Water Cooler August 2014: Baby Boomers – should they stay or should they go?

babyboomersBy Melany Hallam

Take the Water Cooler Survey now at http://www.careerlinkbc.com/blog.php

Should baby boomers retire to make room for younger workers?

  • Absolutely, they’ve had it too good for too long
  • Heck no, they’re the backbone of our economy
  • Jobs should be given to the best qualified candidates, no matter what age
  • What’s a baby boomer?

Who are baby boomers?

People born in the 20-year period between the end of World War II (1946) and about 1965, are considered baby boomers. Economic conditions improved quickly after the war ended and, at the same time, there was trend toward larger families. The resulting cohort of baby boomers has had a great deal of influence over Canada’s economy and society and continues to do so as they age and retire. In 2011, the oldest of the baby boomers turned 65. Very soon, according to Statistics Canada, the number of Canadians older than 65 will be greater than the number of children, for the first time in history.

Why are boomers working longer?

A large number of boomers have not been able to save or invest enough to live comfortably in retirement. There are many reasons for this. Taking from her own experience, Marie Engen describes a typical boomer financial timeline on the website Boomer and Echo explaining this phenomenon:

  • Many boomers were brought up by parents who grew up during the Depression and were, therefore, very thrifty. These boomers grew up with a lack of material things.
  • In the 80’s, when boomers were entering the job market and beginning to buy homes, inflation and interest rates went through the roof. Mortgage rates went as high as 24% – and these were mainstream banks!
  • And then came Chargex, the precursor to the Visa card. Suddenly they had credit (at the same exorbitantly high interest rates as the mortgage rates above), and could buy all of those things they couldn’t have when they were growing up.
  • Needless to say, all of their ready cash went to paying interest on loans and credit cards. Saving just did not happen.
  • Once boomers realized that investing was imperative to retirement, many went deep into mutual funds. And then there was the market crash of 1987, the “Asian Flu” in 1998, the tech stock collapse in 2000 and, more recently, the mortgage fiasco in 2008. Mutual fund investors had great difficulty rebounding from all of this. So, still no savings.
  • RRSPs were introduced in 1957 but, even today, only 25% of Canadian tax filers make RRSP contributions. These days, investors are lucky to get 4%, while boomers’ parents were receiving 14% and more on their investments and could afford to retire on their own savings.
  • There are social programs such as CPP to support retirees. However, CPP is funded by people who are currently working, and the number of seniors in Canada will soon be larger than the workers supporting it. Boomers saw their parents being supported by social programs in their old age, but are unlikely to receive that same level of support in their own retirement.

I could go on, but let’s stop there. This list is a generalization, but you get the idea.

What next?

The generations coming up behind the boomers (generations X, Y and Z, the internet generation) are in line for their jobs when the boomers retire. The common belief is that this means that they could be waiting longer get a job and waiting longer for promotions at work. But this may not be true and, in fact, the news isn’t all negative. Here are some ideas and surprising facts on employment for younger generations:

  • According to a 2012 study by the Centre for Retirement Research at Boston College in the US (http://crr.bc.edu/wp-content/uploads/2012/07/IB_12-13-508.pdf), the greater number of older persons employed led to better outcomes for the young, including reduced unemployment and a higher wage.
  • Skills and knowledge can be passed along by seniors who stay on past age 65, making the transition to younger, less experienced workers much smoother in the long term.
  • Semi-retired boomers may be looking for more part-time work. This could result in a greater number of part-time jobs options for everyone (if you’re looking for that kind of work schedule).
  • Older workers may not keep up with technology as well as younger people do, so promoting your own technology skills and knowledge could mean better job opportunities.
  • A representative at TalentEgg.ca, a popular job and career resource website for students and recent graduates in Ontario, argues that one of the greatest barriers to employment for younger workers isn’t boomers, but employers’ perception of Generation Ys as lazy or entitled.
  • Boomers who work longer are still earning and are, therefore, buying and consuming at rates greater than your typical retiree. This is good for the economy and the job market in general.


The bottom line

In the end – whatever generation you’re part of – everyone’s situation is unique. But one thing won’t change: large numbers of boomers will be retiring from now up until 2030, when the youngest of them turn 65. It’s a fact that all of us – younger generations, boomers, employers, government – will be living with, whether we want to or not. Deal with it. Or, even better, make it work for you!




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