Jim Whiddon on UnRetirement

“What fuels widespread fears at this moment isn’t aging. It’s retirement….Never before have so many people had so much experience and the time and the capacity to do something significant with it.”

So states Chris Farrell in his thought-provoking new book, Unretirement. He goes on, writing that “the last third of life is being both reimagined and reinvented into ‘unretirement.’ If the popular images of retirement are the golf course and the RV, the defining institutions of unretirement are the workplace and the entrepreneurial start-up.”

If Farrell is right, this could be a game-changer for many retirees, and our nation, in two key areas. First of all – perhaps not intuitively – it means that the seeds for a more vibrant economy are within our grasp as older workers come back into, or remain in, the workforce longer. Secondly, it could mean a substantial increase in our national collective intelligence because knowledge earned over multi-decade careers will stick around the workplace longer, helping train the next generation of employees. This could have significant implications regarding how people save for retirement, in the near-term and in the long-term, and both before and after beginning to wind-down (or in some cases wind-up) their careers.

Farrell believes that seniors can and will recharge the nation’s entrepreneurial energy. He makes a compelling case that the economic payoff of tapping into the abilities and wisdom of people in their 60s and 70s is enormous. He argues that the economy will expand, household finances will improve and concern over an impoverished retirement will fade away as living standards climb and the feared fiscal strain from entitlement spending will ease. “Shared interests between the generations in a job centric economy will take center stage,” he concludes.

Consider these thoughts:

  • “Older workers are to the first half of the twenty-first century what women were to the last half of the twentieth century” in terms of economic impact.
  • “If median earners delay retirement from age sixty-two to age seventy, they can reduce their required savings rate by some two-thirds.”
  • “Older people are starting businesses more than any other age group – from 14.3 percent in 1996 to almost a quarter in 2013.”

Farrell maintains that older workers have competitive advantages, such as greater experience, developed networks of business contacts and established credibility. Technology has lowered start-up costs. Older entrepreneurs tend to have greater financial resources to draw on, and self-employment offers greater flexibility and control.

The field of opportunities seems ripe for seniors because the generation that follows the baby boomers (Generation X) is only about half its size. And while it may appear counterintuitive to some, the outcome of collectively longer work lives, Farrell argues, is a wealthier United States.

A widely accepted fallacy is that older workers staying on the job longer means fewer employment opportunities available for younger workers. Economist Art Rolnick is quoted on this subject: “They aren’t taking jobs from younger workers. They may be creating jobs for them.” In other words, in the same way that the economy is not a fixed pie or zero-sum game for our society at large, neither is the job market.

Additionally, Farrell maintains that we can “bury the conventional wisdom that younger workers and older workers are vastly different in their ability to create and innovate. Good employers typically value older workers for their experience, the knowledge they’ve built up over the years, and their proven ability to solve problems. Stumped colleagues will turn to someone with gray hair for advice.”

After all, Sophocles completed his Oedipus trilogy at age 90. Titian painted the magnificent Christ of Pity at 99. At 70, Ben Franklin began the task of winning French allegiance in our struggle for independence. Longfellow wrote a poem for the 50th anniversary of the class of 1825 at Bowdoin College. Cato learned Greek at 80, Chaucer penned The Canterbury Tales at 60, and Goethe finished Faust, also at 80.

Innovators gradually build their skills over a lifetime – calling on those experiences for inspiration and know-how. Baby boomer employees, for example, are known for lower absenteeism and greater interpersonal (“soft”) skills.

One key idea I gleaned from Unretirement came from understanding more about employment history in the United States. Farrell writes:

“The elderly in an agrarian society were valued members of the community, treated with respect. Longevity only added to their moral stature and burnished a reputation for hard-earned wisdom. In fact, Americans considered it foolish for the elderly to quit their jobs merely on account of age.

Employers in the emerging industrial society considered the elderly a spent force. Their accumulated knowledge and experience – much appreciated in agrarian times – were worthless in Smokestack America.

The efficiency gurus and their clients associated speed and efficiency with youth. A young worker would be better able to keep up with the demanding pace of the assembly line. Medical research reinforced the belief that by middle age creativity was essentially exhausted and, by old age, people were basically worthless, at least from an economic and business point of view.”

After reading this, a thought occurred to me: Some, if not many, employers in America view their workers as though we are still in the middle of the industrial age, not the Information Age. This hold-over attitude is a huge mistake. Why would I say that? Farrell continues:

“In 1930, out of 224 American factories investigated, 71, or almost a third, had fixed maximum hiring age limits; in 4 plants the limit was under 40; in 41 it was under 46. In the other 153 plants there were no fixed limits, but in practice few were hired if they were over 50 years of age. Little wonder with layoffs commonplace in so many businesses that the fear of impoverishment in old age ran deep.”

During the Industrial Revolution, a worker’s strong back was the key to business success – so younger workers were obviously needed. But in the Information Age, a worker’s brain is the key – and more mature and more experienced employees have the edge there. And the facts of the market are bearing this out as workers 55 and older are projected to account for 25 percent of the labor force in 2020, up from 12 percent in 1990. And 94 percent of surveyed employers said it was important to keep older workers on the job longer because of their talent and skills.

All of this leads to one inescapable conclusion. Senior entrepreneurship and employment is now a movement– a revolution in the making, if you will. As Farrell explains, “Management will realize that older workers are productive, creative employees as negative stereotypes fall by the wayside. The employer conversation about older workers will increasingly shift toward redesigning corporate benefits to help keep talent on the payroll longer.”

The ageing boomers are looking not just for an income, but also a community (many get bored quickly with traditional retirement) and, most importantly, a mission. That mission is to transfer wisdom to the next generation, whether it’s for 40, 30 or 20 hours per week.

“The grassroots unretirement movement is a major counterforce against the headwinds of aging, fiscal pressures, and educational letdowns…. The drive to lead productive lives well into the latter stages of life can generate economic dynamism and social creativity and, at the same time, reduce the nation’s fiscal burdens.”

It doesn’t matter if you are looking for an employment or an entrepreneurial opportunity. Or if you want to get involved again just to pass along your wisdom voluntarily. Either way boomers – it’s time to get to work!

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The opinions expressed by featured authors are their own and may not accurately reflect those of the BAM ALLIANCE. This article is for general information only and is not intended to serve as specific financial, accounting or tax advice.

© 2014, The BAM ALLIANCE

Dan Solin

Dan Solin is a New York Times bestselling author and has published several books on investing, including his “Smartest” series. In addition, he writes financial blogs for The Huffington Post and Advisor Perspectives. Dan is a graduate of Johns Hopkins University and the University of Pennsylvania Law School.

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