The 76 million American children born between 1945 and 1964 are rapidly approaching retirement age. And just like anything this well-observed generation has ever done, sociologists, government officials, academics, actuaries and industry professionals of all stripes are theorizing, postulating and debating the effect that this wave of retirees will have on the industry and society as a whole.
Many contend that the impact of the wave upon our shoreline would leave a very different impression in the sand were it not for two separate, yet interconnected factors: The Great Recession and the seismic shift in many professions from defined benefit (DB) retirement plans to defined contribution (DC) plans. The confluence of the deliberate conversion from DB plans to DC plans and the learning curve that accompanies any great transition, coupled with the devastating jolt of the Great Recession in 2008 and the years of anemic recovery that followed, have rendered many boomers’ retirement plans in tatters: In desperate need of revision, retooling and rebuilding.
So, what’s the plan?
Retirement planning that was initiated when boomers were in their 30s and 40s was built around a retirement age of 65. Now, because people are living longer, they feel the need to postpone that initial retirement age because their original retirement plans may have to last five or ten years longer than they were designed to, according Warren Hunter, chairman of DMW Direct, a direct response advertising agency specializing in the insurance arena.
A questionable notion?
When it comes to delayed retirement, Massachusetts Mutual Insurance Company (MassMutual) views the phenomena more as potential trend than one that has already been realized. Since many boomers have yet to hit 65, it is hard to conclude they are going to be working longer than they expected. Although MassMutual recognizes that many workers think they are going to have to delay retirement and the company is vigilantly monitoring the trend, they have not concluded that a delayed retirement will be as common as many contend.