Retirement, boomers, and the lessons of Detroit
Global aging aEUR" the demographic shift resulting from low birth rates and increasing longevity aEUR" presents challenges that are just beginning to be fully appreciated. One of those challenges is retirement. In the United States, 78 million boomers are expected to live much longer in retirement than previous generations. Ten thousand boomers turn 65 each day, far too many of them without sufficient financial resources, retirement planning and protections. For aging Americans in past generations, the big fear was running out of time. For too many boomers now entering their retirement years, the growing fear is running out of money. Stories about going broke in old age proliferate as new and often unexpected threats to personal financial well-being arise. In Detroit, thousands of retirees on public pensions now face a once unimaginable risk: the loss of public pension benefits. Whether DetroitaEUR(TM)s pension plans made good sense at the time they were established is beside the point today. Contracts were negotiated, commitments were made, expectations were created, and retiring women and men counted on pension resources for what they thought would be their aEURoegolden years.aEUR? Many, if not most, have no aEURoeplan B.aEUR? What will they do? How will they manage? How will their families and neighborhoods be affected? Legal decisions in DetroitaEUR(TM)s bankruptcy proceedings will produce some answers, but retirees in this once powerful city are worrying about uncertain futures and are understandably losing sleep. ThataEUR(TM)s just the tip of the retirement iceberg. Will other public employees rest easy, knowing the precedents set in the Detroit pension battles may preview future battles in other troubled American cities? Are employees from private industry immune to retirement fears, when too many corporate pension plans are underfunded, potentially leaving these retirees financially exposed? Without question, the move from employer-funded defined benefit plans to individually-funded defined contribution plans has shifted the burden and increased risk and uncertainty for individuals. And letaEUR(TM)s not even start on social security issues! ThereaEUR(TM)s a point in all this. Retirement aEUR" particularly early retirement aEUR" has become a significant personal risk. Longer lives mean more time to enjoy life, but also more financial needs and increased financial risks. Longer lives have given most boomers the opportunity to stay healthy, active, engaged and contributing members of society. Of course, disease and disability will mean that many boomers will have to retire, and in an aging society, we must find ways to meet their needs. But those who have the capacity and opportunity to work should do all they can to stay in the game, retaining their value and continuing to engage. For some boomers the decision to continue work will be elective. TheyaEUR(TM)ll stay in their primary careers, or theyaEUR(TM)ll to move to socially focused encore careers as they look for opportunities for ongoing productivity and civic contribution. For other boomers, longer work lives will be absolutely necessary to meet financial needs that are not satisfied by savings, retirement and social security arrangements. ItaEUR(TM)s time to be frank about working. ItaEUR(TM)s better than retirement. ItaEUR(TM)s good for wallets and waistlines. ItaEUR(TM)s good for self esteem and society. And itaEUR(TM)s a critically important hedge against the uncertainties of a rapidly changing retirement system. ItaEUR(TM)s time to enable and celebrate ongoing work aEUR" retaining, retraining and encouraging older workers who have talents and skills, including talents and skills that complement those of younger members of the workforce. ItaEUR(TM)s time that we facilitate lifelong learning to keep workers current and to re-educate and repurpose them for the economy of the future. ItaEUR(TM)s time to challenge mandatory retirement provisions, to shine a light on age bias, to re-think the value of maturity, to help older workers to become financially literate, and to encourage them to take control of their financial destines. And itaEUR(TM)s time to change our vocabulary aEUR" to end the social promotion and celebration of retirement as a great goal and aspiration for the boomer generation and instead to celebrate lifelong opportunity, effort and work. These are among the lessons of Detroit.