A study by the Stanford Center on Longevity points to two troubling statistics for older workers approaching retirement: (1) one-third of them have NO retirement savings, and (2) for those who have savings, the median balance is about $200,000. The harsh reality associated with either of these scenarios is that they demonstrate why traditional retirement is a big stretch for so many Americans. Layer the economic impact of the pandemic on top of under-funded retirement savings and it's easy to see why many Boomers realize they'll need to keep generating income for the foreseeable future.

The average middle-income Boomer can't solve the problem overnight, but a plan developed by the Stanford Center on Longevity in association with the Society of Actuaries -- the "Spend Safely in Retirement Strategy" -- is a practical retirement income-generating strategy. Financial expert Steve Vernon, a research scholar at the Stanford Center on Longevity, discusses it in an article published in the January 2021 issue of Benefits Magazine. He suggests that most pre-retirees need to address the following five decisions:

1. When and how to retire, including whether to work part-time for a period of time
2. When to start Social Security benefits
3. How to deploy retirement savings to generate retirement income
4. Which living expenses, including the cost of housing (which is often retirees' largest living expense), to reduce in order to live on less income in retirement
5. Whether to deploy home equity by realizing capital gains and and reinvesting the proceeds to generate retirement income or by purchasing a reverse mortgage.

In the article, Vernon describes five possible scenarios as an illustration of how such a strategy might work. The example uses a hypothetical 62-year old married couple with household earnings of $100,000 annually and retirement savings of $350,000. The scenarios are designed to show the differences in retirement income generated by the couple if they follow certain paths: (1) retire at 62, (2) Work part-time until retirement at the full retirement age of 66-1/2, (3) Work full-time until retirement at the full retirement age of 66-1/2, (4) Work part-time until retirement at age 70, (5) Work full-time until retirement at age 70.

Factoring in both Social Security and the drawdown of retirement savings, the illustration shows that the couple can significantly increase initial total income, from $37,585 in scenario 1 to $70,755 in scenario 5. The good news is that, even scenario 2 produces initial total income of $51,526 -- an increase of almost $14,000 over scenario 1. The comparison demonstrates that the increases between working part-time and full-time are not as dramatic as the increase between not working at all and working part-time. In other words, working part-time until age 66-1/2 or 70 can really pay off. As Steve Vernon points out, "These analyses show the potential advantage of a downshifting strategy for older workers who don't want to or can't continue working full-time but haven't saved enough for complete retirement."

The example above offers an optimistic outcome for those individuals who are in a position to at least generate some income even after retiring from full-time work. Most everyone approaching retirement has to be an income juggler. This is where a financial advisor can really help. It's all about understanding the unique combination of work, retirement savings, Social Security benefits and income from other sources offers the best balancing act for you. 

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Regardless of age, accumulating debt is a way of life for many Americans, in particular Boomers. Even our federal government carries a heavy debt load.

We learn at a fairly young age about buying on credit. We continue to pay off student debt decades after completing college or graduate school. In order to buy a house, we obtain a loan (otherwise known as a mortgage) and pay interest on the principal for many years. Additional debt may accumulate through multiple credit cards, automobile loans and home equity lines of credit. 

Boomers are in an especially precarious position when it comes to debt. According to Experian, Boomers carry average total non-mortgage debt of $25,812. This unsettling number includes credit cards, store cards, personal loans and other non-mortgage accounts. The average mortgage debt for Boomers is $191,650. The average credit card balance carried by Boomers is $6,747. Boomers typically hold more credit cards than any other generation.

In August 2018, The New York Times reported on a study that showed Boomer bankruptcies were three times higher than in 1991, with bankruptcies for Boomers far exceeding all other filers. A more recent Times article (April 18, 2021) indicated that the pandemic has not made things any easier for Boomers. A new survey suggested Boomers had doubled their non-mortgage debt in 2020. Boomers commonly put expenses on credit cards and carry balances month-to-month, reports Susan B. Garland. She writes, "Also driving this rising debt load are soaring medical costs, the steep decline in pensions, growing housing expenses and low interest rates on savings. To make ends meet, many older adults are known to skip meals and to cut pills to stretch prescriptions, according to a survey by the National Council on Aging."

Boomers accumulate debt in another way that would have been unthinkable in prior years. During the pandemic and even beforehand, Boomers have been put in the unenviable position of helping their adult children financially. According to The New York Times article, the Employee Benefit Research Institute "found that 59 percent of people ages 65 to 74 who helped family members carried debt, compared with 47 percent who did not help." 

Eventually, debt catches up with Boomers -- and it can come with a big price tag. It is all too easy to consolidate expenses onto credit cards, only to find monthly payments ballooning and interest charges spiraling higher. That's when it may be time to get the assistance of a credit counseling agency. But buyer beware -- there are some "debt settlement" companies that can prey on desperate debtors, according to the balance: "Persuasive advertisements might promise you an easy way out of debt, or a way to simplify your payments. But these services often tack on expensive fees, it’s often not clearly explained what potentially negative effects debt settlement can have on your credit score."

Here are three key ways Boomers can ease their debt burden, according to Credit.org:

1. Control credit card debt. "Toss the junk mail. Cut financial ties with your adult children. Pay off credit cards first, before other debt."
2. Minimize medical debt. "Research health insurance options. Build health expenses into your retirement budget. Negotiate with healthcare providers."
3. Pay off your mortgage. "Break big goals into small steps. Roll other debt payments toward mortgage. Think twice before refinancing."

Debt is a big deal for Americans. The balance reports that Americans accumulated $14.56 trillion of debt as of 2020, with $462 billion of that debt considered delinquent. If you are in debt, you are definitely not alone.

Still, carrying a heavy debt burden is no fun, and it is especially painful for Boomers.

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Almost two years ago, I wrote a blog post entitled "The Retirement Boomerang." In that post, I cited a study that showed almost half of workers age 65 or above who retired "boomeranged" back to work. They didn't necessarily want to return to the same job, but they felt a sense of loss when they stopped working.

Many Boomers leave the workforce and then seek out a new career, or a second act, rather than pursue traditional retirement. My wife and I experienced this phenomenon when we left busy professional careers. We weren't ready to kick back our heels and drink lemonade just yet; instead of retiring, we started a small business together and ran it for about seven years before selling it. That was a great transition that eased us into a slower pace of life. Now I work part-time as a freelance writer and have time for volunteering and recreation. Like many Boomers, I take advantage of skills honed during my worklife, but I apply them to things I want to do on my own terms rather than pursuing a full-time professional career. I've "rewired" instead of being retired.

Of course, things have significantly shifted during the pandemic for many of us. Some Boomers who were planning to retire may be experiencing a whole different kind of boomerang -- having been thrown out of the workforce, they are thrown right back into searching for a position. Others who have been ejected from a job may see it as a time to rethink their future; statistics show that a substantial number of Boomers who feel financially secure are in fact leaving the job market permanently.

Even so, retiring from work can be psychologically disconcerting if not traumatic. Writing for Kiplinger, financial adviser Kara Duckworth says she is seeing an unexpected pattern in discussions with her clients: "Instead of worrying about whether they’ll have enough saved to enjoy retirement, they’re worrying about whether they’ll enjoy retirement at all." She adds, "For some people, retiring from being an expert in their field or having a prestigious job feels like giving up part of the identity they have worked very hard to earn."

Duckworth offers a few valuable tips for those who are having trouble coping with the idea of retirement:

1. Consider slowing down at work instead of stopping completely.
2. Try before you buy.
3. Plan to explore new things.

Check out more of what she has to say in her article:
https://www.kiplinger.com/retirement/happy-retirement/602502/help-im-afraid-to-retire-even-though-i-can-afford-to

There is no single path through retirement, rewirement, reinvention, or whatever you want to call it. You have to chart your own individual course. And you have to be courageous enough to change it if things aren't working out the way you want.

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Have you noticed the term “DE&I” bandied about lately by politicians, business leaders and heads of institutions? If you’re “woke,” then you know it stands for “Diversity, Equity & Inclusion.” What does that really mean? In the context of government or business policies, it basically represents treating everyone equally, regardless of social standing, race, sexual preference or any other distinguishing characteristic. Think of it as a three-legged stool that broadly applies to welcoming in people of less-privileged identities. Here are definitions of each of the three legs from Independent Sector:

Diversity “includes all the ways in which people differ, encompassing the different characteristics that make one individual or group different from another,” including identity markers such as race, ethnicity, gender, disability, sexual orientation, religion, and more. It also takes intersectional diversity into account, when people’s identity is made of a number of underrepresented identities.

Equity is “the fair treatment, access, opportunity, and advancement for all people, while at the same time striving to identify and eliminate barriers that have prevented the full participation of some groups. Improving equity involves increasing justice and fairness within the procedures and processes of institutions or systems, as well as in their distribution of resources.”

Inclusion is “the act of creating environments in which any individual or group can be and feel welcomed, respected, supported, and valued to fully participate. An inclusive and welcoming climate embraces differences and offers respect in words and actions for all people.”

Sadly, it seems that awareness of DE&I is a recent occurrence. It’s only now, because of the compelling roles played by such movements as “MeToo” and “Black Lives Matter,” that our society has reawakened to issues of inequality that have been festering for decades. Thankfully, many Americans are finally realizing that there really are significant inequities in our society, made even more vivid due to the pandemic. The fact is, the old saying is still true in our country: “The rich get richer, and the poor get poorer.”

As a Boomer, I have to wonder where American leaders have been for the last fifty-plus years. Wasn’t it our generation that helped fight for DE&I in the Sixties? Didn’t many of us protest, march, sit in, get jailed and even die in support of civil rights, racial and gender equality and social justice? Yet, those Boomers in positions of power today, struck by a serious case of amnesia, boast about their commitment to DE&I like it’s something new.

Don’t get me wrong — I for one am heartened to see that DE&I is very much in vogue right now. Despite the current movement to restrict voting rights in several states (thereby disenfranchising America's most under-served populations), it’s particularly encouraging to see the recent recognition of societal inequity by the federal government. Still, I truly hope that people in power are not merely paying lip service to DE&I in an effort to trade on its PR value. They need to understand the depth of its meaning and make a real commitment to fundamental change.

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Ageism is a global issue, as I indicated in my previous post. One powerful and potentially lasting way to fight against ageism is to foster greater connections between older and younger generations. The generational divide -- caused as much by tribalism as by age -- may seem difficult to overcome, but there are beacons of light in the darkness that can help us envision an intergenerational world. Here are three innovative examples:

Encore.org - Encore is a vanguard in bringing together generations. According to this nonprofit organization, "For the first time in U.S. history, people over 60 outnumber people under 18, raising fears of widening generational divides. Encore.org sees another path — a more-old-than-young society that works for all generations. By accelerating intergenerational solutions to pressing social problems from literacy to loneliness, Encore.org bridges divides and collaborates across generations to create a better future together." Founder Marc Freedman writes eloquently about the topic, and Encore.org affirms its commitment by sponsoring "Gen2Gen" fellowships.

Mon Ami - Two Stanford MBAs, Madeline Dangerfield-Cha and Joy Zhang, co-founded Mon Ami to challenge the asumption that "young is immature and old obsolete." In an article for the Stanford Social Innovation Review, they write, "The organization began as a direct service platform, leveraging gig technology to match older adults and their families with college students, who visited weekly to engage in social activities such as playing Scrabble, writing memoirs, and going on walks. ... By March 2020, when COVID-19 hit, hundreds of students enrolled at colleges in the Bay Area of California had provided more than 10,000 hours of companionship to older adults, either in their homes or at their assisted living facilities." In their article, Dangerfield-Cha and Zhang cite two other tech apps/platforms, "Papa" and "Big& Mini," that are innovating in this space.

UpsideHom - Highlighted recently by The Longevity Project, UpsideHom is a startup that focuses on intergenerational living. Launched last year in Florida, the company's goal "is to allow older people to age in place inside multi-generational living communities, primarily apartment buildings that do not necessarily cater to the needs of older renters. To support that, they offer fully-supported units inside these apartment communities – bundling together furniture, maintenance, housekeeping services and so forth – to make it easier to age in place." Founder and CEO Jake Rothstein told The Longevity Project in an interview, "Aging in place versus aging in the right place is something that people really need to think about. ...this decision is a very, very big one, an impactful one that affects themselves and the family members that care for them. Building trust throughout the journey is a real challenge, and probably one that traditional assisted living facilities face as well. ...Educating people in order to build that trust is really the biggest challenge, I would say."

These examples are both inspiring and prescient. Each of them suggests in their own way the potential for generations to interact, learn from each other and potentially live side by side. What better way to combat ageism than to have generations understand, appreciate, assist and respect one another.

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