In the year 2011, the first of the baby boomers will reach age 65 and retire. Some boomers will have retired early.
This will be just the beginning of what William Novelli predicted will be the nations rolling retirement.
The chief executive officer and executive director of AARP, Washington, Novelli keynoted the annual meeting here of National Association for Variable Annuities, Reston, Va.
Due to the graying of America, retirement is becoming as big an issue as youthfulness was in the 1950s and 1960s, when the baby boomers were children, he told the audience.
The boomer generation will change the nature of retirement in America, he predicted. They wont just retire, he said, “they will reinvent retirement.”
For example, boomers have various options to consider in retirementteaching, volunteering, new types of work, travel, etc., he noted. Which options they choose will depend on their health, financial situation, the economy and many other factors, Novelli said.
Where financial matters are concerned, developing “financial literacy” among boomers is “imperative,” he declared.
Factors that are propelling the new retirement lifestyle include the fact that boomers “are not as worn out” as former retirees were, according to Novelli. Throughout their lives, many boomers did “more brain work than back work,” he explained.
Also, many are not financially ready for retirement. And, there are fewer younger workers coming into the population to replace older employees at the workplace.
The AARP leader laid out four areas he believes the nation needs to address, in view of the graying of America:
Social Security. Unless action is taken, the reserves of Social Security will be depleted, warned Novelli. The longer the nation puts off Social Security reform, he maintained, “the worse off it will become.”
Personal savings and pensions. The responsibility for this increasingly rests with the individual, Novelli said. “People need to look out for themselves.” But, he added, “employers need to encourage people to save and invest.”
Health care. The health care system is a patchwork right now, he said, listing a range of problems from high costs, focus on acute care, little attention to disease prevention, and more. “We need reform,” he said. And people themselves need to take more personal responsibility for health–by increasing physical activity, for instance. Without adequate health care, “we can have little financial security in retirement,” he said.
Work. The retirement age is beginning to creep up, Novelli pointed out, and some research shows that many boomers expect to work after their retirement age. However, “many employers are unwilling to hire after 40, retrain after 50 and retain after 60,” he said. The nation needs robust debate about this, he said. But “we will see more older workers, to be sure,” he added.
As this happens, employers will offer more kinds of work. Older workers will be looking to integrate work with education and leisure, to upgrade skills, and to maintain social connections and opportunities. Some will become more involved in civic engagements, too.
In years past, boomers generally have not been as involved in civic activities as their parents were, Novelli observed. But he predicted this will change. “They will develop this. The catalyst will be care giving.”
In sum, Novelli said many boomers have time, intelligence and experience. “The nation cant afford to squander thisWe need to create structures to match the person with the talents and the needs.”
This will require a change in vision. “We need to discard outmoded ideas of retirement and aging,” he concluded.
Reproduced from National Underwriter Life & Health/Financial Services Edition, November 21, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.