Why are baby boomers retiring later than other generations? Will millennials be able to retire in their 60s? Will Social Security be around in 50 years? These questions have raised new concerns about the ability of seniors to retire in the wake of a still-recovering economy.
Yet there may be good news for millennials according to Dr. Shantanu Bagchi, an economics professor at Towson University. Bagchi says the increased life expectancy in the United States from the low 60s when Social Security was established to the upper 70s today has given baby boomers an incentive to work longer, thereby generating more money for Social Security.
“Once you account for the fact that individuals are going to respond to these longer lifespans by living longer, they’re ultimately contributing to Social Security,” he said.
Bagchi says that many middle- and upper-middle-class people are working longer because their jobs do not require a retooling of skills, particularly those in academia where the retirement age is around 80.
“The folks who are doing that are not required to do any new skills or take any additional risks,” he said. “The skills that they’ve picked up in that kind of job are relatively easy to transfer.”
Bagchi emphasized that the population most at risk is the next generation of blue-collar workers, which he thinks will have a difficult time obtaining the skills necessary to succeed. He expects competition for part-time jobs to increase between generations, but that millennials will have an advantage when they apply for full-time work.
“In full-time professions, even if there is increased competition for those types of jobs, the folks who come out of college today are going to have an edge over older workers,” he said.
At Jewish Community Services in Baltimore, career coach Sherri Sacks said many of the people she sees have had some type of life change that has affected their economic situation.
“Some need to work because paying for medicine is a large expense,” she said. “For some, Social Security alone isn’t enough. Some have to choose between food and prescriptions.”
Sacks said of the seniors she sees, some are supporting their children, and some are supporting their parents.
She said JCS has 13 coaches and each specializes in a different area of expertise in trying to find jobs that match the skills of their clients.
]“We look at their resume, we look at their most recent work experience,” she said. “We ask about their computer skills and technology and how up to date they are with that. And there are some people who have restrictions as far as not traveling at night or too far.”
Sacks said JCS ends up referring a number of seniors to a training program or a community college in order to get a “refresher” course on areas with which they are not comfortable, such as technology. She said being computer literate makes networking easier and can often made the difference when it comes to finding a job.
“I think that what we need to update seniors with is social media,” she said.
Sacks said she thinks the later retirement of baby boomers is due to them not being able to cover their expenses with Social Security alone. Future generations will not have the benefit of a healthy economy that their parents had.
“I think that younger generations may need to recognize that people are living longer and working longer,” she said. “It’s not as easy to save money and have an extra cushion. People have to work longer to support themselves.”
Bagchi says the lack of political will in the country to balance the budget is one of the largest economic threats facing millennials. He tells his students that programs such as Social Security and government pensions will still exist in 50 years, but there may not be as much to go around.
“What I tell them is that the odds are extremely low that there will not be any Social Security when they retire, but it will look very different from where it is right now,” he said.
Bagchi says the economic concerns of millennials are valid, but the jury is still out on exactly how difficult it will be to obtain jobs.
“They will have jobs in an economy that is severely fiscally unbalanced compared with what their parents were raised in,” he said.