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When the New York Yankees fired 70-year-old manager Casey Stengel in 1961, the team openly stated he was “too old for the job.” A resentful Stengel quipped: “I’ll never make the mistake of being 70 again.”
While many corporations are addressing ageism, most folks look to retirement as their time to slow down and reap the rewards of their lifes’ labor.
But for many, that choice may not be possible. When I lived in Las Vegas in the 1990s, a recurring and depressing reality was hopping into cabs driven by septuagenarians who volunteered they were once the proud owner of a healthy retirement fund, but … oh, that darned stock market, sports-books, tables, slots, etc. Instead of cruising Alaska or comfortably watching Wheel and Jeopardy!, they were now hauling gaggles of the inebriated for $5 tips.
Flash forward two decades. In an age of few pensions and inadequate company matching 401(k)s, individuals have increasingly become responsible for their own retirements. Outside of the relatively few disciplined savers, baby boomers are retiring en masse woefully unprepared to financially compensate their remaining years.
The problem is no longer that someone squandered their retirement fund, but that the fund — or any viable semblance of one — never existed. The retirement crisis is now hitting many squarely between the eyes.
The National Institute on Retirement Security (NIRS) calculates the average working household has virtually no retirement savings:
Financial experts suggest targets of 8-11 times income in retirement assets in order to replace 85 percent of pre-retirement income.
When all households are included— not just households with retirement accounts—the median retirement account balance is $3,000 for all working-age households and $12,000 for near-retirement households. Two-thirds of working households age 55-64 with at least one earner have retirement savings less than one times their annual income, which is far below what they will need to maintain their standard of living in retirement.
To call this a “crisis” isn’t hyperbole. Many will have to work hand-to-mouth until they die.
However, there are significant challenges to working in our later years. While sitting at a desk is something most able-bodied people can do, many workers come from physically taxing occupations that can no longer be done as the body ages. What can older workers do for a living when they can no longer perform required labor? And what about disability? Reuters reports that physical labor is linked to disability after retirement.
Men who had strenuous jobs during their working years were 70 percent more likely to experience at least some daily limitations during retirement than their peers who had not had physically demanding careers, the study found.
So what are retirees to do? To many, minimum wage work — such as becoming a WalMart greeter — is neither financially attractive nor emotionally stimulating, and working in regimented corporate atmospheres may not work with a retirees schedule.
The good news is there are growing options that have not existed before. Newer business models are rising up while disrupting ancient ones, providing opportunities to supplement one’s retirement. For example, the upward trend of older drivers transporting strangers around town in the comfort of their own car provides a self-employed option with preferable time management and freedom. Groups like the AARP are sponsoring new efforts to have Uber and its competitors hire older drivers. The New York Times reports:
Drivers are in such demand that last July Uber and Life Reimagined, a subsidiary of AARP, the organization for people over 50, formed a partnership to recruit more people as drivers.
They are trying to tap into the 50-and-older work force, a segment that is growing steadily, according to an AARP report released last year.
As the population ages and more baby boomers challenge traditional retirement norms, the number of older workers should continue to rise. One reason is that many people are leaving the full-time work force with less money than they need to support themselves at a comfortable standard of living.
Uber, which surveyed drivers in 2014 and 2015, found that nearly one-fourth of its drivers were 50 or older.
With the massive number of people hitting retirement age, are we seeing the idea of “traditional” retirement change forever?
David Plouffe, an Uber board member [and former Obama campaign manager], argued, most drivers work far less than full time. As many as half drive only 10 hours a week, he said in a speech in November, and 61 percent, or nearly two-thirds, have other job commitments.
The livelihoods of taxi drivers throughout the world are being undercut by the growing phenomenon that is Uber, Lyft, and their smaller would-be competitors. Those with flexible time and a desire to supplement their income (some report making up to $50,000 per year) it is seniors who may benefit the most.
Other industries may also start targeting the older part-time demographic such as online food delivery services GrubHub and DoorDash.
It isn’t just income that incentivizes seniors to continue or go back to working. Retirees also point to mental stimulation and productivity.
Merrill Lynch released a study focused on retirement. It pointed to a fascinating statistic that nearly 60% of retirees “launch into a new line of work after retirement,” and those are “three times more likely to be entrepreneurs than pre-retirees.”
As more people continue working in their later years, the U.S. workforce is steadily transforming. In prior decades, workforce growth was driven by the influx of young workers. In the last seven years, however, workers aged 55-plus accounted for virtually all workforce growth.
In the coming years, it shouldn’t surprise us to get into an Uber or open our front door to find retirees supplementing their income. We are also likely to continue working with older colleagues who run their own part-time consulting service while leveraging their decades of experience to give advice to their younger counterparts.
For those who look to retirement for enjoying pastimes, the sailboats will always be there. But for those seeking additional income or productivity, the growing field of part-time careers now provide more opportunities than ever before.
As Stengel also said: “There comes a time in every man’s life and I’ve had many of them.”