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Who Will Be Supporting Retired Workers In 2020?

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In 1950 there were 16.5 workers for every retired worker. In 2012 the ratio was reduced to
3.3 to 1. By 2020 that ratio is projected at 2.2 to 1 and to almost 2 to 1 by 2030. Is anyone considering these projections and their implications for the U.S. economy?

Actually, there is good news. Thirty years were added to longevity in the 20th century; Gary Becker, an economics professor at the University of Chicago and Pulitzer Prize winner has called this the greatest gift of the 20th century. The U.S. has moved from an industrial to a knowledge-based economy; in fact, only 11 percent of the civilian workforce is employed in industrial companies and 84 percent in service companies. And we have a large and growing talent pool of Baby Boomers, 80 percent of whom, according to a 2011 survey conducted by AARP, indicate their intent to continue working after retirement.

The reality is that with the dramatic increase in longevity in the 20th century, millions of people
are qualified and ready to continue working after the traditional retirement age of 65. This is very good news because we have a large and growing talent pool with experience, expertise,
seasoned judgment, and proven performance (we call this EESP) to meet the workforce needs
of the 21st century.

Let's talk about the definition of retirement because we need a new word. Here is the definition
from Webster's II New College Dictionary: "to remove from active service; to remove from
circulation." Fortunately, many of the Baby Boomers will be moving from retirement into
rehirement, or perhaps into rewirement.

There is one more piece of good news. In a survey sponsored by 24 major companies and
completed by Harris Interactive in November 2011, "Survey on the Strategic Involvement of HR
in Fortune 1000 Companies
," 24 percent of the companies reported that they had developed flexible workplace options for people who want to work on a part-time basis. More companies will be doing the same as the economy improves and they recognize the need to provide such options to retain and attract older workers. In fact, more flexibility will be required in managing tomorrow's workforce, including Gen Ys and the Millennials who indicate that work flexibility is important.

Now for the bad news. Americans still retain the mindset that when you reach a certain age
(pick 55, 60, or 65), you are out of the game and the headlights are getting dim. This mindset
needs to be changed to accord with the demographic realities: a new and third-stage of
adulthood has been created from 62-85; this concept was provided in a paper co-authored in 2000 by Dr. Elliott Jaques, who introduced the notion of the mid-life crisis in 1965. We need to recalibrate our thinking for this new reality. If we fail to do so and these Baby Boomers are pushed to the sidelines, our entitlement programs (e.g. Social Security and Medicare) will become unsustainable even sooner than projected.

Another piece of news, which some will call bad, is that the retirement age needs to be increased to 70 and the early retirement age to 67, then linked to further longevity gains. These changes must clearly be done equitably and gradually over a number of years. But it is essential that the age be changed from a Social Security Act passed in 1935 when the retirement age was set at 65 because few people lived longer.

The bad news will get even worse if we don't take action now to increase the retirement age.
Quoting Winston Churchill: "Americans can always be counted on to do the right thing... after
exhausting all of the other alternatives."

Closing on a positive note, documented research (the MacArthur Foundation Study on Aging in
America) demonstrates that older people who continue working beyond traditional retirement
age live longer, enjoy better health and report greater satisfaction with life than those who
don't. Working longer may not be for everyone, but it can contribute to a better quality of life
for many older people.

William Zinke is the founder and president of The Center for Productive Longevity, a nonprofit whose mission is to stimulate the substantially increased engagement of people 55 and older in productive activities, paid and volunteer, where they are qualified and ready to continue adding value.

EARLIER ON HUFF/POST50: Charles Schwab's 2012 Older Workers and Money Survey

Charles Schwab Older Workers & Money Survey 2012
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