Posts Tagged "aging"

Art saying Now what?

Recession Destabilizes Boomers’ Finances

The COVID-19 recession has changed everything.

This extreme disruption in our lives is always top of mind, which was reflected in our most widely read articles so far this year, based on the blog’s traffic.

Baby boomers, their retirement plans having been deeply affected by the Great Recession, are once again reassessing their finances. One popular article explained that the boomers who were in their early to late 50s during the previous recession lost about 3 percent of their total wealth at the time. This put their retirement planning at a distinct disadvantage compared with earlier generations in their 50s, whose wealth, rather than shrinking, grew 3 percent to 8 percent. The current recession is the second major setback in just over a decade.

Prior to the pandemic, readers liked articles about making careful retirement plans. Post-pandemic, the most popular article was about laid-off boomers desperate for income who may have to start their Social Security prematurely. The retirement benefits can be claimed as early as age 62, but doing so locks in the smallest possible monthly Social Security check – for life.

Even before Millennials were hit by the recession, they were already farther behind older generational groups when they were the same age. One article explained that the typical Millennial had just $12,000 in wealth. They are “the only generation to have fallen further behind” during the pre-pandemic recovery, the Federal Reserve said.

Here are a dozen of this blog’s most popular articles for the first half of 2020. They are grouped into three topics: COVID-19 and Your Finances, Retirement Planning, and Retirement Uncertainties.

COVID-19 and Your Finances:

Social Security Tapped More in Downturn

Lost Wealth Today vs the Great Recession

Boomers Facing Tough Financial DecisionsLearn More

Art of people at a job interview

Virus Complicates Boomers’ Job Searches

As laid-off baby boomers venture into the job market in the midst of the COVID-19 pandemic, they may sense it will be tough to find a position because, well, they’re too old.

New research indicates this suspicion is spot-on.

Discrimination is notoriously difficult to corroborate in academic studies. But researchers in Belgium, using a well-designed experiment conducted prior to the pandemic, found that company hiring managers working in 30 developed countries, including the United States, were much less likely to ask older job applicants to even come in for an interview.

The reason? They were perceived as having “lower technological skill, flexibility, and trainability levels,” the study concluded.

But there’s a big disconnect between this evidence of discrimination and a different report, based on a 2019 telephone survey, that employers view workers over age 55 as being at least – and sometimes more – productive than their younger colleagues. This survey also found that older workers are perceived more positively if the hiring manager is older. The findings provide some hope that, as the population ages, baby boomers who want to continue their careers may be able to do so.

However, even the authors of this study acknowledge two issues facing boomers. First, even when employers say they have positive perceptions of older workers, this posture “does not necessarily correspond with employer behavior.”

Second, given older workers’ underlying health conditions, COVID-19 is a wild card that could “adversely affect” their job prospects.

In any case, older job hunters will inevitably encounter some recruiters who will hold age against them. To overcome preconceived notions about older workers, the study of discriminatory recruiters provided some practical tips, based on the findings. …Learn More

Art work of the words Happy Retirement?

Retirement is Liberating – and Hard Work

Most baby boomers find the first weeks of retirement liberating. But it takes some work to ensure the feeling lasts.

“Almost everyone is just thrilled with the first days of retirement, and the big thing is: ‘I do not have to set my alarm,’ ” said Harvard Business School professor Teresa Amabile. Eventually, another thought dawns on a new retiree: “I don’t want to turn into one of those people who sits around in their jammies half the day. I need more of a routine.”

That’s when they start investigating what they’ll do with their time, said Amabile, who, with a team of researchers, interviewed 83 older professionals during their pre- or post-retirement years (or both) to understand the transformation from worker to retiree.

For a smooth transition, the planning should start well before leaving your job, as you process the question of how and when to retire. A critical part of the retirement decision is making sure you can afford it. But the psychological preparation is just as important.

This work, which boils down to four essential tasks, can take several years before and after the retirement date to complete. The first task – the decision to retire – was covered in last Thursday’s blog. Here are the remaining three:

Detach from work. Some people already have one foot in retirement while they’re still working. This can happen organically as an older worker starts to feel marginalized, or it can be a self-directed detachment as he or she becomes psychologically more distant in preparation for leaving. Amabile said completing the process of detaching from work can take weeks or years after retirement day. …Learn More

artwork of a woman's head

Education Could Shield Workers from AI

Not so long ago, computers were incapable of driving a car or translating a traveler’s question from English to Hindi.

Artificial intelligence changed all that.

Computers have advanced beyond the routine work they do so efficiently on assembly lines and in financial company back offices. Today, major advances in artificial intelligence, namely machine learning, have opened up a new pathway to expanding the tasks computers can do – and, potentially, the number of workers who may lose their jobs to progress over the next 20 years.

Machine learning works this way. A computer used to identify a cat by following explicit instructions telling it a cat has pointy ears, fur, and whiskers. Now, a computer can rapidly analyze and synthesize vast amounts of data to recognize a cat, based on millions of images labeled “cat” and “not-cat.” Eventually, the machine “learns” to see a cat.

But is this technological leap fundamentally different than past advances in terms of what it will mean for workers? And what about older workers, who arguably are more vulnerable to progress, because they have less time to see the payoff from updating their outmoded skills?

The answer, according to a third and final report in a series on technology’s impact on the labor market, is that advances in machine learning are likely to affect all workers – regardless of age – in the same way that computers have over the past 40 years.

And the dividing line, according to the Center for Retirement Research, will not be age. The dividing line will continue to be education: job options are expected to narrow for workers lacking a college degree or other specialized training, while jobs requiring these credentials will expand. …Learn More

Retiring in Florida: The Villages vs Reality

Photo of golf carts in a row

May all your dreams come true.

This hope, displayed on a sign in The Villages retirement community in north central Florida, is why thousands of people flock there every year to retire.

During my annual holiday trek to visit my 84-year-old mother in Orlando, my husband and I drove her to The Villages to visit her good friend who had moved there. What struck me was the contrast between its over-the-top comforts and my mother’s modest retirement community just outside Orlando, where many of the residents, who heavily depend on their Social Security, are just barely getting by.

The differences in lifestyles reflect the retirement disparities that exist in this country and are a continuation of the disparities in our working population. But I was also struck by the similarities in what retirees – regardless of their socioeconomic status – are seeking: to live out their remaining days healthy and without worry.

The Villages is 32-square-miles of unbridled growth. The 55+ community features three Disney-like town squares – Spanish Springs, Brownwood, and Sumter Lake – with a fourth, Southern Oaks, under development. Retirees zip along in colorful golf carts through the perfectly landscaped grounds on paths that were designed for the vehicles. The residents use the golf carts to move between their tidy houses, the town squares, activity centers, and one of The Villages’ 53 golf courses and 100 pickle ball courts. There’s even a gas station for golf carts – that’s how integral they are to retirees’ lives.

It seems that the box stores and supermarkets have been placed on the edges of this sprawling development so as not to spoil the vibe – retirees drive cars to these destinations. Also on the periphery are establishments catering to the unappealing aspects of growing old: laser eye surgery centers, dialysis centers, assisted living facilities, and funeral homes. Old age is tough – even in The Villages. For example, my mother’s friend lost her husband and then – a few years later – her fiancé died.

Photo of a man golfingThe Villages’ creature comforts are expensive. Prices are high by the standards of Florida’s interior, ranging between $250,000 and $800,000. Residents often pay for them by selling a house up north to cash in on the appreciation. They also pay an assessment to cover the development’s infrastructure costs and a monthly fee of just over $1,000 for utilities, trash pickup and endless amenities, which, in addition to golf, include numerous activity centers, lakes for fishing, and easy access to the town centers’ restaurants, Starbucks, shopping, and movie theaters.

But this enclave of privilege and play doesn’t reflect the reality for most retirees. My straight-talking Midwestern mom’s assessment of The Villages is, simply, “I can’t afford it.” …Learn More

The Art of Persuasion and Social Security

Retirees could get substantially more in their Social Security check if they would just wait longer – up to age 70 – to sign up.

Bar graph showing Social Security claiming agesBut only a tiny fraction of workers make it to 70, and more than a third get the minimum monthly benefits because they start them as soon as the program allows, at 62. A Bocconi University professor and three UCLA professors have set about trying to change minds by testing 13 ways of encouraging older workers to hold off and lock in a larger Social Security check.

The techniques, which they tried on various groups of workers between ages 40 and 61, ranged widely in approach. But two of the most successful tests had one thing in common: participants were asked to engage in a little reflection about the personal impact of choosing when to start receiving their Social Security. This approach departed from the more common strategy of trying to influence people by feeding them financial or other information.

Everyone began the same way: they saw a table showing how much more they would receive from Social Security for each year after 62 that they delayed. One of the most effective tests was an exercise in self-reflection. The participants were asked to list “their own reasons” for how delaying would help them personally. Only after this step did they list the reasons to start their benefits at a younger age.

The order of these requests was intentional and intended to counteract the tendency by most people to focus on their short-term desires. This group reported that they intended to sign up 10 months later than the control group, which wasn’t exposed to the test, according to the study conducted for the Retirement Research Consortium. …Learn More

A Brighter Future for a Graying Workforce

Perceptions of older workers haven’t caught up with the reality of their increasingly prominent role in the labor force.

The federal Administration for Community Living reports that the U.S. population over age 60 has surged nearly 40 percent in just the past decade. By 2030, retirees will outnumber children for the first time in history, the U.S. Census Bureau predicts. The world population is on a similar path.

But in the face of this significant demographic shift, discriminatory views of older people persist in obvious and subtle ways. This discrimination colors coworkers’ beliefs about, among other things, older workers’ mental ability, efficiency, and competence on the job, according to one international review of studies on aging.

When people think about the future, “they fail to appreciate the potential that older workers present as workers and consumers,” Paul Irving, an expert on aging, writes in a special November edition of the Harvard Business Review exploring issues relevant to our aging workforce.

Research backs him up. Older people are living longer than past generations, which gives them more capacity to extend their work lives. They’re also generally healthier and enjoy more disability-free years, thanks to innovations like cataract surgery to restore their vision.

But ageism’s consequences are still apparent in the workplace. An Urban Institute report said that older workers, for a variety of reasons, are frequently pushed or nudged out of a long-term job at some point late in their careers. Some are forced into early retirement. And for those who do find another job, the new opportunities, while less stressful, are often a step down in terms of prestige and pay.

Irving, who is chairman of the Milken Institute’s Center for the Future of Aging, wants to chart a more hopeful path for our graying U.S. workforce, one that views it as an opportunity – rather than a looming crisis. …Learn More