Retirement and Aging: Predictions for 2009

For journalists, the new year is a time for crystal ball gazing, despite our miserable track record as forecasters.

Making predictions for 2009 is especially treacherous, considering the instability we're living through. That didn't stop me from assembling a forecast for a recent column on the top trends for 2009 affecting retirement and aging. I did want to improve my odds -- or maybe just spread the risk -- so I also asked some of the smartest people I've interviewed over the past year for their thoughts, too.

What follows are a few of the most interesting predictions that emerged; you can read the complete list at RetirementRevised.

Health care reform. Comprehensive health care reform legislation will be introduced, and a bill signed into law no later than early 2010 -- with enormous implications for retired people. President-elect Obama's health plan calls for covering anyone lacking employer-based insurance, which would be a huge boost for people who retire or lose their jobs before age 65, when Medicare eligibility starts. And, look for Medicare reform to be packaged together with broader health care legislation. Obama's economic recovery package also likely will include shorter-term health care measures aimed at tiding people through the recession, such as beefed-up COBRA or Medicaid provisions for laid-off workers.

Working longer. "More people will work into their 60s, delaying retirement," says Richard Johnson, principal researcher at the Urban Institute and an expert on retirement issues. "Despite the gloomy job market, more older people will be employed this year than we've seen in decades, because plunging stock values, sagging housing prices, and rising health care costs make retirement unaffordable. However, I expect to see fewer job changes at older ages. In the recent past, many older people have moved into new careers that are often less demanding but more enjoyable than their previous jobs. These transitions will become less common as the recession makes new jobs hard to come by."

Working longer -- with purpose. "The reality of longer working lives -- building for years -- has been cemented by the economic downturn," says Marc Freedman, CEO of Civic Ventures, the think tank focused on engaging older adults in socially meaningful work. But Freedman doesn't agree with Johnson that people will stay where they are. "More and more Americans over 50 will find themselves searching for an alternative to another decade at the grindstone, looking for a new blend of income, purpose, and contribution."

Higher education redefined. "Higher education will wake up to an entirely new definition of lifelong learning, an alternative to traditional self-development courses aimed at older Americans," Freedman predicts. "A new kind of school for the second half of life will emerge at every level, serving as the harbingers of a new kind of pathway between midlife and the new stage of life being created between the middle years and true old age."

Networking for life reinvention. "Many jobs will be lost due to the grim economy, and old skills might not apply," says Susan Ayers Walker, who writes about technology for AARP.org. "New skills will have to learned, resumes refreshed, creative networking skills applied using unconventional methods. Instead of filling out an a paper application followed by a face-to-face interview, it might mean networking on LinkedIn and other social networks."

Pension tension. More companies will freeze their defined benefit plans and/or eliminate their 401(k) matches. Additionally, more companies will turn over their plan assets to the Pension Benefit Guarantee Corporation (PBGC), the federal agency that insures pensions. The PBGC only insures recipients up to the benefits they are owed assuming retirement at age 65, which means some beneficiaries will take haircuts.

Retirement security overhaul. The pension and 401(k) meltdowns will spark a national debate on retirement savings, and possibly an overhaul of the current model for retirement security. On the table for discussion: automatic IRAs and tax incentives aimed at restoring traditional defined benefit pensions.

I hope you'll add your thoughts to this list -- leave a comment below!

Comments

[WOW-Online]

I agree that healthcare reform will be one of the top agenda items of an Obama administration. This can be a great thing for elders, who do not have adequate health insurance because it is the greatest out-of-pocket expense for elders in poor health and second greatest for those in good health. A comprehensive, affordable, system needs to be put in place. A report came out this week saying that enrollment in Medicare Advantage increased my 1 million in 7 months. This is partly because basic Medicare is not meeting the needs of elders.
The Elder Economic Security Initiative Standard Index (Index) created by Wider Opportunities for Women and the Gerontology Institute at University of Massachusetts Boston is an all encompassing measure of economic security for elders. It takes into account healthcare costs dependent upon geographic region because costs vary dependent upon where an elder resides. For example, in Milwaukee, Wisconsin, monthly health care costs for an elder in good health is $402, while in Black River Falls the monthly cost for that same elder would be $387, according to the Index.
I look forward to the New Year and new initiatives and legislation brought forth to Congress and the President, and hope that when relevant each is supportive of elders" right to age in place.
For more information about the Elder Economic Security Standard Index, visit
http://www.wowonline.org/ourprograms/eesi/eess.asp
Blog about elder economic security at http://www.wow-eesi.blogspot.com

[cylindar]

The stats are showing that baby boomers are using their early retirement option for social security in greater numbers. People want out of the abusive system they have been chained to and in my opinion will create more and start new businesses around early retirement age. It does not pay to stay in the work force unless you are working for yourself after age 62. For those who do try to stay in the job market there will be great dissapointment as younger people will wipe them out in regard to job competition and they are going to suffer mightily. More than likely older folks will tend to get laid off in greater numbers than younger people. That is the way of the world --watch out and don't say I didn't tell you so.

[Mark Miller - Huffpost Blogger]

Cylindar, I agree with you that we'll see larger numbers of start-ups. But I would also suggest that taking Social Security early (at age 62) isn't the best course of action for most people. In most cases, you wind up losing alot of benefits over the course of a lifetime... so, funding a start-up some other way is better.

For more on the social security question, see:
http://retirementrevised.com/column/social-security-the-compelling-case-against-filing-for-early-benefits

For more on boomer start-ups, see:
http://retirementrevised.com/column/50-plus-entrepreneurs-starting-lifestyle-businesses

[SisterAnn]

They should let Medicare start when people retire, not when they turn 65. Also they should let the spouse take Medicare when the older spouse take it. It could help Medicare by putting people who are younger into the program.

Most people want to work and plan to work to full retirement age, but it should never be mandated. Too many elderly are being pushed out of the work force and have to retire. It is set up about right now, people can retire at 62 with a 25% cut in benefits or retire at full retirement age of between 66 or 67 and can even work longer than that. Too many die before reaching 70. Raising the full retirement age to 70 should never be done.

People need to retire so the young families can have more jobs. Most people do get frail and forgetful when they get older.

We would be safer not having our 401k money in the hands of Wall Street until they pass laws to prevent what has happened from happening again. They say everything was legal, but it has hurt investors, so make it illegal.

[candyc]

The fact that Medicare only covers the retiring worker and not the younger spouse is a terrible problem. My poor husband is 66 and still working at a job he hates because if he retires I will be without insurance at the age of 60.

[vstar]

Bring it on! Things can't change for the better fast enough, especially with healthcare and retirement.