Behavior

The Big Freeze Immobilizes Boomers

“The Big Chill” was the iconic movie for baby boomers in their prime in 1983.  Perhaps The Big Freeze is the best way to describe where we’ve ended up.

 

Two recent reports based on in-depth interviews with retirees and pre-retirees arrived at the same conclusion about how we are approaching the dreaded retirement: paralysis.

“The most common resulting behavior was ubiquitous across participants: to do nothing,” concluded a report by Financial Engines Inc., a California investment advisor.

The big reason for the paralysis among a generation that related to dancing around the kitchen table with Kevin Kline, Glen Close, and Jeff Goldblum in “The Big Chill,” was – surprise! – denial about growing old.

A report commissioned by Boston College’s Financial Security Project, which sponsors the Squared Away blog, found that the baby boomers and pre-retirees felt “immobilized in retirement planning efforts by a combination of practical and emotional factors.”

These emotions include fear and confusion about not having enough money, not knowing how much they’ll need, and not knowing how or where to get information or help.  Throw into the mix the worst financial-industry crisis in modern history and high unemployment, which has hit older Americans hard.

FSP’s report provides verbatim quotes from 70 in-depth interviews with baby boomers and retirees in Phoenix; Cincinnati; and Hartford, Connecticut.

I’ll let the interviewees speak for themselves:

  • “Part of my problem is that I woke up one day and I was 56.  I’m not sure where the last 20 years went.  I’ve gotta face what I’m trying not to face.  People say, ‘embrace it,’ but I’m not.” (Boston pre-retiree) I wish there was some kind of formula to figure out what you need.” (Cincinnati pre-retiree)
  • “How much money is enough money?” (Hartford pre-retiree)
  • “You don’t know how long you’re going to live, or how well you’re going to manage that money.” (Hartford retiree)
  • “Had actually targeted 63, my company had other ideas.  Um, they wanted to replace me with somebody younger.” (Cincinnati retiree)

4 Responses to The Big Freeze Immobilizes Boomers

  1. I haven’t hit the retirement mark by any means, but I hope when that time comes I’ll be able to breathe easy. I feel bad for the people described in this article. Hope all works out well for them.

  2. MKR says:

    I am aghast at the responses of the interviewees. As tail-end Boomers (i.e. born 1962), my husband and I are nowhere near retirement. We are childless and relatively well-off because we have put a lot of money in the bank and live conservatively (examples: our newest car is 10 years old; our only debt is our mortgage on our house in which we have 50% equity at this point). We bought long-term care insurance over a decade ago when my husband’s workplace offered it. It wouldn’t cover everything if we had to tap it, but it would help. I will probably be laid off from my job of 10 years within two weeks but that will not cause us immediate (or even near term) financial hardship. We live as if there will not be Social Security by the time we get to that age, and we hope there won’t be Medicare because we don’t want it. We are working hard on staying so healthy that we are still the ones private health insurers want to ‘cherry-pick’ for the best plans. This is the 21st century and anyone who thinks there is not information available such as ‘some kind of formula to figure out what you need’ (Cincinnati pre-retireee), is just trying to make an excuse for being unwilling to do the work. There is plenty of advice and information available, but you can’t sit passively and expect it to fall into your lap. I have zero sympathy for that.

    • AP says:

      Kudos on what you and your husband have done! I too am a tail-end boomer, and I also have very little sympathy towards those who expect to be spoon-fed everything they need to know. There is plenty of information out there. I’m sorry about the person expecting to be able to retire at 63, but some 40% end up retiring early due to either forced retirement or medical reasons. If one does not plan for a future then one has no future.

  3. Only the people with no children seem to be able to save money. This was my conclusion when I worked in an IRS office. Easy to see who had interest income and dependents. The trend was amazingly clear. But who raised the caregivers the boomers will need soon, who sent the MD’s to school? The ones who won’t be able to afford the care.