America is debating whether to raise the retirement age—but boomers are already working well into their sixties and seventies
Baby boomers, a large and influential cohort that was only recently surpassed by millennials in terms of size, started retiring in 2011. They started working around 1962, and a lot has changed since then.
As baby boomers reach what was traditionally considered retirement age, they're encountering a landscape transformed by economic, health, and societal shifts. This generation now faces retirement decisions influenced not only by personal desires but also by those very shifts.
That’s not to say that the “elder statesmen” of today’s generational landscape are simply passive subjects to these changes. Boomers are increasingly reconsidering what retirement means, and more importantly, what it could mean.
Instead of viewing retirement as the end of active engagement, many seek opportunities to remain productive, whether that’s through continued employment, various investment opportunities, or unconventional retirement lifestyles.
These are significant changes, and they won’t be limited in scope to boomers. What’s becoming the new normal now will have deep, far-reaching consequences on Gen X, millennials, Gen Z, and Gen Alpha.
The new retirement age
Pew Research Center data illustrates a significant increase in the percentage of Americans over 65 who are still employed, nearly doubling in the past 35 years. This shift reflects broader economic and social changes, including the erosion of traditional pension plans and the rising cost of living, which compel many to extend their careers.
Even though the U.S. government states that the current full retirement age is 67, the real situation is a tad bit different. There have been various attempts to raise the full retirement age up to 70. This isn’t solely a U.S.-centric topic. Similar proposals are receiving attention from other developed economies such as the U.K., indicating a much farther-reaching issue. There is an additional consideration: Even if the retirement age is not raised, boomers will likely continue to be employed in some capacity even beyond age 70.
Additionally, the desire to remain mentally and socially active contributes to this trend, challenging outdated notions of retirement as a period of decline. Boomers are actively seeking roles that allow them to leverage their decades of experience while still offering flexibility and fulfillment.
Financial realities and shifts in benefits
The need for financial security drives many boomers to work longer, maximizing their earnings potential and ensuring a more stable financial foundation before they reach the new retirement age.
The shift from defined benefit pension plans to defined contribution plans like 401(k)s marked a significant transformation that placed greater responsibility on individuals to manage their retirement savings, navigate the uncertainties of the stock market, and plan for a future that, at the time, implied decades of post-retirement life.
Another important point to make is that retirement benefits aren’t set in stone. While Social Security and similar programs such as Medicare will see increases in the short term, there are two key considerations here: These increases are in no way a match for the cost-of-living increases we’ve seen over the past few years, and significant political pressure exists within the landscape of U.S politics to cut down or even do away with these benefits.
As they adapt to these new financial realities, boomers are becoming increasingly proactive in seeking information and resources to make informed decisions about their retirement savings and investments. Perhaps surprisingly, 46.9% of boomers trust generative AI enough to ask it for financial advice, with a whopping 90% willing to use online tools for property purchases—both points forming a salient point against the cliché that boomers are necessarily tech-averse.
The challenges facing retired boomers
Retired boomers face a range of challenges, from economic hardships exacerbated by the 2008 financial crisis to difficulties reentering a job market that often favors younger workers.
The doubling of housing prices between 1998 and 2021, as well as the lack of adequate savings, has left some struggling to secure a stable financial future.
Additionally, ageism in the workforce and the rapid pace of technological change present barriers to employment, underscoring the need for targeted support and policies to help older workers remain competitive and financially secure.
Organizations and policymakers are thus challenged to create environments that not only respect but also capitalize on the vast experience and wisdom that older workers bring to the table.
Redefining retirement for the 21st century
The baby boomer generation is at the forefront of redefining retirement, blending financial pragmatism with a quest for meaningful engagement. Merely by challenging traditional retirement norms and exploring new lifestyles, boomers are setting new precedents for aging and work.
This shift requires not only individual adaptability but also societal support to address the unique challenges and opportunities of retirement today. Whether it’s alternative work arrangements, unorthodox lifestyles, or harnessing the power of AI, the boomers of the 2020s are faced with a multitude of trials and tribulations, but at the same time, they have copious tools and aids at their disposal.
Tim Fries is a financial analyst, writer, and cofounder of The Tokenist, a digital platform that covers news, insights, and analysis related to cryptocurrency, blockchain technology, and financial markets.
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