You Call This Retirement? Boomers Still Have Work to Do

And no one fell for it harder than the boomers, a generation that always believed in the power of me. Their prime working years coincided with the stock market bonanza.

But the reality, as indicated by a slew of ever-more-sobering studies, is a little more complex. Fidelity claims that someone 55 or older who has been active in his or her 401(k) for the past 10 years is likely to have $269,500 saved, which sounds grand until you hear that $220,000 will just cover medical expenses for a 65-year-old couple in retirement. And most Americans don't have nearly that much anyway. According to the Center for Retirement Research at Boston College, the typical account for a worker nearing retirement is only $42,000. And 55 percent of current workers don't have any employment-based savings at all. AARP says that three-quarters of Americans between 55 and 64 have less than $30,000 socked away. It all adds up to a $6.6 trillion gap between what we have and what we need.

So what happens now? The answer is that you change what people consider "retirement" to be. And it turns out, we're already doing it. We just didn't know it.

Retirement itself is a very modern concept, a byproduct of postwar prosperity and longer life spans. For most of history, those lucky few who managed to reach an advanced age kept working until they were physically unable; rural life and extended families provided the safety net. But the Industrial Revolution and the longevity revolution put an end to that. Enter Social Security, which offered older Americans both a bulwark against poverty and an encouragement to leave the workforce.

If you ask Marc Freedman, the founder of Encore.org, those postwar retirement communities in the Leisure World mode were less about leisure and more about warehousing people who no longer had an economic role in society. "We made a virtue out of necessity," he says. As for our current situation? "We need to come up with a different solution."

And we have that solution. In one of the great ironies of history, the Me Generation will transform into the We Generation in its later years. "Boomers will not so much be doing their own thing," says Age Wave's Dychtwald. "They'll be helping out the grandchildren and maybe having a sister move in."

Many theorists predict that employers will eventually adapt and absorb this army of boomers who either desire or need to remain on the job at ages when their parents were working on their golf strokes. But there are other needs, too. "Whatever economic challenges the over-65s are facing these days, they pale by comparison with the money troubles of the young," writes Paul Taylor of the Pew Research Center in the new book The Next America: Boomers, Millennials, and the Looming Generational Showdown. Staggered by a slow economic recovery and their hefty college debts, today's younger people are going to need all the help they can get.

Often, they are finding that assistance from boomers: A 2013 Merrill Lynch–Age Wave survey found that 62 percent of those 50 or older had helped out family members financially in the past five years. Other boomers are pitching in with unpaid labor: Currently 30 percent of preschoolers are taken care of by grandparents when Mom or Dad is at work or school.

So there is meaningful work aplenty. Even if boomers wanted to amble off to the fishing hole for the remainder of their years, the rest of us can't afford to let them: We still need them here.

And this is an apt thing, in many ways. "Boomers want to be where the action is," Dychtwald says — and they'll get their wish. "I don't think all 78 million boomers are going to have an easy and carefree time of it. I do think we will make it a more robust and interesting period of life than we have to date."

But there's also a danger of creating unrealistic expectations for older adults, says Marty Martinson, professor of health education at San Francisco State University. "It's one thing to say we need to create communities where elders are part of the fabric of what is going on," she says. "But we've constructed this idea of the 90-year-old surfer-volunteer as the ideal retiree." Yes, older people want to be active, useful parts of society, Martinson is quick to add. But this should be a choice, not an obligation.

There is something to be said for Martinson's take. If we once implied that older Americans had a duty to go off and enjoy themselves, we're now risking expecting the exact opposite — that they have responsibility to the rest of us.

No wonder "retirement" no longer seems like the right word to describe this strange new time. The idea of having a life after leaving the workforce barely existed a century ago; today, it's an institution. As circumstances change, so will what we think we want from this still-evolving life stage. It's going to be a work in progress for a long time.

And that's a good thing. For a generation that has always defied expectations, this last act will be one to watch.

Helaine Olen is the author of Pound Foolish: Exposing the Dark Side of the Personal Finance Industry.

As the last of the Baby Boomer Generation turns 50 and more baby boomers are retiring, AARP celebrates the generation that changed the world.

© Sandra J. Huston, Texas Tech University