Too Young to Be Old

A growing number of us are neither-nors -- neither ready to retire nor able to afford it.

EDITOR'S NOTE: This is the inaugural Rethinking Retirement column.

The biggest demographic shift of the 21st century is under way. In 1900, life expectancy at birth in the U.S. was 47 years. Now it's closer to 80, and many of today's children could live to 100. This gift of longevity represents a big and permanent shift in American life -- one that may require a new set of rules.

Social visionary Marc Freedman, founder of the Civic Ventures think tank in San Francisco, recalls his own aha moment three years ago. As a 50-year-old father of two young boys, Freedman booked a hotel room for a family vacation using his AARP discount and requested two cribs. "There are a growing number of us who can be classified as neither-nors," Freedman, now a father of three, writes in his new book, The Big Shift: Navigating the New Stage Beyond Midlife. "Neither young nor old. Neither ready to retire nor able to afford it."

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New opportunities. The first wave of baby-boomers turn 65 this year, and the looming demands of 78 million seniors threaten to swamp Social Security and Medicare. Some warn that the financial stress could cripple the economy and ignite a battle between people with walkers and those pushing baby strollers. But Freedman believes the unprecedented aging of America presents an opportunity to redefine the golden years for boomers and the generations that follow.

A yet-unnamed chapter of life is evolving for people between middle age and old age -- much the way that adolescence was first recognized as a distinct developmental stage in the early 20th century. Many of today's 65-year-olds are vibrant, active and engaged. Rather than retiring to a golf-course community and living off their savings for 20 years or more -- an impossible scenario for many in the wake of the Great Recession -- some are searching for a second act that combines meaningful work and a paycheck.

Freedman calls this new life phase the "encore years." A few years ago, he launched a national conversation with his thought-provoking book Encore: Finding Work That Matters in the Second Half of Life. The companion Web site offers advice on switching directions in midlife and inspirational stories of individuals who carved a new path. Recent research sponsored by Civic Ventures suggests that there could be labor shortages by 2018 if boomers retire at traditional ages, particularly in education, health care, government and nonprofit organizations.

In The Big Shift, Freedman offers a recipe for transforming America's coming midlife crisis into an opportunity for individuals and society. "Never before have so many people had so much experience and the time and capacity to do something significant with it," he writes. He outlines out-of-the-box ideas, such as "gap years" for grown-ups; new kinds of internships and fellowships for Americans moving beyond middle age; remodeled higher education to help retrain people for these new roles; and new kinds of investment accounts to finance the cost of transitioning to new careers.

Sound like an impossible dream? No, it's more like practical idealism, based on Freedman's decade-plus-long mission to link experienced people who are eager to make a difference with nonprofit organizations in need of leadership. He spearheaded the creation of Experience Corps, a national service program for people over 55, and created the Purpose Prize, which annually provides five $100,000 prizes to social innovators in the second half of life.

If the golden-years dream was once freedom from work, the dream of this new wave is the freedom to work, says Freedman. The oldest boomers may be the lab rats in this longevity experiment, but every generation will benefit from new rules and roles for those who are beyond middle age but still too young to be old.

Mary Beth Franklin is a senior editor at Kiplinger's Personal Finance. She is also editor of Kiplinger's Retirement Planning 2011, available on newsstands now.

Mary Beth Franklin
Former Senior Editor, Kiplinger's Personal Finance