It is no secret that the "Great Recession" has had a devastating impact on Baby Boomers, especially those among the leading edge of that generation coming up on retirement. Lifetime savings were impacted as the stock market crash drove down 401k's. Home equities vanished and many Boomers suddenly found themselves upside-down on their mortgages rather than having an anticipated nest egg for retirement. So where does the Boomer generation go from here?
A lot depends on their age. The 78 million strong Boomer generation covers a large age span, comprised of births from1946-1964. So while the leading edge is turning sixty-five and may already be retired, the other end of the spectrum has 10-15 years of employment left. Younger Boomers have the time to recover a good portion of their lost assets. Older Boomers, on the other hand, face a darker outlook.
Boomers in their sixties who have suffered financial setbacks have pretty well reconciled themselves that they are never going to fully recover their assets. By some estimates, the housing market will take ten years to fully recover, and even then it is unlikely to return to pre-implosion levels. The stock market has enjoyed a bumpy recover, but Boomers in their sixties are reluctant to put the remainder of their lifetime savings into jeopardy again. At most, a conservative blend of bonds and mutual funds will probably define their diminished portfolios.
For those Baby Boomers who do not have the time to recoup their losses, this is a time of soul searching:
- Some are attempting to delay retirement if they already have a job. Putting off retirement does add more bucks to the retirement cookie jar, and delaying tapping into Social Security means a bigger allotment down the road. But hanging in there at an existing job is not as easy as it sounds. In many instances, older workers are being pressured to retire or are laid off to make way for less-expensive junior workers coming up through the ranks.
- Boomers who had already retired or lost their jobs are in dire straits. Many operate home businesses, but the down economy has impacted that as well. And landing a job when you are in your late fifties or early sixties is almost impossible. These are the Boomers who are really hurting, many losing their homes and trying to figure out how to just survive. This is a shell-shocked segment that is suddenly faced with tough decisions after the financial rug has been pulled out from under them.
Older Boomers are going through the process of accepting their fate and making adjustments. Never a generation to wallow in self-pity, these Boomers who raised families, built our economy and fought in the jungles of Vietnam are catching their second breath and developing "what now" strategies.
Most eventually realize that retirement is still possible if they downsize or modify their expectations. That does not mean that they must forego a comfortable retirement. It is simply a matter of surveying what assets are left and determining how those can be optimized to achieve the best possible retirement. For many, this means re-locating to less expensive areas or moving to a foreign country where retirement dollars go further. Some will start businesses or work part-time, never fully retiring. Others will discover that the pleasure of controlling their own time overrides disappointments and preconceived retirement notions, engaging in new activities and volunteerism during their golden years.
One thing is certain, Baby Boomers will enjoy active lifestyles during retirement regardless of their financial circumstances. Despite popular misconceptions, this is not a generation that gives up or focuses on hedonistic pursuits. We are a tough bunch who have overcome life's adversities time and again. And we are not through yet. Just wait – Baby Boomers are picking themselves up and healing their wounds. No matter the state of our retirement, we are going to make more contributions to our country and younger generations than any previous group of senior citizens!