The first of 78 million baby boomers born in the wake of the Second World War will turn 65 in 2011. Some have long since retired, while others plan to hold onto their jobs for the foreseeable future. Many unemployed baby boomers are also looking for work to supplement poorly funded retirement accounts or to continue to contribute to society in a meaningful way.
Robert Baxter will turn 65 in August 2011, but is reluctant to leave a job he loves. "I've been lucky enough to work my way up in business to the point where I am running the show and that is quite rewarding, so I am in no hurry to retire," says Baxter, CEO of Dryden Mutual Insurance Company in Dryden, N.Y. He might consider retiring at some point between the ages of 68 and 70. "My generation is having second thoughts about taking any sort of early retirement," he says. "When my parents retired, they had a defined benefit pension and Social Security and they actually had over 100 percent replacement of their income. That's not going to happen to my generation."
But holding on to a job in your 60s or finding a new one can be difficult. "Workforce participation among older workers is higher than it has ever been and so is unemployment," says Ted Fishman, author of Shock of Gray, a book about the world's aging population. Once unemployed, older workers generally remain out of work longer than their younger counterparts. The average duration of unemployment for those age 55 and older in November 2010 was 45 weeks, 12 weeks longer than it takes the typical younger person to find a job. When Marty Colletti of Austin, Texas, a former account manager for Dell, was laid off in March 2009, it took her nearly two years to find a new job at a comparable level. Colletti, who will turn 65 in May, began a new job at a smaller company as a search engine optimization consultant in December 2010. "I tend to attribute my age to it taking so long to get a job," she says.
Medicare eligibility begins. The first baby boomers become eligible for Medicare benefits in 2011. Seniors can sign up beginning three months before the month they turn 65. Coverage typically begins on the first day of your birth month. If your birthday is on the first day of the month, your coverage will start the first day of the prior month. Individuals who wait until their birth month or later to turn in the paperwork may experience coverage delays. Baby boomers who will turn 65 next year should sign up right away to avoid a 10 percent Part B premium increase for each 12-month period they could have had Part B, but didn't sign up for it. Those who delay Medicare enrollment because they are still working and covered by a group health insurance plan must sign up within eight months after their coverage ends to avoid the penalty.
Many baby boomers are looking forward to joining Medicare this year. More than 6,000 Medicare beneficiaries with the birth date Jan. 1, 1946, have already pre-enrolled in Medicare, so that their coverage will go into effect on Jan. 1, 2011. "I am looking forward to having Medicare," says Connie Siskowski, 64, president of the nonprofit American Association of Caregiving Youth in Boca Raton, Fla. "Our nonprofit is small. We don't have group health insurance." Siskowski is delaying cataract surgery until she qualifies for Medicare, which better covers the procedure and any possible complications than her current private health insurance plan, she says.
Social Security choices. The oldest baby boomers have not yet reached the age when they will qualify for the full amount of Social Security benefits they are entitled to. For 1946-born boomers, that's age 66. Baby boomers who have already signed up for Social Security or plan to this year will receive reduced payouts for the rest of their lives. Doug Stanard of Columbia, S.C., former CEO of bowling alley chain AMF Bowling, retired in 1998 and claimed Social Security benefits as early as possible at age 62. "I started drawing 75 percent of what you would normally get," says Stanard. "You get lower benefits in your later years, but you get four years of benefits early." He also plans to sign up for Medicare this year.
Other baby boomers plan to delay their Social Security start date as long as possible to lock in higher payments later on in retirement. Colletti doesn't intend to collect her Social Security benefits until age 70. "Waiting until then is another couple hundred dollars a month," she says. Social Security payouts increase for each year you delay your start date up until age 70, after which there is no additional incentive to delay claiming.
Some baby boomers want to continue working, but have more control over their schedule and the projects they select. "Having Medicare insurance, taking Social Security, and having some other sources of income gives them greater economic freedom to take work that doesn't pay as well as it needed to previously," says Marc Freedman, founder and CEO of Civic Ventures and author of the upcoming book, The Big Shift: Navigating the New Stage between Midlife and Old Age. "That support gives people greater freedom to have a range of options and flexibility in the kind of work that they do."
Many individuals approaching retirement are also interested in giving back to the community that supported them throughout their life. "I've worked toward the goal of what I do for a living all my life and it is all coming together and I don't want to retire," says Andrew Seybold of Santa Barbara, Calif., who turns 65 in January. Seybold runs his own mobile wireless industry consulting business, but is beginning to scale back his paid projects and now donates about 50 percent of his working hours to gratis public safety communications projects. "I travel a lot, so it's not like I am going to retire and go see the world. I have already seen the world or a lot of it," says Seybold. "I don't feel 65. It's not a milestone for me. I feel like I am in my 40s."