Great Recession pummeled baby boomers

By By Scott Canon And Steve Kraske

The Kansas City Star (MCT)

Published: Monday, Oct. 7 2013 12:00 a.m. MDT

Nancy Seagraves, 61, works at her computer at an AARP Foundation office in Columbus, Ohio through a program that provides financial support and subsidized training for some low-income, older workers while they look for full-time jobs on Tuesday, March 13, 2012.

Kantele Franko, Associated Press

Enlarge photo»

From the age of 23, when she was the first female steelworker at Butler Manufacturing, Diana Arends labored to carve out a solid middle-class existence.

Elbow grease and grit moved her steadily up a union hierarchy until, as a tool-and-die maker at age 59, she sat atop the union pay scale at Ball Corp.’s beverage-can plant in Kansas City, Mo.

Then came the crash of ’08, the closing of the plant and the start of hard times that look to define the remaining decades of her life — and tens of millions of baby boomers like her.

She’s worked just one year of the five since trouble gut-punched a generation just as a decent retirement seemed within reach. Her 401(k), the tax-sheltered account she’d been stocking all those years, was suddenly cut in half by the stock market dive, and it hasn’t rebounded to where it should. By age 62, she was forced to tap into Social Security early. That meant that forevermore, her monthly check would be $600 lighter.

Now 64, she still looks for work that puts her skills to use and strikes out, concluding that bosses have little interest in a leftover from a manufacturing age. She lives with her daughter and granddaughter in a Lee’s Summit, Mo., home that no longer has cable TV or a landline phone, that chills in the winter and toasts in August.

“I expected to be able to retire, take a camping trip now and then,” Arends said. “I didn’t expect to still be job-hunting to supplement my income.”

A generation once warned not to trust anyone over 30, and that now has kids with kids, wonders if it can believe in its own old age. An implied bargain that promised security after decades in the workaday world looks, if not busted, mighty rickety.

Look now, five years after the fall, and the landscape looks uneasy and unfamiliar.

“There’s a whole new world out there,” said Ralph Monaco, a Kansas City baby boomer.

Too many nest eggs got dashed in the 2008 cratering of stocks and home equity. Sure, things have bounced back … slowly. But half a decade of what should have marked prime, late-career earning years — from both investments and wages — all but evaporated.

Baby boomers were more likely to hang onto their jobs through the Great Recession than younger workers. Still, for those older workers who got laid off, the pink slips were especially devastating — forcing early and painful dips into retirement funds.

The still-employed also got whacked. Many saw company contributions to pensions, or matches to retirement accounts, evaporate. Wages stagnated or shrunk — at just the time in their careers that folks might expect to finally make top dollar.

And the lousy job market for young workers meant Junior’s inability to rise above barista extended his reliance on Mom and Dad deeper into his 20s — and their dotage.

“If you look at people 46 to 64, it used to be that that was the prime of your life, not only in terms of contentment and satisfaction, but also in income,” said Teresa Ghilarducci, director of the Schwartz Center for Economic Policy Analysis at the New School for Social Research.

But not this generation.

“The boomers,” she said, “will be the first generation to do worse in their old age than their parents or grandparents.”

Even before the crash, signs crept up that retirement years might not be so golden, or even reachable. Pensions increasingly lacked the full funding needed to guarantee the promised monthly checks. Although the federal government promises to backstop many of those pension funds, you didn’t need to be Chicken Little to imagine more collapsing accounts than Uncle Sam could field.