Will Baby Boomers Revolutionize Retirement?

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The Baby Boom Generation has transformed America. It developed the Internet and the personal computer. Ushered in the Civil Rights Era. Revolutionized music and fashion in the 1960s.

If statistics are to be trusted, the Baby Boomers are on the verge of yet another historic transformation.

The reimagining of retirement.

According to a recent survey by Transamerica Center for Retirement Studies, 65-percent of Baby Boomers plan to work past retirement age. Or perhaps not retire at all. Sixty two percent of Baby Boomers say the need for income or health insurance will prompt this decision.

This represents a radical new vision of retirement. Gone are the days of 40 years and a trip into the sunset. Today's older workers expect retirement to look much like their working years.

Yet here's the million dollar question: Will the economy and job market cooperate?

The changing face of retirement isn't the result of new desires. Large-scale structural changes have forced Americans to grapple with new economic realities. Defined benefit pension systems are being phased out in favor of plans with employee participation.

Yet even when offered the chance to opt in to a 401k, many Boomers decline. The Transamerica survey estimates that nearly 20-percent of people in this age bracket opt not to join a 401k or similar retirement plan.

That is a truly mind-bending statistic. Here's another: Baby Boomers save money at a rate of less than half the previous generation.

It's evidence of wishful retirement thinking on the part of some Boomers.

Facing the reality of retirement

Many of us tend to draw rosy mental pictures of our retirement-age years. When we fast forward a decade or two, we envision things much like they are today. We rarely think about our health failing. We don't think about age discrimination in the workplace. We don't think about a shrinking, hyper competitive job market. We don't think about the misery of struggling when we're older and vulnerable.

Instead we drink the Kool Aid about "encore careers." Or an easy, seamless transition into part-time work. Or we even believe we can go full-time indefinitely, like a Supreme Court justice.

Unfortunately, it's not that easy. These favorable outcomes are unlikely to unfold as expected. Are you banking on a working retirement to erase years or decades of poor money management? Then you're flirting with disaster.

And that's putting it mildly. You're almost guaranteeing a bad outcome.

The simple cost of living is rising. The price of food has spiked in the last year, according to the Bureau of Labor Statistics.

Health care costs are continuing their rapid and seemingly endless rise. Some estimates say the cost of health care has increased by almost 25-percent since 2011.

These developments are concerning -- and here to stay.

The prescription for prosperity

Some of us are banking on a working retirement. Others believe they don't have enough money to save.

Yet there are simple steps you can take today to safeguard your future. They don't even require much capital.

First, stop passing on free money. If you're one of the 20-percent of Boomers who decline a 401k option, take a good look in the mirror.

You're mortgaging your future.

Contribute to a retirement plan. Even if you have to start small, it's critical to get started. If you have a plan, bump up your contribution.

Can't find the money? Then take a serious look at your budget. Cut out your cable bill. Brew your own morning coffee.

It might seem trivial. It's not. Anything that helps you start to save is worth it.

Medical care keeps getting more expensive. It also keeps getting better. Today we live 20 years longer than we did when Social Security was enacted.

That's a great thing -- unless you run out of money before you run out of time. Federal programs such as Social Security and Medicare are projected to start running deficits in the coming years. Serious changes may be in store. The possibility of a late-career job is not a safety net.

It's important to keep yourself in good physical condition. If you want to be healthy enough to work in your 70s, it's vital that you put the effort in now.

Keep your skills sharp and updated. Though overt age discrimination isn't common, soft age discrimination is everywhere. It's not even contained to the over 50 set. In Silicon Valley, a founder is finished if his company hasn't made it by 30.

We live in a youth-centric culture. The Baby Boomers are a huge generation. It's also a group that failed to save money the way their parents did.

That means there's going to be fierce competition for retirement-age jobs. If you don't have an updated skill set, you're going to find it tough sledding.

The retirement revolution may be inevitable. Yet if you're a Boomer without a solid financial plan, this is one radical change of which you won't want to be a part.

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