Health and Wealth: Aging in America
by P. Skoran, Weiss Ratings | February 10, 2012
The baby boomers — the generation that questioned the authority structure and coined the phrase “don’t trust anyone over 30” — are moving squarely into the 55-and-older age group.
Remember, this is the generation that drove change at each life stage. And they will no doubt challenge the culture of aging in America as well.
Investing for the Golden Age
Had the economy remained robust, Boomers would probably have begun a steady, organized transfer of retirement assets out of the stock market — reallocating to safer, fixed instruments designed to shield retirement nest eggs from normal volatility.
For such a large group, that move — even if slow and steady — might have created sufficient downward pressure to scare others out of the stock market. Perhaps creating a value drop similar to what we’ve recently experienced. But, as it stands, we’ll never know for certain.
What is clear, though, is that the stock market’s dramatic downward spiral in reaction to the burst in the housing bubble and growing national deficit shortened the group’s money-making time horizon. With little time to make up losses, many moved quickly to preserve their capital and even managed to make some gains. Others, however, had already taken large losses before they could protect their retirement savings.
And when you spend your working years saving, investing and planning for retirement, it can’t be easy to adjust to this new reality.
Retirement Dreams, Revised
Now, even those who had planned extensive travel and luxury lifestyles have scaled back their expectations to a less-rosy retirement outlook. It seems almost inevitable that many who saw early retirement in their future will be working longer than they expected.
The diminished value of their nest eggs and fear of outliving accumulated funds has given this group a new perspective on the age they’ll retire ... and the lifestyle they can expect when they do.
Some will sign on for Social Security at 65 or earlier, but many on the lagging end of the generation will have to work until 67, 68, 69 and maybe longer to reap full retirement benefits from the social safety net. So as their hair turns gray and wrinkles deepen, they will still be working.
Meanwhile, America’s workforce will age with them. According to the U.S. Department of Labor’s employment projections, Boomers will make up 25 percent of the working population by 2020.
And as this group ages, it will change the workforce in other ways.
Boomers to Revolutionize the Next Generation’s Workforce
The Boomers’ need for healthcare and personal-care services will make those fields some of the fastest-growing occupations, at growth rates anticipated by the Department of Labor of 35 percent, 27 percent and 26 percent, respectively, between now and 2020.
The number of registered nurses is projected to grow (712,000), home-health aides (706,000) and personal-care aides (607,000). These are all occupations with high employment levels now, but they are expected to outpace the 14 percent average growth anticipated for the coming decade.
In fact, one-third of the occupations projected by the Department of Labor to be the fastest-growing are related to the heath care and social-assistance industries that will be in greater demand as the population ages.
Seniors Will Still Strive to Stay Young
And while this generation may have denied creature comforts early on, they developed a taste for luxury goods, youthful looks and high fashion. So as they lose muscle tone in faces and bodies, it’s inevitable they’ll look for ways to reverse the effects of aging. Think health food, gym memberships, personal trainers, and cosmetic and surgical procedures to chase the fountain of youth.
Many will deny aging until the moment it is upon them. In fact, in her book, “The Coming of Age,” Simone de Beauvoir observed that the fear of aging and death often drives people to view their elders as a separate species, rather than a mirror view of their own future. But others will be forced to face the inevitable as they care for aging parents. And, they won’t be able to avoid noticing that the cost and accessibility of healthcare is a major concern.
But ... Can Seniors Count on Their Country for Help?
In the coming years, this country will need to take measures to balance the national budget. And that means budget cuts will be part of the landscape. The questions that remain are how the cuts should be made, and how large they should be. And many believe it will be hard to accomplish sizeable reductions without some cuts aimed at entitlements such as Social Security and Medicare, even if larger tax contributions come from wealthier Americans.
While some will reach old age with more than pocket change to foot their own healthcare bills, there will be many, very possibly including the middle class, who will struggle to meet basic living expenses for food, housing, transportation and medical care. With reduced government-sponsored benefits, especially those that now provide coverage for rising medical costs, quite a few will be pushed into poverty.
Boomers who paid into the social welfare system throughout their working lives could find themselves in less-than-desirable economic health, especially if they mistakenly counted on these programs as their primary support for waning years. Will they have Social Security to depend on? And if they do, will those benefits, that average just over $1,200 a month in 2012, according to the Center for Economic Policy Research, be sufficient?
It’ll certainly be a new reality. That’s not much to stretch over monthly expenses, let alone enough to cover doctors and aides and certainly not plastic surgery or new iPhones. What’s a poor Boomer to do?
For the most part, Americans can no longer count on private pensions and company- or union-sponsored health benefits that were there for earlier retirees. They just don’t exist. Nowadays, according to the Center on Budget and Policy Priorities, the Social Security benefit is what keeps 20 million Americans above the poverty line.
It could be that the situation for retirees may be much worse than they anticipated.
Or, it’s quite possible that once again, Boomers will emerge winners, creating a new societal order for retirement.
Don’t Count Out the Boomers Just Yet ...
There May Be More Change in Store from Them!
They may find ways to adapt. They may set different expectations for medical care and costs. They may refuse to fade into old age and instead demand to be recognized for their skills and experience, compelling businesses to hire or retain them well into their senior years — and continue to cover their medical expenses.
It’s not likely Boomers will see themselves as obsolete geezers waiting to die. If they approach aging with the energy and hope they’ve asserted in the past, we could see a new “counter culture.” They’ve run against norms before. It wouldn’t be outside the realm to imagine it could happen again.