The reality of America's aging population, at this point, shocks no one. Still, as Baby Boomers near retirement age, one remaining gorilla-in-the-living-room topic is the nation's capacity or rather, incapacity to deal with 75 million people, or 26 percent of the U.S. population, avalanching into a 20- to 30-year life stage with prospects of low to zero income.
On September 8, the chairman of the Federal Reserve Board, Alan Greenspan, gave extraordinary parenthetical emphasis to the topic in his testimony before the House of Representatives, which, on the face of it, was his outlook on the U.S. economy. In introductory remarks, he averred that the economy had continued on its path to recovery following a slight pause in the middle of the summer. He attributed the brief stall in the process to increases in oil prices, which have since receded. However, the second half of his comments took a dire, futuristic turn. With Baby Boomers starting to retire in a few years and health spending continuing to soar, our budget position will almost surely deteriorate substantially in coming years if current policies remain in place, he said.
Another comment that the Fed chairman made should come as a warning to those Boomers at the brink of their 60s: As a nation, we may have already made promises to coming generations of retirees that we will be unable to fulfill. If Greenspan knew that as many as a third of American Baby Boomers appear to be headed for more paychecks, more taxes and added contribution to social welfare programs, we wonder how he'd feel about the nation's chances of coming through on those promises.
Whether it's in response to such warnings or not, many Boomers just don't see retirement as a near-term option. In fact, many are looking for a second career. Some of them have begun to leverage expertise accrued during their early years of employment, and have developed consulting businesses or other opportunities in the service sector as more reliable options than government assistance to support themselves through the next stretch of their lives.
To find out how many Boomers have decided to start a second career, and what lines of work they plan to go into, American Demographics turned to Ipsos North America's national telephone survey system, Ipsos U.S. Express, to conduct an exclusive survey of 1,000 adults. It seems that as a whole, 31 percent of the Boomer population people born between 1946 and 1964, or who are between the ages of 40 and 58 has moved into a new line of work. That's well above the 21 percent of non-Boomers who have moved on to a new career. Admittedly, this latter figure includes some of the younger demographic cohorts who may have just started their working lives. Of the 31 percent of Boomers who have gone into a new career, 10 percent have launched those new occupations working in personal services. Personal service jobs range from chefs and hairstylists to tax preparers and financial planners. These are typically fairly self-governing posts, in line with Boomers' desire for independence. Plus the jobs avail of skills Boomers acquired in their previous careers as they now ramp up their own practice or business.
Younger Baby Boom respondents also indicated they're more likely to have already moved on to a new career. Some 31 percent of the 40- to 54-year-old population claims to currently be in a second or third career. As a matter of fact, the word career begins to take on new meaning as more and more people move in and out of numerous jobs throughout their lifetime. Older Boomers, ages 55 to 58, are actually less likely to have taken on a new job. Only 26 percent said they had started a new career, a figure that still eclipses the level for non-Boomers.
Boomers on the left coast are leading the new career movement, with almost 40 percent responding they've made the transition. Fortysomethings in the South and the Northeast were less likely to have changed jobs, as they both responded at rates close to 26 percent. The need for pre-retirees to find a new career doesn't seem to be all that different across income lines. Among all income levels, the response rate was about 1 in 3 Boomers claiming to have started a new career.
The next 10 years will be a trying time for the U.S. economy, as, demographically, it will be extremely top-heavy in terms of age. Baby Boomers have long heard rumors that their contributions to the Social Security system may evaporate before they get to the age to enjoy them. In response, a third of Boomers appear to be headed toward appending an extra term of work rather than opting for early retirement, a trend that might calm some of Greenspan's worst fears.