Baby Boomers And Boomerangs

By Jeanelle Horcasitas

December 15, 2014 5 min read

When I turned 19, I started my first "real-world" job with the state of California. Even though I only held a student position, every paycheck I received took out a little bit extra that went to my retirement. I often complained that I was too young to even begin thinking about my retirement. However, my older (and wiser) co-workers urged me to continue saving for my retirement and recommended that I open up an individual retirement account or 401(k) plan. Although I left this job years ago, the advice I received about securing my future by saving up now resonates with me, especially as I get older.

My grandparents have been an unfortunate example of what many baby boomers are faced with today: working well past the "normal" retirement age. Furthermore, I know that my Generation Xer parents will suffer the same fate and will need to work beyond what many consider to be the normal retirement age. According to the Social Security Administration, those born between the 1940s and 1960s usually do not retire until they are about 66 years old. Moreover, those older adults who continue to work past the retirement age are normally not working for a company that offers a pension or payout. In addition, many have been laid off from companies that went under during the Great Recession. As a result, baby boomers have been forced to start over, competing for minimum-wage jobs alongside young adults and earning well below what they need to pay off their heavier debts of a mortgage, a car or even student loan payments.

Another disadvantage facing baby boomers hoping to retire early is that more and more young adults are choosing to move back home because of their own difficulties finding a job, despite spending years at a university to receive a degree. In 2012, Richard Fry from the Pew Research Center reported that "36 percent of the nation's young adults ages 18 to 31-- the so-called millennial generation -- were living in their parents' home." These young adults have been referred to as the "boomerang kids" for leaving home and then eventually returning back to Mom and Dad's (normally baby boomers or Gen Xers). Therefore, the issue of retirement is prevalent not only for baby boomers but also for millennials. In addition, the millennial generation is considered to be in even worse shape than their parents because it is more difficult for them to secure a well-paying job, purchase a car or begin saving up for a home in the future.

So, what can baby boomers do right now if they do not have the luxuries of a pension or payout? Jonathan Clements of MarketWatch illustrates the hypothetical but very realistic predicament that most baby boomers find themselves in: "Let's say your full Social Security retirement age is 66, at which point you could get $1,400 a month, equal to $16,800 a year. This is roughly the average amount that Social Security recipients are entitled to." Additionally, those retiring earlier than the average age of 66 will receive a smaller amount monthly. On the other hand, delaying retirement can help increase the amount. Clements claims that delaying benefits between the ages of 66 and 70 could increase the amount to about $22,176 a year. However, this amount still proves to be a bleak and unlivable income, especially for older adults who are still paying off their debt, their children's debt and possibly even high medical bills resulting from simply getting older in age.

Therefore, the best advice for baby boomers and millennials is simply to save what you can while you can. Particularly for those a part of the baby boomer generation, it is crucial that whatever job you may have, at least some of your paycheck is going to your savings account. Unfortunately, the data above demonstrate that once older adults reach their 60s, there is usually only about a decade for them to save up enough money to secure their future because the retirement benefits simply won't cut it.

Millennials should follow the same advice. Although they are young and still starting out, the time to act is now. Saving a little bit each paycheck is crucial to securing a stable future. Although the baby boomer and milliennial generations are on opposite sides of the age spectrum, they share common struggles in these hard economic times.

Retirement is no longer what is advertised on television and magazines. It's not about taking tropical vacations, spending time with loved ones and enjoying yourself after many years of hard work. Retirement has become a daunting topic for both young and old. Therefore, it is never too early to think about your retirement or change the circumstances (if you are getting close to retirement) so that you may feel peaceful and happy when you finally make the decision to retire.

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