Retirement, re-defined

At the time, most of us were focused on our immediate losses. But now, a long-term by-product of the stock market decline of late 2008 is getting more of our attention: A lot of soon-to-be-retirees had their nest-egg in that basket. And those boomers are reconsidering when and how to retire, now that some of those nest-eggs have cracked.

Two recent stories support that assertion. First, Marketing Daily published a story last week which included some highlights from a survey by TD Ameritrade. One of the conclusions in the study: Women have begun to re-set their retirement expectations, and have accepted the idea that they might have to live on less money than they had previously anticipated once they retire.

Second, a story in the New York Times explained that many boomers are deferring their retirement plans… which could impact the younger, emerging workforce, as fewer departing workers translates into fewer openings just as these young adults are entering the job market.

Implications: Many boomers have long suspected that Social Security would not outlast their retirement, so they created their own retirement plans, through IRAs, 401(k)s, or other investment instruments. And with a few exceptions (the dot-com bubble, the Enron age), those investments were performing as expected (or better), at least until the commencement of The Great Recession.

During those go-go years, many people envisioned a retirement location and lifestyle that may have looked more like a resort than a residence. Now, just like so many other expectations, many would-be retirees are re-setting their goals, and aligning their expectations with what they perceive to be the new financial reality.

Even as the stock market demonstrates signs of recovery and greater resilience, people now realize just how far and how fast the system can be upset. In response, one might expect all kinds of questions with regard to these and other late-stage decisions:

• “Where, how and when should I retire?”
  
• “If I’m going to continue working longer, can I at least retire from the job I’ve always had to have (for economic reasons), and take this opportunity to get the kind of job I’ve always wanted to have (for reasons of self-satisfaction and actualization)?”
  
• “During this age of “re-hirement,” might the size of my paycheck take a back-seat to benefits—most notably health care—when it comes to deciding whether a compensation package is fair?”
  
• “What does my dream job look like as I enter semi-retirement?” (For example, how many hours per week am I willing to work? Do I expect this job to provide sustaining income, or just supplemental income? And what physical limitations might I think about that weren’t a concern to me twenty or thirty years ago? How can I find a job that’s not really “work” to me… but more like getting paid for something that is more like a hobby or special interest to me?)
  

I’m certainly not the first to suggest that boomers have re-defined every life stage they have experienced, just like a proverbial pig moving through a demographic python. Don’t expect them to retire from that function, just because they’re approaching retirement.

Mike Anderson