America is aging. The Baby Boomers, those born from 1945 to 1961, are beginning to retire in droves but for many, retirement is simply not possible. These people are staying in their jobs or taking on new jobs ranging from Wal-Mart greeters to warehouse workers. For many the retirement of hobbies, vacations, and playing with the grandkids simply isn’t in the cards. The future of aging may include work outside of the home of some variety. How did we get into this crisis?

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Pensions vs. 401K

After WWII, thanks to the activism of unions throughout the interwar years, retirement pensions for loyal employees became a common feature of a compensation package. However, in the beginning of the 1980s, companies resisted these expensive schemes and moved to a system of helping Americans save for retirement by contributing to locked investment accounts like the 401K or the IRA. Pensions were plans that guaranteed a certain amount of money until the worker died. Modern retirement plans depend entirely on the employee saving enough from a lifetime to of work to survive the years of retirement. If the worker can’t save enough, they can have a major income crisis as they retire, even if they own their home. 401Ks also depend on investment income to grow, if the stock market crashes as the employee is retiring, their retirement plans can be upset for years. Many people are still recovering from the 2008 crisis here in 2019.

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Americans are Living Longer

Although the life expectancy of Americans is dropping slightly due to deaths of the despair and the opioid crisis, older people are living longer. The traditional retirement age of 65 is often leaving workers with 20+ years of retirement living off savings and social security. Rising costs in all areas make this a tenuous proposition except for the upper-middle class or the most fastidious of savers. For many Americans, leaving work at 65 is simply no longer possible. Instead, they must keep on working, collecting social security and using their savings, if they have any.

Work: The New Retirement

Companies and society, in general, is going to have to get used to hiring and working with older workers who are staying in offices and in other workplaces. Thanks to this retirement crisis and the major change in how we fund retirement, many workers are left without enough to simply sit at home and enjoy their time. America is greying and so is its workforce. Everyone will simply have to adjust to this new reality. Companies can do much to support their older workers with good health benefits, flexible time, and paid time off. Companies should look through their organization and see how they can best utilize this experienced and hardworking workforce. However, for those that don’t want to work during their golden years, there is no better time like the present to make better retirement plans.

Making Retirement Plans

Most Americans are unprepared for retirement. Even among the Baby Boomers who have already begun to leave the workforce, average retirement savings sits at only $150,000 (not including their home). Social Security only offers a modest monthly income to supplement the savings. This means that many older Americans may need to work or rely on family to make up the difference. For younger workers (or those who haven’t retired yet) making better plans to retire is essential. Take full advantage of any retirement programs that may exist at your employer. Making regular contributions to 401ks, IRAs, and other retirement vehicles is an important strategy to make sure that retirement is comfortable. For those who have already retired, it can be too late to improve their financial status.

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