How Baby Boomers Are Faring in this Economy
http://thedianerehmshow.org/shows/2012-01-04/how-baby-boomers-are-faring-economy
Baby Boomers are facing unique difficulties in this economy. Though their unemployment rate is lower than the national average, when they do lose their jobs, it takes far longer to find new ones. A new poll shows that those over fifty are more stressed about their current financial situation, they are worried about the lasting impact of the recession on their security, and many expect they will have to work as many as six years longer than today's retirees did. New economic realities for Americans in their fifties, sixties and seventies.
Guests
Gary Burtless
senior fellow, economic studies at The Brookings Institution.
Olivia Mitchell
professor, executive director of the Pension Research Council;
and director of the Boettner Center for Pensions and Retirement Research at The Wharton School, University of Pennsylvania
Richard Johnson
Director of the Program on Retirement Policy at the Urban Institute
Program Highlights
The great recession has affected different age groups in different ways. Its impact on the generation of those age 55 and above, many of whom are nearing retirement, has left many "Baby Boomers" with unique financial challenges. Our
guests explore how some older Americans have dealt with the unexpected hurdles the recession has set in the way of their plans for enjoying their later stages of life.
Some Common Problems
Several of the factors that matter the most to many who are 55 and older are the terrible job market, the drop in home values, and the drop in the values of their retirement accounts. "That makes this time a very anxious one, a very worrisome time if you are 55 or older and you're still working," Gary Burtless said. According to Richard Johnson, the unemployment rate for those 55 and older is about 6.4 percent, which is lower than the national average, but still very high. The real problem for people in this age group is that when they lose a job, it generally takes them much longer to get a new one than it does for younger workers, Johnson said.
The Issues Behind The Jobs
Diane asked the guests why it takes so much longer, on average, for older workers to find new jobs. Johnson said there seems to be a perception among employers that older workers are more expensive than younger ones, and that their employer health-care costs are higher. There's also a concern, Johnson said, that older workers might retire in just a few years after being hired - a situation that many employers are wary of in terms of investing time and money in training a new worker. Some employers have tried to offset rising health care costs for workers of all ages by setting up health savings accounts for employees, depositing money in the accounts, and leaving it up to the employees to shop around the the best health care plans.
Psychological Stresses On Baby Boomers
As a Baby Boomer herself, Mitchell said she and her peers are coming to terms with the fact that their retirement years are going to look quite different from those of their parents'. "Social security, medicare, all these programs are facing much bigger problems...our home values have declined, our 401Ks are fairly limited. And health care costs just seem to be quite astoundingly high," she said. One way that people who are in relatively good health can try to compensate for these challenges is to work longer into their sixties in order to claim the maximum social security benefit, Mitchell said.
Is It Possible To "Reinvent" Oneself?
A listener in his early fifties wrote in to say that he's feeling a lot of stress about his current job prospects. He wondered if it was really possible to reinvent himself at his age. Mitchell said that as much as possible, older workers need to try to keep retraining themselves on the latest technology and skills. Johnson added that some employers have a tendency to view older employees as not being as "up-to-date" on the latest skills as younger workers are, and so the burden to prove their competency in this area falls on the older worker.
You can read the full transcript here.
Comments
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I really think that your guest's answer to the guy who called in who was supporting his parents was so unfair. His parents didn't choose to retire at 50, probably they would love to continue working. I just got a job after two years of looking. I'm deep in debt and also so grateful. But it was pure luck to get a new job at 58. I think that just telling people they need to work to 75 doesn't help if they can't find work in their 50's
According to your guest we all need to be specialists in advanced economics.
I think we should throw out a hundred-thousand years of evolution and force all humans to be technocrats.
Over the last 10 yrs, millions of people have lost huge portions of their pensions because of corporate bankruptcies. In the case of Delphi (a former subsidiary of GM), so people lost 70% of their pensions. Until the bankruptcy laws are reformed, this travesty will continue.
Social Security is based on the total amount paid into Social Security over your entire career. Thus, the impact of older workers' unemployment is that nothing is being paid into Social Security while unemployed. This means that the eventual Social Security benefit payment is only indirectly tied to the presence or amount of recent wages.
Recent wages more generally impact employer's definied benefit pension plans.
Ray Sullivan
Lynchburg, VA
Some of my family had there pensions out right siezed in Boesky schemes. How much has that figured into retirement delemma nationwide???
Hey Brian how much did your parents make? You sound like you come from the privileged class. Folks who make huge profits off of the back of the working class. Sent to the Wharton school of business...make as much as you can with no conscience what so ever. Or sent to college by a working class boomer and have no idea about how hard your parents worked. Would put money on the former. Spoiled, selfish arrogant privileged class. Folks who step over the less fortunate on their way into church
I understand that the social security tax was cut by about 2% last year, and again this year. I only know this because I received a letter from PERSI (my retirement account) suggesting that since the social security tax was cut by 2%, maybe we should investment that amount in a supplemental account. Is it true that social security taxes have been cut, and if so, why don't we hear more about that and not just about how the benefits are going to run out for other reasons. It seems like a poor time to cut social security taxes. Thank you,
Theresa Beaver
Idaho
Yes I do not have firsthand knowledge but that does not mean I can not educate myself and understand the past. You say that the Boomers inherited institutional corruption and came to maturity as deregulation came about. I ask why were they not fighting these things? If you look its when they came to power that these issues started....so why did they night fight hard against them? My generaiton is out on the streets and online fighting income inequality and corruption in our system that is far worse. The boomers sat back and instead enjoyed the fact that while things were in decline they were still good for them. They lived off the fact that America was number 1 in science, technology, education and infrastucture. Again they saw the decline and shrugged their shoulders and said not my fault.
So yes their road became steeper and steeper, but only because while they were young and could do something they did nothing.
Sorry but you may be right about deregulation, the top % taking too much home and that the media have big hands in the blame. But you are wrong to say that the boomers came off the depression and the red scare and thus are blameless. They could have done far far more and it is time they get more of the blame. They were comfortable so they did not care, end of the story.
Feudalism predates Mercantilism and lead directly to Capitalism. It was based on land, as currency of power, and was very much a class structured society. The king held all lands in his domain and gave them out to lords as rewards for loyalty and or bribes to remain in power. He received in return, loyalty and hence kept his head. The lords passed on control over parts of their domain to knights who allowed the poorest of citizens to live and work the land with all proceeds passed back to him. This was a medieval form of President Reagan’s trickle-down economics. The peasants lived without rights and at a level of poverty that kept them entrapped because they could never save in order to create a life of their own. They were never intended to.
All this talk about savings and providing for retirement are a ruse…..no one can save 40% of what they make in order to provide for their retirement.
Feudalism is what we are returning to.
Boomers out of work could contact Brian and ask him for a job sweeping the hallways of the corporation he works at because his type of greed and attitude means he is on his way up the greedy corporate ladder. He might give you 5 bucks an hour but don't bet on it
Prof. Mitchell stated that the early retirement strategies pursued in Europe discourage young workers to enter the workforce, because they fear the burden of the high pension plan costs early retirements necessitate.
This rationale I never heard anyone mentioning before. In fact, despite numerous early retirement programs most young Germans are eager to join the workforce, and apprenticeships for high paying jobs are extremely competitive. There are just not enough jobs.
Early retirement may come with plenty downsides, but it prevents a bottleneck that prevents timely promotion opportunities for the young, resulting in grandparent's having to subsidize their children's mortgages and the tuitions and fees of their grandchildren's education.
Carol my parent live right down the road from the Delphi plant that used to be there on Needmore Rd. Have been helping take care of them the last four years as their health condistions have been failing. This once thriving plant in in Boehner district. Over the last year they have destroyed the evidence. Although the empty GM plant in Moraine is still standing. Rode with a bunch of these laid off GM and Delphii workers to the anti SB 5 folks this past winter up to the Ohio statehouse. They are rightfully pissed off . They will remember in November Kasich's efforts to undermine collective bargaining.
Boehner's district roads are in bad bad shape. Although it does seem lots of new school buildings being built
Come on, live within your means. If you can't afford a new car fix the one you have, if you can't afford a new tv don't buy one, even if yours doesn't work. I went to college paid off the loans I had early and got laughed at by friends and collogues as I ate pb&j for lunch instead of running to resturants every day. Now people like them want what I scrimpt and saved for. Sorry you made your bed, nighty night.
Well kathleen I guess it's just fine with you that Ohioans will be forced to get reverse mortgages to pay for public labor union benefits. The teacher unions already own every-ones home. I guess we can in time beg public sector workers for shelter and a few crumbs to eat. Knowing the union mentality don't count on it.
The systemic lack of self control and instant gratification lifestyle of baby boomers and others in succeding generations is not something that should be shouldered by those that did it /do it right. Quit whinning and do what needs to be done, better late then never. And for the Boomer making $30 an hour to perform unskilled/uneducated tasks I'd tell him he should have saved for a rainy day. I make about $30 an hour with years of experience and an education, and when I was out of work I tightened my belt again and my savings were more than enough to sustain me for 18-24 months. BE RESPONSIBLE WITH YOUR MONEY WHEN YOU HAVE IT. And don't come crying to me when you didn't save, that is on you.
There are enough comments here to encourage a new discussion topic: the injustice and indeed lack of wisdom rampant that causes the layoff of older experienced employees. This not only causes hardship to individual families, it deeply depletes the know-how that actually could result in economic progress for all.
I wish that someone would do a show on looking for work after 50. All of this saying that everyone will have to work until he or she is 70 or even 80 is pointless, meaningless, and cruel until employers begin hiring people over 40. Otherwise, people may be able to work into their old age, but they won't be able to. Hiring older workers and supporting them into their 70s and 80s will require some changes in the workplace....but c'est la vie!
Diane, I enjoy your program very much though I wish to take an exception with today's Baby Boomer and Retirement show. Your guests gave the very wrong impression about Social Security about be the pension plan of my generation. While one can retire at 62, one will lose benefits for doing so because until one reaches his/her official retirement age, the SSA will deduct $ 1 from the payment for EVERY $ 2 earned BEYOND $ 14K (an annually changing income threshhold) for each month and year. There is one exception: when the beneficiary is retiring late in the year and the income exceeds the $ 14K, the formula is applied to the remaining months.
Therefore, the male caller who said if he retired at his normal age, he would not recoup his lost benefit until 78 years is wrong. Retireing early means a much later age because the benefits are reduced.
While I can retire this year, age 65, I will lose benefits because the income ceilnig exceeds my working income.
If you have these experts or those like them, on again, please have a staff member contact the SSA for the income restriction details to trukly inform your audience. Thank you
Diane, I enjoy your program very much though I wish to take an exception with today's Baby Boomer and Retirement show. Your guests gave the very wrong impression about Social Security about be the pension plan of my generation. While one can retire at 62, one will lose benefits for doing so because until one reaches his/her official retirement age, the SSA will deduct $ 1 from the payment for EVERY $ 2 earned BEYOND $ 14K (an annually changing income threshhold) for each month and year. There is one exception: when the beneficiary is retiring late in the year and the income exceeds the $ 14K, the formula is applied to the remaining months.
Therefore, the male caller who said if he retired at his normal age, he would not recoup his lost benefit until 78 years is wrong. Retireing early means a much later age because the benefits are reduced.
While I can retire this year, age 65, I will lose benefits because the income ceilnig exceeds my working income.
If you have these experts or those like them, on again, please have a staff member contact the SSA for the income restriction details to trukly inform your audience. Thank you
mnemecek,
Truth of the matter is....you and I and everyone on this board is only a medical diagnosis away from loosing everything we've ever had. It doesn't matter how well you've saved or how responsible you are, when that time comes and it hopefully won't. You'll understand.
I've watched friends and loved ones wiped out in a matter of months and years.
Conservatives will tell you that this is the fault of government driving up healthcare costs, while progressives will tell you just the opposite....in the final analysis that doesn't matter very much. We can debate until the cows come home as to who is right and who is wrong and the single fact remains, healthcare and payment for it ultimately destroys everyone.
The healthcare problems that this country is in are crippling it. Good luck in trying to hang on to what you have if you should ever have to face a catastrophic illness and again, differences aside, hopefully you never will have to.
So one of your so called experts says "only 10% of those who work within the framework of a defined benefit plan actually are able to collect their pension" Really, I mean the State Of New York happens to be the largest employer in New York... do you really think only one in ten get to collect what is due them?
Furthermore no one seems to deal with that last bastion of saneness that of the Taft-Hartley Multi-Employer Funds which provides benefits from work earned under various (in my case about 100) different employers (over a 35 year career as a carpenter). I think the trades alone would account for more then 10% of the population considered, and with 5 year vesting I find it very difficult to believe this 10% number.
As working till I am 70 .. at 55 and many winters outside I tell you this I would rather die. To be expected to work past the limitations of of your body is really asking the impossible.
Now Teece, you know if one of these White supermen ever breaks a hip or gets colon cancer they will just "tighten their belt." They are so right and in tight with the other Superwhites they'll never be let go, and that is their manly right. Why they've been buying Kruegerand gold, and peeing in the snow to mark the hole, so it's all under their sole control, no wife or kids know so there's no one to scold. And when they are old and covered with mold, they'll say screw the doctors' rate and excavate their own prostate with a steak knife right off the plate. They'll be such a wreck with a turkey neck at 98 when they finally reject the workaday world with hands too gnarled to sign in the space for an SS pension, and it will get their undivided attention when the loot they scooped must be paid to a rest home 'cause they need help to poop.
Am I the next Dr. Suess?
Yes Pancake I think you are on to something here....has a nice cadence just needs some illustrations. heh.