Baby-Boomers Retirement

Abstract

According to reports, 10,000 Baby Boomers are going to be retired every day. That is the main reason why organizations are seeking out for new employees to fill positions that Baby-Boomers are leaving behind. The majority of these positions are far from being starting or entry-level ones. The great number of baby-boomers spent a lot of time to reach these positions, and they were really devoted to their carrier and also quite well-grounded in their areas of activities.

Anyway, this obstacle can help the younger generation to fill higher posts in relevant organizations, and with each day the help becomes closer.

Baby-Boomers Retirement

The baby boomers were those who were growing up while the hippie culture was in the top. And they are unlikely to be not ready for the retire age. They need to earn money, but change their usual way of earning them.

“But these generation representatives meet also another kind of problem. They do not see these problems connected with finances. Many Boomers also have non-financial questions that may not be answered by a financial adviser. But there are now many different kinds of services available to help them navigate retirement, such as retirement coaches, elder life advisers and certified senior advisers. A great number of tutorial resources become available for retired generation.

To define the term a ‘baby boomer’, it is important to say that it is a person which was born during the demographic Post–World War II baby boom between the years 1946 and 1964, according to the U.S. Census Bureau (U.S. Census Bureau). Also, it is used in cultural context. Thus, the term has rather extended concept. Various societies, entities, individuals, and scientists may have totally opposite opinions on what the concept “a baby boomer” contains, both technically and culturally. Nonetheless, the popularity of the term can be explained with broad cultural similarities and historical impact of some exact generation. In Europe and North America boomers are widely associated with privilege, as many grew up in a time of widespread government subsidies in post-war housing and education, and increasing influence (Owram & Doug, 1997).

If to speak about them as the group, they were wealthier, more active and physically fitting to those times. They were also the generation that received the highest levels of incomes; therefore, they could receive the benefits from food receiving, retirement programs too, and sometimes even “midlife crisis” products.

Their bright feature is that they were tended to identify themselves as a special group of people. In 1960s they even created a very specific rhetoric around their cohort, and the change they were bringing about (Jones & Landon, 1980). In accordance with Owram and Doug, the baby boom has been described variously as a “shockwave” and as “the pig in the python”, (Owram & Doug, 1997).

For better understanding it is necessary to get acquainted with following data: number of baby-boomers is approximately 76 millions of persons, in 2008 leading-edge boomers turn age 62, and for current period every boomer turns 60 per every eight second; till 2030, 70 million Americans will be 65+, and will comprise 20-25% of the US population. Maybe the main reason of the problem that exists is a financial issue. For instance, average annual household earnings of boomers equal $53,000, and average boomer predicted to retire with $500,000-$1,000,000 in assets. 66% of all US stockholders and 60% of annuity owners are boomers which are not confident in selecting a mutual fund the Boomer Finances. Boomer retirement savings decreased (2001-2002) on 17% from 58% and finances are their largest program (that is opinion of 23% of boomers).

Experts have found that till 2040, the Social Security benefits will have to be reduced by 37%, if no changes are made to the financial system. Most of these people keep working after retirement. For the current period, mature workers (after 45) are the labor force of the USA. And many of them, which have been already retired, are going to try themselves in a new profession, though the majority of them just want to stay ‘on wave’ or to be active not because of money (28% of current working retirees will continue working as long as their health permits). 45% of the US companies have special positions for mature workers.

Their expectations and feelings about life after retirement vary from-is the extent of person’s social network (the most powerful predictor of life satisfaction after retirement), not health or wealth; retirees who are socially, economically and civically engaged will live longer.

Using 1977-2011 data from the Current Population Survey, it is investigated that often-heard claim about delayed retirement by baby boomers will result in higher unemployment among the young; the claim which has been garnering increased attention from the media during the period of Great Recession. It explores both time-series and cross-state variation, and uses state-level regressions and instrumental-variable models to determine the sizes to which such a situation exists in the United States of America. It is estimated that there is no evidence that increasing employment of older individuals have impact on the work opportunities of the younger generation. Moreover, there is existent fact that greater employment of older persons leads to better outcomes for the young in the form of reduced unemployment, and even in the form of higher wages. And this is true for both gender groups. Estimation of impact of old male mortality showed that there is no connection between them and chances of younger persons to be employed. Finally, despite the fact that the labor market downturn that accompanied the Great Recession was the most severe in the post-war period, the effects of elderly employment on other segments of the labor market is the same as other known business cycles and should be resolved in the same usual way.

More than 78 million Americans classified as baby boomers would be living for 10-25 years more than their predecessors. Their physical health condition is good enough for physical activity such as running, to build new constructions and start new kinds of business. All these factors have impact on retired people not to check in any retirement communities, as they are still ready for ‘active’ way of life. Many of them do not start to penetrate the small towns that can offer things not normally found in retirement communities, such as various types of employment and the living among the low-key family and friends. Another group of them prefer to back in country areas to take advantage of amenities (public transport, for example). Some retirees change their place of living with their adult children because of financial necessity or own life choice. A large percentage of boomers indicated that they would like to move when they retire. This was observed in the previous period too. And while some boomers are able to accumulate substantial home equity that they can use to purchase smaller, cheaper homes in less urban areas for cash, many others find themselves completely tapped out or underwater on their home loans. One more difference of baby boomers in comparison with their parents is that they are much worse in money saving and debts avoiding. A recent average baby boomer is about $500,000 short of what they will need to retire comfortably, and this generation will not be able to rely on the security of guaranteed pensions and the Social Security that their parents enjoyed. And while real estate prices are finally starting to rise again, those who cannot substantially profit from selling their present house, in order to find a cheaper one, will likely have to make some major adjustments in their lifestyles for the near future.

The term Generation Jones has sometimes been used to distinguish those born from 1954 onward from the earlier Baby Boomers (FNP Interactive, 2008). A lot of baby boomers faced with problem of lack of earnings and shorting of fund as soon as they become retired, so they have to work for several next years for stabilizing their financial position. For employers it is really a problem, as they do not want to pay bigger sums of money to old workers for some, not always short, period. But, one the other hand, they want to see competitive players in their companies for making more profit. The fact is that tendency of baby boomers is in changing their previous field of activities at all. Many boomers are going to try themselves in areas they were always dreaming about, but never working, or they can work on some ideas which they will accept.

Majority of boomers had to get acquired with new technologies in order to be in touch with their families and world changes at all. According to some papers, over half of those aged 65 plus use the Internet, with nearly three-quarters of those using it on a daily basis. Moreover, approximately third part of them even is in such social network sites as Facebook. And their number is constantly an increasing one. In the period from 2010 till today, the number of those who use mobile phones has been increased from 13% to 70%. Technology and longevity have given the baby boomer generation choices that did not exist previously. Subsequent generations will also face unique challenges and opportunities as our world becomes increasingly mobile. It can be said that the boomers will become the first generation which saw the both centuries and their huge gaps in the development of digital world. Experts say that baby boomers will direct and manage almost three-quarters of the world’s retail assets within 5 year period.

It is admitted that baby-boomers (born between 1945 and 1965) have such a tendency to change their priorities fast, and their number is rather large, as retirement is started in significant numbers. Such group of people has chosen for the main direction the discovering of solutions to ensure all possible needs in retirement.

Other examples of this “solutions alpha” include liability driven investing in the DB pension fund sector, life-cycle investing and target income funds in the defined contribution world and “advice-embedded” investing in the mass market. “Legacy assets will migrate towards solutions-driven investing. The emerging trend will be as immutable as the momentum of a supertanker,” the report claims. “Conventional investing will morph beyond recognition by the end of this decade.” The rate of closure of the DB plans called that deficit is increasing. This problem exists even in Japan, where society is gifted with co-called “job-in-lives” culture. As a result, the DC schemes are expected to be shifted higher their share of global pension assets from 43 per cent today, to more than 60 per cent by 2020. This is likely to have significant repercussions for the investment industry, with 62 per cent of the DC investors planning to invest in the balanced or multi-asset class funds.

It is not really clear what industry of our country is observed as the main aim for the future dominant trends on market and the role of departments in it is unknown.

One of solutions is in cutting the number of finances for public spending in order to overdue the crisis and debts problems. One can use the European Union as an example; representatives are going to do everything for renovation of the power of the EU. But according to many experts, America should accept a combination of low interest rates and economic growth that is seen as a more likely path to achieve the same goal.

That is why, finally, the central bank is going to agree decisions of primary importance during the next three years. To prevent any financial repressions, which would occur, if central banks continue to help governments and finance them to close the debts, it is feared that a combination of low rates and rising inflation will steadily vaporize public debt and erode the purchasing power of the underpinning assets,” according to words of some experts. For some number of baby boomers their retirement will become a new interesting stage in life, but for the others, it would be a windy way, not very easy and pleasant.