Betting on retirement


Baby boomers have started retiring. As Harry Carey would have said, "Holy Cow!"

January 1, 2008 marked the retirement of the first baby boomer, born just after midnight on January 1, 1946. Let the good times roll, or so we hope. From now until about 2020, approximately 7,900 boomers will be eligible for retirement at age 62 each day, or about 330 each hour.

Now, this assumes that boomers will be able to retire at age 62, which is a big assumption, particularly with the present economic crisis. In fact, it my be a big assumption that boomers are going to be able to retire, period. If boomers don't retire at age 62, they will have to wait until age 66-67 before they can partake of social security. Either way, it's getting a bit shaky at the moment. Which age boomers choose remains to be seen. So far, no data has been published as to how many are retiring at age 62.

One of the trends that is likely to emerge is for boomers to retire around age 62-64 from the jobs they are currently doing, and supplement their social security income with new jobs. A sort of "I'm tired of the same old thing I have been doing, so I think I'll try something new." Currently, that supplemental income can amount to about $12,250 per year before penalties on social security becomes an issue. At the time of your full retirement age, you can again go back to making as much money as you want, without any social security penalties.

There are a lot of factors that will go into our decision to retire early, or wait. A couple of the major ones include, 1. Will I have enough money? 2. What about health insurance? 3. The effects the economy will have on your retirement funds, and 4. Do I believe social security will continue to be a viable income source?

1. Will I have enough money is a question with no one answer? Each boomer will need to answer that question for themselves. There are tens of issues making up the answers. How much do I have saved? What is the lifestyle I desire to lead? What other sources of income do I have? Where do I want to live? The questions go on and on, and there are no simple answers. They are each individual and somewhat mind-boggling.

2. What about health insurance? Boomers will still get Medicare at age 65, but what about insurance for those boomers retiring early? Some will continue to get coverage from the company they retired from, although these situations are becoming fewer and fewer, and as many retirees have found out, there are no guarantees. A lifetime of hard work and loyalty no longer means a whole lot to many companies. Some go bankrupt, sell out, move, and the whole deal falls apart. A solution that will resolve this problem is universal health-care. This will happen for this very fact. Boomers will demand it. And guess who comprises the largest voting block in this country?

3. The effect of the economy is a hard one to measure. For those boomers who have retirement accounts attached to mutual funds and/or the market, our totals go up and down like yo-yos being played with by the politicians. We are currently down, some way down. It is a trying time, but in a capitalist society, the market will always come back. The rich don't favor living on the street. For us, it's just a matter of having enough time to wait it out. If you can't sleep at night, move into money market funds or CDs, or pray a lot.

4. And finally, will the social security system remain a viable income source for us? By most accounts, the answer is yes, at least until 2041 by current estimates. That will be long enough to take care of most of us. I'm afraid the next generation will have to fend for themselves. We wish them well.

So, retirement is going to be something of a venture. I suppose we wouldn't want to have it any other way. We will change the concept of retirement, mixing work with play in a way that has never been done. Frankly, I'm hoping play wins out, but it's getting a little shaky.