ladder. Now it’s time to think about how we might climb down the ladder more gracefully, scaling back hours and commitments to design this next exciting life chapter on our terms.
One final caveat: Be careful not to stay in this “thinking about it” mode too long. Even if you’re several years away from this Retirepreneur phase, there’s no time like the present to jump start your professional network, bolster your tech skills, conduct market research, and get started on the first draft of your business plan.
This talent gap will likely last a decade or longer… but keep in mind, the first ripple of Gen Zers are already starting their climb up the ladder.