New research from McKinsey Global Institute (MGI) shows, given the recent economic crisis, it’s actually better for boomers to work longer.
According to the research, labor force participation rates are declining and reduced levels of working and spending from boomers, the U.S. GDP will slow from an average of 3.2 percent per year to about 2.4 percent over the next three decades. One problem, research shows, is that most (two-thirds) of the oldest boomers are not only financially unprepared for retirement, but they also don’t realize it.
MGI data suggests a two-year increase in the median retirement age over the next decade would add almost $13 trillion to real U.S. GDP over the next 30 years and would cut in half (roughly) the number of boomers financial unprepared for retirement.
In order for boomers to overcome barriers to work — including health care costs, labor laws, pension regulations, and corporate attitudes toward older workers — MGI says the solutions will come when the government reallocates health insurance costs; businesses and boomers agree on more flexible work arrangements; policy makers reform private pensions; and Social Security removes disincentives to remaining in the workforce.