The Retirement of the Future

Boomers redefine retirement on their own terms: where to live, whether to work, and how to enjoy life.

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Not content to exit the workforce because they've hit some predetermined magic age, those of the baby boom generation—the first of whom turn 65 next year—are expected to transform their later years, much as they altered every life phase they have passed through since making their entrance in 1946.

If pundits have it right, Herb Johnson may well be the poster child for the retirement of the future. Johnson blazed a 30-year trail in supply chain management through such major companies as Polaroid Corp. and CVS Caremark Corp., capped off by a stint consulting to Fortune 100 firms. Rather than retiring five years ago, Johnson leaped into an entirely new role as president and CEO of the San Diego Rescue Mission, a faith-based recovery and rehabilitation program for the homeless. Now 66, he works more hours than ever.

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He is thrilled with his career turn and has no thoughts of stepping down. "It's nice to hit profit goals and make a company successful, but it's much more rewarding to watch people at the bottom of their game transform their lives right in front of you," Johnson says. His corporate experience helps him to manage the 90-employee, $14.5 million operation and to dream up initiatives like his bold, all-night fundraising event, Sleepless America, which he is bringing to missions across the country.

"This is a generation used to being in center stage. The idea of stepping to the sidelines is not going to play with many boomers," says Ken Dychtwald, president of the consulting firm Age Wave. Experts expect many to work as long as they are physically able and to transition when possible into jobs that offer high personal satisfaction. The implications of this coming trend are enormous, thanks to the generation's sheer size: By 2030, the number of adults 65 or older will skyrocket to 72 million, from just over 40 million this year.

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Steve Slon, who chronicled the boomers as the editor of AARP The Magazine, takes it as a given that they can reinvent their lives at every turn. "This generation has long had an arrogance—and I use that word in a positive way—in believing a career path should be as flexible and resilient as they want it to be." Slon shares this belief. At 58, after leaving the magazine, he considered opening a bicycle shop before deciding to start a nonprofit healthy cooking magazine for children. This summer he worked remotely from a rented beach house.

More than money. Part of the impetus behind the expected new path is, of course, financial. With private employer retirement plans having moved toward 401(k)s, boomers are less likely than the previous generation to have pensions financing their post-work years. Moreover, Social Security will likely undergo significant changes; whereas in 2000 nearly five workers supported each retiree, by 2030 there will be fewer than three. "People in their forties can't rely on Social Security to be there in the same way," says Mary Claire Allvine, a financial planner who works out of Chicago and Atlanta. Allvine expects benefits to decrease, the retirement age to rise (it's already been bumped to 67 for the youngest boomers), or the system to morph from a broad entitlement program into a more limited safety net.

Another key factor, however, is that boomers are finding the current retirement landscape wanting. The notion of taking that time and withdrawing to a permanent vacation dates back only to the 1960s, Dychtwald says. Before that, most people were not expected to live many years after they ceased working, if they stopped at all. "There's a dawning realization among boomers that a life of pure leisure, with no challenge or stimulation, is both unaffordable and boring, especially since—with increasing life spans—this phase might last for 30 years or more," Dychtwald notes.

Boomers are also the generation that announced early their intention to change the world. If they got sidetracked for, oh, about 40 years, as they raised their children and earned their paychecks, many still harbor the dream.