Attention Gen Y: Baby Boomers are moving out

By Scot Herrick | Personal Finance

Sep 27

Without naming names, I’ve read a lot of blog posts from Gen Y’ers about how those nasty Baby Boomers are sticking around and not giving anyone else a shot at their lucrative positions. Hanging in there until the bitter retirement end — or even past the traditional retirement age of 65.

I always thought that position was a little overblown; what I observe in the marketplace is a lot of people who are forced to retire — and are not ready for it. But I didn’t really have some good stats to at least talk to a different viewpoint. After all, my lucid observations not backed by some facts doesn’t cut it…

In the September 24th issue of Newsweek, Jane Bryant Quinn has a few salient facts about the current retirement situation:

  • Of those age 60 to 65, “a mere 33% still work at their primary jobs full time, according to the Employee Benefit Research Institute.”
  • McKinsey & Co. notes “40% of retirees are forced to leave work earlier than they planned, ready or not.”
  • And my favorite: The average retirement age is currently 57.

As usual, some of these baby boomers have financially planned better than others. But many baby boomers of today have been forced to retire early because of health issues or layoffs and not finding a different job in the same salary range as their old one. Often, the very baby boomers that need to continue working because they are not “retirement ready” from a financial perspective won’t be able to make up the difference needed for a secure retirement.

You will casually note that if you retire at age 57, you are not covered by Medicare until you are 65. Health insurance at that age is problematical as well.

My advice to Gen Y: start maxing out those 401(k) programs or the equivalent for all you entrepreneurs out there. Those baby boomers are moving out. And you don’t have as much time as you might think to get to “retirement ready.”