Meanwhile, fewer employers felt a need to tempt workers with the promise of a pension. And the Pepsi Generation that never tasted the bitterness of the Great Depression did relatively little to save for the rainy days of retirement.
In the still go-go days of 2007, the Center for Retirement Research at Boston College calculated that 44 percent of Americans nearing retirement were at risk of falling significantly short of their current lifestyles if they tried retiring at age 65.
Then in 2008, ordinary Americans began hearing about mortgage derivatives and other financial gymnastics. Suddenly, their home equity morphed into mortgage debt, their boss stopped pension contributions and 401(k) matches, or maybe their services weren’t even needed anymore.
In an eye blink, a generation’s retirement prospects turned from sketchy to crummy. By 2010, the number at risk of being unable to retire at age 65 had jerked up to 53 percent.
“The boomers are going into retirement in terrible shape,” said David Cay Johnston, author of “The Fine Print: How Big Companies use ‘Plain English’ to Rob You Blind.”
He’s studied pensions and America’s retirement systems for decades and concluded the Great Recession not only buckled boomers’ knees, it widened the chasm between the country’s haves and have-nots.
The laid-off and desperate found themselves forced to dip into stock-based savings when their values were particularly low. They were forced to cash out at the worst possible time. Those buying up those bargains — the wealthy — were the only people who had cash to spare. And it’s the rich who have profited from the subsequent rebound.
Meanwhile, a transforming economy of mergers and new-found efficiencies meant more workers got tossed to the side. That can prove daunting enough at any point in a career, but it’s especially tough for older workers.
“At this point in your life, you’re beyond the mountain climbing, beyond the time to make a name for yourself,” said Janice Lambert of Overland Park, Kan.
She’s 59 and laid off. Her employer merged with another company, was sold again and sold a third time — at which point it no longer had room for her.
She talks about feeling like a puppet, with distant financial forces tugging the strings that toss her future this way and that. To her, it feels like the puppet masters responsible for the 2008 financial crisis only got richer.
“It wasn’t supposed to be this way,” she said.
If she finds a decent job, she’ll likely stay in the workforce untold extra years to make up for lost time.
Baby boomers — a diverse demographic of nearly 80 million born between roughly 1946 and 1962 — peer into a time after work and see, well, more work. That’s assuming the workplace has room for folks who once thought of technology as a slide rule (look it up, kids).
The Bureau of Labor Statistics predicts that between 2008 and 2018, the number of middle-aged folks in the American workforce will jump by 33 percent. The number of workers 65 and older is expected to grow by almost 80 percent.
Making it all sting a little more is that, as a generation, they’ve not been a particularly frugal bunch.
Relative to their salaries and their lives filled with SUVs, 200-channel TV, beach vacations, boats and Botox, they’ve saved very little. On average, baby boomers waited until they reached age 35 before they even started setting aside money for retirement. By one estimate, even if they transform all their savings into annuities and max out reverse home mortgages, half the generation will see a marked drop in standard of living during retirement.