retirement

Baby Boomers are Rewriting Retirement History

Can you a remember a time when retirement didn’t exist? It wasn't that long ago. And we might be heading that way again, because today's "retirees" have a lot they still want to accomplish.

If I say the word “retirement,” what comes to mind? Sunsets? Golfing? Cruises?

Most of the people I work with don’t want anything to do with a retirement that has them sailing toward a sunset of irrelevance. The people I speak with want a retirement packed with meaning, new careers and new experiences.

Hundreds of years ago, most people didn’t grow old, so there was no need to retire. People worked to survive, until physically or mentally they could no longer perform their tasks.

As centuries passed, life expectancies began to increase, but caring for the elderly was still not a problem. That’s because as recently as the mid-18th century, people rarely died from old age; they often died from infections that are easily cured today. And if someone was fortunate enough to age and no longer work in one field, they’d opt for a less labor-intense job.

A medical advance changed everything

It was the discovery of penicillin in 1928, and markedly increased lifespans, which led to the concept of the modern retirement that we’re familiar with today. People began living longer and naturally working longer — resulting in a glut of workers that eventually led to unemployment and stagnation, a big problem for the first time.

At the height of the Great Depression, it became apparent that the way to increase efficiency and lower unemployment was to encourage older workers to retire. However, many older workers were not willing (or in many cases, able) to quit. It just wasn’t in their DNA. Life had always been about work, and now they were being asked to stop. In response, President Franklin D. Roosevelt proposed the Social Security Act of 1935.

Suddenly, you could retire and still have income.

But this gave rise to a new problem: Americans had “nothing” to do. What were retirees to do with all that extra time?

Fast forward to 2016, where the median retirement age is 62, yet the typical life span is almost double what it was only a century ago — now up to 79 for women.

When Social Security was introduced, the average life expectancy was only 61 years, so most people who made it to retirement were only retired for a very short time. Today, a healthy 65-year-old man has a 25% chance of living to be 89 (90, for a woman). If you retire at 65, you might have a 24-year (or more) retirement.

Baby Boomers lead the way

In spite of all those commercials depicting serene retired couples, most of us really don’t want to golf or watch TV for the next 24 years. Increasingly, people want meaningful connections and a reason to get out of bed each and every day.

It’s no wonder the Baby Boomer generation is rewriting the definition of retirement by continuing to work. According to Transamerica Center for Retirement Studies, roughly 3 out of 5 Baby Boomers plan on continuing employment past the traditional retirement age of 65.

That’s news to much of the financial services industry, which still runs on a marketing-driven message that retirement is all about the accumulation of assets followed by a stroll across a finish line into Pleasantville.

I tried to retire, but changed my mind.

I came pretty close to retirement after a business transaction and quickly discovered it wasn’t for me. I decided to put my focus back into work and began advising clients that quitting work was just one option, and not a requirement.

Similar to the 1930s, there’s a lot of anxiety about retirement, and it’s not based solely on fiscal concerns. Even for those who have saved well and don’t financially need to work, there’s a lot of angst about what they are going to do with their lives if they stop working.

One of the most satisfying aspects of my career is seeing the passion that older Americans are bringing to the retirement-transition process. Money is just a part of the equation. Volunteerism, nonprofits, returning to school, starting a new business, these are the goals of many of the Baby Boomers I work with.

Though it appears we’re shifting back to a time of people working as long physically and mentally as possible, modern retirement is about reinvention, and for me, it’s an exciting change in the American cultural landscape.

About the Author

Scott Hanson, CFP

Financial Advisor and Co-Founder, Hanson McClain Advisors

Scott Hanson, CFP, answers your questions on a variety of topics and also co-hosts a weekly call-in radio program. Visit HansonMcClain.com to ask a question or to hear his show. Follow him on Twitter at @scotthansoncfp.

Most Popular

The 11 Most Expensive Cities in the U.S.
real estate

The 11 Most Expensive Cities in the U.S.

From metro areas on both coasts to the middle of the Pacific Ocean, these are the priciest cities in the U.S. to call home.
August 9, 2022
Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021
You'll Save More on Green Home Improvements Under the Inflation Reduction Act
Tax Breaks

You'll Save More on Green Home Improvements Under the Inflation Reduction Act

Tax credits for energy-efficient home improvements will be extended and expanded by the Inflation Reduction Act.
August 12, 2022

Recommended

2 Risks People Face If They Retire in Tough Economic Times
retirement

2 Risks People Face If They Retire in Tough Economic Times

You’ve reached your retirement age, but our economy is on the rocks. What should you do?
August 13, 2022
How to Steer Your Retirement Portfolio Through the Storm
retirement planning

How to Steer Your Retirement Portfolio Through the Storm

Right now, it feels like there’s an economic challenge around every corner. But the good news is you can still protect your nest egg.
August 12, 2022
Beware the Caller From “The Government”: It’s a Scam
Scams

Beware the Caller From “The Government”: It’s a Scam

Scammers' persistence is matched only by their insolence: They even try to impersonate the very agencies trying to stop their grift.
August 11, 2022
Annuities Rising in Popularity
annuities

Annuities Rising in Popularity

As interest rates increase, so does the appeal of annuities. How much do you know about these insurance products?
August 9, 2022