The Financial Crisis and Baby Boomers

In our Changing Face of Entrepreneurs research report we discussed how baby boomers are increasingly choosing to work for or start small businesses instead of pursuing traditional retirement.  Surveys done over the last few years consistently point out that over 60% of baby boomers plan on working in retirement.  And a recent (but pre-crisis) AARP survey shows that 80% plan on working in retirement. 

The primary reasons baby boomers give for wanting to continue working are to stay active, pursue new and/or interesting work and to contribute socially.  Only about 30-40% of boomers have said in surveys taken prior to the financial crisis they plan to work in retirement due to financial need. But the steep decline in financial markets this year will likely cause these numbers to go up substantially. 

The financial crisis comes at a bad time for the nation's 76 million baby boomers.  The early boomers are just past the age of 60 and don't have a lot of time for the financial markets to recover before they reach traditional retirement.  Even younger boomers have likely seen their retirement assets and home values decline enough to be very concerned about retirement funding.

The good news is most baby boomers want to work in retirement.  They will also be the healthiest retirement age generation and able to work past traditional retirement ages.  So while the financial crisis will likely require many more boomers to work past their planned retirement ages, most baby boomers are well equipped and interested in doing so.

Our pre-financial crisis forecast was that over half of all baby boomers would choose some form of non-traditional retirement.  We also forecast that workforce participation rates and that small business formation rates for those over the age of 50 would increase over prior generations. 

The financial crisis likely means that even more baby boomers will choose non-traditional retirement.  We also expect that over the next decade workforce participation rates and small business formation rates by aging boomers to be higher than our prior expectations.   

Comments

[Ricci]

I am a baby boomer and looking forward to retiring. But to travel, read and volunteer not to take on a part-time job or start a new business. I believe that there are a lot of boomers that agree with me. Please check out my reference (So how's your nest egg now?) to your article at my blog: http://nesteggornextegg.wordpress.com/
Thanks

[Isabella Coldivar]

It's unfortunate that so many baby boomers are going to have to work instead of retire -- not because they want to, but because they have to because of the current state of the economy.

However, when we're ready to start enjoying the golden years, there's one company who will always be behind us.

AARP is a great source of services and information that can be beneficial to the quality of life. What's great about AARP is that a membership comes with prescription and travel discounts!

AARP has teamed up with talk show host, Cristina Saralegui and made a fun, customizable video and you're just a click away from being the next guest on Amigos Live! Check out http://www.upclosewithcristina.com/video to learn more and make your own video!

Also, you can enter to win an all inclusive trip for 2 to Miami while you're checking out the site! (And even if you don't win, there's still those great travel discounts that come with the membership!)

Definitely check out AARP for yourself or a loved one. There are really are some great benefits to joining!

I hope it's alright that I commented on your blog -- wanted to let you know about the fun video with Cristina and AARP's great benefits. If you have any further questions, please don't hesitate to email me.

Thanks!
Isabella Coldivar
AARP Ambassador
isabellaAARP@gmail.com

[Peter]

Good post.It's unfortunate that so many baby boomers are going to have to work instead of retire -- not because they want to, but because they have to because of the current state of the economy.
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The good news is only the almost invisible inflection in the downward path of jobs,compared to the severe recession of 1981-82.

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Financial Crisis makes some small businesses go down..That's the sad part of a business man..

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This is America's "Fall of Rome", just as it was England's before us. It can be accelerated or slowed, but we are past the point of no return. Baby Boomers such as myself inherited the strongest country in the world's history when it was at its zenith. We are at least 80 percent (if not entirely) responsible for its gradual and ongoing ruin. The Greatest Generation (WWII) was indeed great. Greater still were the Founding Fathers. In each case, what set these generations apart were a willingness to risk much (and in some cases all); to do things which were not popular and/or easy; and, to work to achieve something for the greater good. In general, Baby Boomers are bankrupt on all three counts.

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The term Generation Jones has sometimes been used to distinguish those born from 1954 onward from the earlier Baby Boomers.

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Financial Crisis makes some small businesses go down..That's the sad part of a business man..