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Baby Boomers, Retirement & the Millennial Mindset

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Baby Boomers, Retirement & the Millennial Mindset

I’ve been having many conversations with my clients recently about a trend revealing itself around the topic of retirement.

Here are three comments with some details you should be aware of (especially you baby boomers):

  1. Baby Boomers are retiring (or being forced to retire) in record numbers (old news)
  2. Retirement, as we know it or think about it, is fundamentally changing (interesting news)
  3. To take advantage, baby boomers would be well-served to embrace the millennial mindset that so many proclaim to be frustrated with (Jim, WTF are you talking about?)
     

Stick with me.

Let’s talk retirement
 

Here is what we know about retirement: 10,000 baby boomers are retiring each day, and many of them don’t have the appropriate funds to do so.

Say what you want about baby boomers, but the retirement view has changed fundamentally during their careers. Pensions got picked off one by one, they needed to catch up on saving for retirement, and for many, it just hasn’t happened. That’s bad news, but it is news we have been hearing for over a decade.

Here’s the bad news, slightly amplified: Almost all retirement discussions are focused on money. And while many people aren’t prepared financially for retirement, hardly any are prepared psychologically or emotionally for retirement.

The idea and definition of retirement is fundamentally changing.

When most people think of someone entering retirement, they think of fishing, baking, doing some work in the garden; and if they need some paycheck to make ends meet – they will greet people at the local Wal-Mart. 

This isn’t the case anymore. There is only so much fishing and baking people can do. Retirees are no longer the old, fragile people we typically associate with retirement (driving 20 mph in the left hand lane when there is nobody in the right.) They have energy, they have capability, and many simply don’t want to or aren’t ready to slow down, regardless of financial situation. The new retirees are setting up their retirements with a sense of purpose.

Retirement, now, is about re-visiting those passions and pursuits that have been on the back burner for most of their careers.

Individuals in their 50’s, 60’s and 70’s, who were normally looking at a slow-paced, non-working retirement, actually have an opportunity to define what the next thirty years of their life will look like. It’s exciting, but it is going to take a psychological shift in the way we think about work and what a “working retirement” would look like.

Enter, Millennial Mindset
 

Much has been written about how millennials are disrupting the workforce. Here are four examples. One of the biggest is that they are dictating the terms on which they work. Technological advances have promoted a new economic framework, allowing for flexibility on location, hours, and the like. Millennials, love them or hate them, are working in new ways that would never have worked before.
 
So how can baby boomers use this to their advantage? Retirement doesn’t mean “a lack of work.” For some, it may include project-based work, others it could be volunteering. It’s a time to pursue those passions that have been on the back burner for most of their careers. It may be a time to reinvent themselves as someone new. Baby boomers, like all other segments of the population, have the ability to dictate their own terms of work with one big differentiator: experience.
 
The preparation for this change needs direction, however. In his book “What Color is Your Retirement?” Dr. Richard Johnson writes that there are five benefits to work: Financial Compensation, Time Management, a Sense of Utility, Status and Socialization. The reflection and preparation needed is how you are going to replace each of these benefits in your new retirement lifestyle.
 
Most retirees are going to work in retirement. So get thinking now about what you are going to. Want to build a garden? Sure. Want to open up a widget factory or restaurant? Sure. It’s up to you to figure out how you are going to operate on “your” terms. It takes a major psychological shift to be your own boss – or to work differently than you have in the cubicle or corner office over the past 20 years. It’s a major shift, but it’s one that can be done with the right type of preparation.

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