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In recent years, budget battles in Washington have featured dire warnings about an older American workforce. We’ve heard that a wave of aging baby boomers would bankrupt Social Security and Medicare, and threaten American economic prosperity. But author Chris Farrell argues these doomsayers have it wrong: advances in medical care mean people are living longer and healthier lives and want to continue working instead of retiring. And many of these older workers are starting new businesses that are boosting economic growth. The ‘unretirement’ trend and what it means for the American workplace and society.
- Chris Farrell Senior economics contributor for American Public Media's "Marketplace" and contributing economics editor for Bloomberg Business Week
Read A Featured Excerpt
Excerpted from “Unretirement” by Chris Farrell. Copyright © 2014 by Chris Farrell. All rights reserved. Published by Bloomsbury Press, New York, a trademark of Bloomsbury Publishing Plc.
MS. DIANE REHMThanks for joining us. I'm Diane Rehm. More and more Americans are choosing to work well past traditional retirement age. These older workers are starting new businesses and beginning new careers at higher rates than ever before. In a new book, author Chris Farrell argues the trend toward working longer is good for the American economy and society.
MS. DIANE REHMHis book is titled "Unretirement: How Baby Boomers Are Changing The Way We Think About Work, Community And The Good Life." He joins me in the studio. I'll look forward to hearing your comments. Tell us about your own experiences. Call us on 800-433-8850. Send us an email to email@example.com. Follow us on Facebook or Twitter. Hello, Chris. It's good to have you here.
MR. CHRIS FARRELLWell, thank you for having me.
REHMMy pleasure. You write in this new book that all the doom and gloom about an aging population, you believe, is overstated. How come?
FARRELLI think it's way overstated. And you know the story. Oh, America is getting older and, you know, these old people are not very creative and they're not very energetic and they're hanging onto to these companies and so we're not going to grow very fast because of all these old people. And then, because they're just not very creative and doing much for the economy, then the entitlement spending like Social Security is going to get more and more expensive.
FARRELLAnd the thing about it is, we have a highly educated population. We have a very engaged population that wants to do anything but retire. Now, not everybody, but many of them. And the thing is that they continue to work, part-time, semi-retirement, bridge jobs, contract jobs, start their own company. You know what they continue to do is pay taxes and they're still engaged.
FARRELLAnd then, they live off their savings for a longer period of time and also a lot of the doom and gloom that surrounds retirement savings, it starts to dissipate. And all the negative comments that we hear about we can't afford to grow old, you know, we can afford to grow old. If people just work a few more years, the people who can, 'cause there is a group of people who can't, but the people who can and stay engaged and are earning an income, the impact on our economy and the impact on us as individuals is enormous.
REHMThe thing I worry about, you talked about their retirement savings. Lots of people are not putting money into retirement savings. Lots of people who perhaps have passed the retirement age cannot find a job, cannot go into the marketplace even with skills they may think they have. Those skills may no longer be needed.
FARRELLSo age discrimination is real. It is out there.
FARRELLIt is something that people have to deal with and that's why a lot of people end up becoming schedule C entrepreneurs. They, you know, it used to be hang out your shingle. Now, I guess, you hang out your website. But that's one way of dealing with age discrimination because you think about if you're starting your own business or you're doing some sort of contract work, you're drawing on people that you knew during your work life.
FARRELLThat's who you're sort of turning to to get some work. And they're not worried about age discrimination, whereas when you're someone from the outside and people don't know you and you're applying there, you're definitely dealing with it. The other thing is, this is a period of transition. This is a period of experimentation. There's a lot of, is it part-time work? Is it contract work? What is this unretirement? What are these encore careers?
FARRELLWhat opportunities are available to me? And the nature of experimentation is I think a lot of these experiments are gonna work out and are gonna provide for the younger generation a different road map than you and I grew up with. But at the same time, the nature of experimentation means that some people are gonna have a really rough time of it and that it's going to be difficult and it's going to be hard.
FARRELLNevertheless, people will figure, particularly as the economy gets stronger and this labor market gets stronger, you know, people are gonna figure out how to stay engaged and they don't want to do volunteer activities. They want to do something that earns them a little bit of money.
REHMWhat do you say to the likes of Pete Peterson who really does believe that Social Security may come to an end? It's certainly going to taper off in terms of the monies available.
FARRELLSo Pete Peter -- you're absolutely right. So the man is a billionaire, but what I would say is you are completely and utterly wrong, that this is the wrong way to be looking at it. What we need to stop talking about is what we can't afford and what we need to be talking about more is about incentives. How do we -- Eugene Steuerle, who is here at the Urban Institute, an economist, he made a very important comment.
FARRELLHe said, you know, this is going to happen, people working longer. The question is, does it happen quickly or does it happen slowly? And so what my objection to the Peter Petersons of the world is, stop saying we can't afford it. Stop that kind of campaign that we can't afford all these elderly people and start talking about incentives that make it easier for people to work longer, that make it easier for people to adopt part-time jobs, that make it easier for companies to keep somebody on the payroll who has certain amount of knowledge and they like to keep them there.
FARRELLYou know, we should be talking about incentives to bring people into the job market and create wealth. It's good for companies. It's good for the individual, good for the economy.
REHMOn the other hand, you have, for example, most law firms have an automatic cutoff date, automatic retirement, be it 72, be it 70, be it 75, saying you're out of here, period.
FARRELLYes, that's right. And, you know, but what you've noticed is that these lawyers who have been, you know, pushed out of their firm, you know, they don't retire in the traditional sense of the word or, at least, that image that we have that they move down to Sun City, Arizona, or they move to Florida. Turns out, you know what they end up doing is they're teaching as adjunct professors at various law schools, they're doing some consulting on the side.
FARRELLThey pick up a little bit of work here. They pick up a little work there because they're really smart people and they're really engaged. And, you know, if you're a lawyer at age 65 and you've done it that long, you know what the fact of the matter is? You like being a lawyer. You have a real skill.
REHMChris Farrell is senior economic contributor at Marketplace, which, of course, we air here on WAMU. He's economics commentator for Minnesota Public Radio and also a contributing editor for Bloomberg Business Week. If you'd like to join us, give us a call, 800-433-8850. Send us your email to firstname.lastname@example.org. And I look forward to hearing from you. Seems to me that people who retire, unless they've got lots of plans, are less happy than those who stay in the workplace.
FARRELLI think you're right. And one of the stunning statistics that came out, it's by an economist -- two economists at the Rand Corporation. And yeah, you're always dealing with databases, but looking at one of the major government databases, and what they found is that people who had full-time employment who retired, about a little over 25 percent, a little over a quarter when back to work within two years. And so then, the question was, well, did they have to, right?
FARRELLThis financial pressure. And they said, going through the data and going through the surveys, the answer to that's no. It's that they wanted to stay engaged. Because, you know, we talk about work in terms of income and wages and the money that it brings in, right? But work is a social institution. I mean, you say hi to people. People care whether you show up. There's someone who notices whether you shop up. And if you don't show up, someone's probably calling you saying, where are you?
FARRELLAnd we celebrate our birthdays, we get depressed about divorces, I mean, this is a social environment and you feel useful. And so one of the things that I love that's part of this conversation is that if you look at the 60-somethings and you look at the 20-somethings, they share a world view. They're idealistic. Think about 20-somethings when they graduate from college. They want a job. They want to earn an income. They want to be independent, but they also want to do something that they feel proud about, something that is good, good for society. 60-somethings feel the same.
REHMSo if the 60-somethings find a way to stay in their jobs, what happens to the 20-somethings? How can they move up the ladder?
FARRELLOkay. So I think there's two things, a couple ways to answer that, but one is a lot of times with the unretirement, the encore careers, people don't want to stay in their current job.
REHMIn their same job.
FARRELLThey really don't, particularly if you're a, you know, had long time employment. You know, it's time to move on and do something else. And, you know, you've been reporting to this boss long enough. You know, you want to kind of have a different group of colleagues so typically what you see the discussion is about is taking your existing skills and going to a different part of the economy, a different sector of the economy 'cause it's kind of energizing, you know.
FARRELLIt gets the creative juices going, but it's also reassuring because you're working with skills that you developed over your lifetime. And I think that's the most important part of it. The other thing is one of the things, you know, economists do aren't always right, but one of the things that they do agree on is called a lump of labor fallacy, which is that we believe there's only a certain number of jobs.
FARRELLSo if the elderly are holding on, older workers are holding onto their jobs more, there's less opportunity for younger workers. And over the course of a business cycle, that's just simply not true. If there are jobs for the elderly, older worker, there's jobs for the younger worker.
REHMI think, in fact, however, you are talking about a certain sector of the economy. I was reading in the New York Times the other day about a group in Appalachia whose coal mines have been closed down.
REHMAnd these folks at age 50 have nowhere to go.
FARRELLThat's right. Right. And so, you know, part of this is -- and part of my argument is that there is a group of people who have never worked in an environment where they've had retirement savings plans at work. They've never had a healthcare plan at work. And the fact of the matter is, at 60 years old, they're mentally and physically burned out. That's absolutely true, but that is not a majority of people and the wealth that they can create will support them.
FARRELLChris Farrell, his new book is titled "Unretirement." Stay with us.
REHMAnd I knew you would be coming through with many calls and emails for Chris Farrell. He is a senior economics contributor at Marketplace. He's written a new book titled, "Unretirement: How Baby Boomers Are Changing the Way We Think About Work, Community and the Good Life." Catherine writes from Cincinnati, OH, "My husband is a college grad, recently retired from a decent-paying middle management job."
REHM"He needs to work to supplement our Social Security income. The only jobs he can find pay 7.50 to $9, barely worth the gas to get there. You would think companies would be more generous since he has a wealth of experience and knowledge and doesn't need benefits. So please ask, what can be done to change this situation, make decent paying jobs more available for retirees?"
FARRELLSo, it's always easy to make comments -- and this is a tough situation. If you're living through it, it's tough. So a couple of comments would be, he's a middle manager, he has these skills. So over the course of his career, has he been volunteering in certain organizations? Are there certain things, nonprofits, that he has a relationship with and they know who he is? Well, and now, I'm just making it up. Let's say his skill was in marketing.
FARRELLWell, it turns out a lot of nonprofits, they need people in marketing. They're not going to necessarily pay very much, but it's a good job for something that you believe in, something -- a cause that you've been associated with. And if you've been volunteering with this kinds of organizations, then they know who you are and they may want to tap into your skills. The other thing is, in most communities now, there are various organizations -- and you can go to encore.org.
FARRELLThat's the website -- they're based in San Francisco and they have just a wealth of information about organizations in communities, like-minded people. In the Twin Cities, it's SHiFT. That's the organization where people are looking for second careers, third careers. They get together. They share knowledge. They share information. Again, it may not be a big-paying job, but people are searching for a job that has money and meaning.
REHMHere's another perspective from Gloria in Michigan. She says, "As I prepare for my 50th high school reunion, I observe many of my classmates are still working. Those who are retired ask me how long I'm going to work. Who knows? As long as I enjoy working, my employer appreciates the work I do, I see no reason to think of retiring."
FARRELLRight. And in her circumstances, it sounds like there's no pressure on her to retire. They're glad that she's doing her work. And if she's enjoying it, I think that's wonderful. And the thing is, you know, if you multiply out her story and there is a legitimate concern about retirement savings and people not having enough retirement savings. But the thing is, if you're continuing to work, you continue to earn some sort of income, you don't have to tap into those retirement savings.
FARRELLThey can continue to grow. And you can also delay taking Social Security, which is really a smart thing to do for most people. Delay it as long as you can up to age 70 rather than taking it earlier.
FARRELLBecause once you hit your full retirement age, so for most people right now it's age 66, for every year that you delay after age 66 to age 70, it's the equivalent of an 8 percent inflation adjusted return on your money. Now, you can't do that in the market today. So the longer that you delay that, the better your benefit and it really does pay off for most people.
REHMYou filled your book with lots of examples, you know, people who've unretired in various ways. You talk about Jacqueline Hubbard. At 54, she worked at 30 Dan River mills for 30 years. What happened?
FARRELLSo she worked at Dan Rivers Mill and she was in the clerical department. So, you know, processing orders. And, you know, Dan River Mills is part of the long-term decline of American textile industry. And it was taken over by an Indian company and just pretty much shut down in 2008. She's out of a job. She's 54 years old, husband runs a garage. She needs to be employed. She needs to be engaged. And she'd always had this kind.
FARRELLAnd she likes children and so, she went to community college and she said it was really hard. She's 54 years old. Really hard. She was the oldest person in this class. But she got her degree and she's teaching at a Head Start program, and she's earning the same amount of money that she was earning when she was at Dan River.
FARRELLSo but now what she's doing is she now has more confidence. She's actually going back to school -- going to classes because she wants to become a full teacher, not just an assistant teacher. And this is sort of -- and she's very engaged and really enjoying it. And, you know, it wasn't easy. And none of this is easy. And if you have a lot of resources, it's usually easier because you can fund your transition.
FARRELLWhat she got was some help from the federal government because the company was taken over by a foreign firm and she lost her job. And there is a wonderful nonprofit program that was going on that's run out of money, but that also helped.
REHMAnd then you write about Vita Needle in Needham, MA.
REHMTell us about her.
FARRELLWell, I was watching it and I don't know about you. I was looking on TV and there was this wonderful story by Paul Solman of PBS. And then I saw and went and got the transcript. And, you know, the average age of the workers there is about 80 years old. You know, they're in their 60s, 70s and 80s. It's a law -- it's a family firm, been around for a long period of time. These are highly productive workers.
FARRELLAnd what's really interesting is one of them that I quote from, he'd been an engineer and then he retired, kind of bored, so he's been doing this for the past 11 years and having an absolute blast.
REHMHaving an absolute blast.
FARRELLYes. And this is -- I think this is, you know, of course there are people who are not having an absolute blast, right? And there are people who are doing jobs they really don't want to be doing. And there are people, as one of the earlier people emailed in, you know, they're being rejected. And that's -- it is really tough. So I don't want to minimize. And one of the things that my book is arguing is that people need more help to get jobs.
FARRELLThis is a little bit too much a DIY world, you know, you kind of put it together yourself, your own little portfolio. You know, you get -- get your gumption out there and, you know, figure this out. Well, people need support. They need help. We need companies to embrace this and realize this a lot more. And so, that's what I would like to see. But, again, these examples are multiplying.
REHMAnd what about government? What roles can government play?
FARRELLI think government can play a huge role. Of course, you know, when you say -- mentioned Social Security and opening up Social Security for some changes, I mean, that gets really extremely difficult. But there's an idea from John Shoven, economist at Stanford University. He says, so let's say after 40 years you're paid up into Social Security, completely paid up. And then at that point, you don't contribute anymore and your employer doesn't contribute anymore.
FARRELLSo that's a bump up in your pay and it's also you're less costly to your employer at that point. So these kinds of ideas are out there, ways to reward work, ways to make the older worker a little bit cheaper. And that's the kind of incentive that I'd be thinking about.
REHMAll right. We've got lots of callers. Let's open the phones. First to Dave in Cleveland, OH. You're on the air.
DAVEGood morning to you.
DAVEI think that -- my opinion is that it's ludicrous, spin job, feel-good rationalization. I don't buy into it at all that many people are working after retirement just because they want to, even though I am. And I am working after retirement. But I don't buy it at all.
REHMTell me how old you are, Dave.
REHMAnd when -- tell me when you retired and from what.
DAVEDecember from the railroad. They actually forced me out on disability, decided I wasn't helping enough to work anymore.
REHMAnd so, what are you able to do now?
DAVEI can do anything physically. I'm getting ready to cut the grass now. I mean, I can physically work. But the premise that people are working because it builds their character and they find it fulfilling, and I think that is the extreme minority as opposed to the people that are barely treading water.
REHMIs that how you see yourself, barely treading water?
DAVENo, I actually -- the income is not bad. I'm not complaining. I need to do something. I can't sit around and eat bonbons and water the flowers all the time. But, well, say, if you go to Wal-Mart, you see so many folks old -- old from my perspective, older than I am, I'm pretty sure -- who look like they're barely able to work. Nice folks, decent folks, but I'm pretty sure there's a whole bunch of them doing jobs that they're not all that excited about.
REHMI'm sure he's right, Chris.
FARRELLI think he's partially right. But I think what he said -- and I think this is a wonderful statement -- need to do something, don't want to sit and eat bonbons all the time. Well, that actually gets to the core of the issue for many people. And, yes, again, what is important about is there are people who really, you know, they've lived in a low income life and life has been hard. There is just no question about that.
FARRELLBut then again, there's a much larger group of people that if they do continue to work longer, it doesn't just mean that they're going to be better off or more engaged, but it means that we have the resources to really help out the people who are hurt. But it would also mention one other thing, and just as an aside, you know, you remember, you know, I'm sure you do, the Americans with Disabilities Act in 1990.
FARRELLAnd, you know, that was the end of the economy. That was going to destroy the economy. But one of the things about the American Disability Act, which by the way did not destroy the economy. But one of the things is that we learned is that we learned is that so many disabled people could work and wanted to work. And so, what I'm arguing for is make that possible, build on that insight.
REHMAll right, to Phyllis in Greensboro, NC. Hi, you're on the air.
PHYLLISHi, good morning. Thank you for taking the call.
PHYLLISI wanted to share my story, it seems appropriate. I retired at 65 after 40 years as an educator and took a new job as the director of a social service agency and retired when I was 80. I'm now 85 and each day I think to myself, why did I retire, I could still go to work. But I seem to think it was time for someone else to come in with some new ideas and go in another direction. But I have to say, every day I worked was a joy. And all those years I paid taxes, and in the end, I didn't take health benefits because I already was on Medicare at the time.
PHYLLISSo I didn't take their health benefits, but I still paid Social Security taxes, and every day was a pleasure. I recommend work as the best thing you can do.
REHMI fully agree with you, Phyllis.
FARRELLYes. And also just building -- I mean, I absolutely agree with you there. But, you know, one group of people who are truly embracing this unretirement notion are teachers. And -- because, you know, you think about it, teachers have been engaged. They're well educated. They've worked. And typically, they go off and do something else. But they have a genuine set of skills, just like she did, went over to, you know, a different sector of the economy. So teachers are in the vanguard of the unretirement movement.
REHMAnd you're listening to "The Diane Rehm Show." Let's go to David in Carmel, IN. Hi, you're on the air.
DAVIDGood morning, Diane.
DAVIDThis is a very interesting topic because you're describing my life. And I'm 57 years old and trying to find work in the insurance industry that I've been a part of for 28 years has been very difficult. I think once the -- they look out my resume to figure out how old I am and they know that they would -- can't pay me the same as a 223-year-old or 24-year-old. So the question I have is how do you work around these screening of the resume systems that a lot of the companies use today so that -- not that you wanna mask who you are, but you want to be at least have a chance to get an interview.
FARRELLYeah. And I think this is why you see so much movement into other sectors of the economy.
FARRELLSo you're taking a look at what are your skills. So you've been in the insurance industry, you're comfortable with numbers. You're also -- depending on what you did in the insurance industry, David, I'm guessing you're also comfortable with clients. You know, interaction there. So you have real barriers within his industry at this point. But facility with numbers, ability to work with clients, do little projection.
FARRELLSo, is there, you know, shifting to another sector of the economy where those skills are going to be valued and, you know, the fact is, they're not looking at you as a 57-year-old, but they're looking at you as, hey, he knows how to, boy, we haven't been able to do this forecasting and he knows how to do it.
REHMAll right, to Cindy in Tampa Bay, FL. Hi, you're on the air.
CINDYHi, Diane, thanks for taking my call.
CINDYExcuse me, I have a little laryngitis.
REHMOh, so do I. Don't worry about it.
FARRELLAnd I have allergies. So...
CINDYI'm 54 and I have been a bit surprised to find myself looking to a career at age 60. And my story is my husband and I chose and I wanted to stay home to raise my children. They're now 15 -- 15, 17, 21 and 24, we homeschooled 15 years.
CINDYAnd I still have my brain. In fact, it encouraged me to continue my education. I always wanted to be a substance abuse counselor. But when I chose to get married and stay home with my children, I put that on the shelf. And when I was 49, we have adopted children who have profound attachment issues and that's been quite an odyssey. Well, how I ended up sort of doing the reverse of a lot of education tracks is that when my children started getting better enough so I could lift my head up and look around at life at 49, our counselor told me about an online program she recommended.
CINDYI've been in online college since 2009. I finished -- I completed my bachelor's degree in psychology. And now, I'm in my master's program to be a counselor, a therapist. And my trajectory is 54, and I thought it would be a quicker trek, but I found out quickly, I could not handle more than two classes at a time.
CINDYBut, you know, demands of life. So I will finish my degree when I'm 57, then I have to sit for two years employed but not licensed either to be supervised.
CINDYSo I will be right at 60, and I just wanted to comment -- I'm so glad I caught this show. I had to drive an unexpected errand and I was glad to hear you and your guest. But -- and that previous caller Phyllis, she's my role model, because I'm grateful that the counseling profession, I believe, will appreciate my age maybe more than some others. It is a sit-down job, so it's not going to be terribly, terribly physical.
CINDYBut I've just been so pleased that I just sort of ended up -- because things took so long that I'll be entering the workforce when a lot of people retire. And I'm thrilled.
REHMGood for you. What a great story. And good luck to you, Cindy. I'm sure it'll work out well. Short break here. And when we come back, more of your calls, comments. Stay with us.
REHMAnd welcome back. Chris Farrell is here with me. He's got a brand-new book. It's titled "Unretirement: How Baby Boomers Are Changing The Way We Think About Work, Community and the Good Life." He tells many stories of those who have either reached retirement age, have retired, then have gone on to do other things, how they retain their productivity in our economy and indeed add to the economy by virtue of their work.
REHMHere's an email from Margaret who says, "My husband and I started a small business about 15 years ago. We have four employees besides ourselves. All of our employees, including myself, except my husband, are retired from other careers. We find them to be excellent employees, reliable, hard-working, pleasant. In return, we offer a workplace that's flexible, fun and stress-free. We highly recommend older workers."
FARRELLWell, that' wonderful. And one of the key words in there is flexible. 'Cause one of the things older workers are really looking for is a certain amount of flexibility. They don't want to be putting in, necessarily, the 40-hour work week, let alone the 50 or 60-hour work week.
FARRELLBut they want to be working so flexibility is an extremely important concept in this whole discussion.
REHMLet's go to Cincinnati. Hi there, Perry. You're on the air.
PERRYHi, Diane. Thanks for taking my call.
PERRYWe actually employ a lot of retire people part time. We give them the option to you stay on after they kind of announce that they want to retire. My question is, what happens when one of the employees begins to fail cognitively and not be able to perform their function like they used to? How does it open us up, you know, to keep them on other than our lawyer just saying keep documenting, keep documenting, keep documenting?
PERRYAnd then, finally, let them know, you're not performing what you used to and then there are some serious issues and delinquencies in your work. How can we approach that individual so it doesn't get to that point?
FARRELLRight. And I think this is part of, you know, this is why companies institute things like performance reviews, which we all kind of -- anyone who's gone through a performance review kind of rolls your eyes about, but it does provide a moment for having those kinds of conversation and yes, you do have to document things. It's extremely important so you don't open yourself up to any issues, but it also doesn't mean you can't have, just as you have with a young person about, you know, look, you're not really performing very well here, you know.
FARRELLHere's what we need to be seeing from you or else, you know, you might want to be thinking about another place that's better for you. You know, you kind of at the same time can be having a similar kind of conversation, but you do have to document it. In today's world, there's no question about that, that you do have to document it. It sounds like this is a, you know, really wants to do the right thing. And the other thing is, I guess I can't say with 100 percent, but most people kind of know that it's time to move on, that things aren't quite right.
FARRELLAnd you know what? People have other parts of their lives and if you are starting to be a little less mentally capable, you kind of want to focus on some of those things, too.
REHMLet's go to Frank in Baltimore, Maryland. You're on the air.
FRANKGood morning. Great show.
FRANKAnd actually your story probably is even relevant here.
FRANKI'm a clinical social worker and started out in life to be a social worker after flunking math and chemistry and all those good things and found out that I was pretty good at that and had a great career and would get pushed along. And before you know it, I'd be sitting behind the desk pushing paper and doing a whole lot of other things that had nothing to do with working with people. Well, finally, in my mid, late 50s, I figure out, you know, I'm not doing anything I want to do.
FRANKSo I technically retired from half a dozen different jobs 'cause I got too far up the ladder. The only way to deal with people and do what I wanted to do was to quit and go do it somewhere else. Well, as I got older and smarter about it, I discovered private practice and the accumulated knowledge and experience and, you know, again, jack of all trades, but not necessarily master of all of them, found that being in private practice and working around the edges of the system, I could set up and work from home and work with families and children, which I love to do.
FRANKI'm a registered grandfather even and so I could, you know, I had both personal experience and just years and years of professional experience working with people.
REHMIt sounds as though you have clearly found your way.
FARRELLAnd, you know, one of the things that's really underestimated in all this conversation is how creative people really are and there's this notion that you get to be 60 and all of a sudden, you don't know anything. You're not creative and you're just -- all you want to do is go play golf. And I mean, what he's done -- I mean, think about what he's done. He's looked at his career. He's looked at what he's done and he's figured out a way to be doing what he wants to do and still be engaged and people are enormously creative at that.
REHMBut you know, Chris, the other thing this whole idea suggests to me is that young people are going to have to start saving more and saving earlier so that when it does come to that point in their lives, the ability to make a choice is there.
FARRELLAnd that's where I think we also need to change the conversation about saving for retirement 'cause why do you save for retirement? The message is, you know, you don't want your standard of living to fall dramatically. If you don't save, you're gonna be -- just -- you'll go from the middle class to poverty and so that's why you save. Well, here's the other reason why you save. You save just for what you mentioned.
FARRELLYou want opportunities. When you're 60 years old, you're still engaged. You still want to be doing things just like you were 20 years old. And if you have savings, you can pick up that additional education you might need or you can decide I'm gonna go over here, earn less money and be happier.
REHMAll right. To Quincy, Illinois. Hi, Steve, you're on the air.
STEVEThank you for taking my call.
STEVEI love your show.
STEVEEverything we've been talking about, that you guys have been discussing, has been really positive. I retired in 2010 from -- I'm a union construction worker. I'm third generation and I have a college degree and I'm engaged. I have a good pension. I'm drawing Social Security. How about alcoholism? I haven't heard that mentioned yet. I find that a lot of people that retire early seem to want to drink more than before and I was (unintelligible) to or has Chris thought about that or have you thought about that? You get bored...
REHMSteve, has that been your own experience?
STEVEWell, I don't consider myself an alcoholic, but I do find that, you know, in the afternoon, I'm thinking, well, I'm gonna have a drink. And then, there's not enough, you know, it's really easy to find friends who would like to go have a drink. And I've heard this before, you know, not just on your show or by myself or other people. I think alcoholism might be a problem when you retire early.
FARRELLSo there's a couple of different answers to this. So as far as alcoholism or dealing with addictions, you know, that -- just because you're in your 60s doesn't mean those things fade by the wayside. It just doesn't. It's one thing to deal with. But one other thing, you know, short of alcoholism, one of the reasons why people like going back to work is what they find out is, you can only drink so many afternoons. You can hang out and tell the same stories to the same group of people only so many afternoons.
FARRELLAnd then, you bore yourself and you get worried about, you know what, I am sitting around here and drinking a little bit too much and I'm not doing enough. And so part of this, you know, what are the institutions? How do we connect to our society? How do we connect to other people? And one way, the major way in our society that we connect to other people and it has some sort of value and purpose is through our work.
FARRELLSo people may unretire. They may say, hey, I can have a drink at 3 o'clock in the afternoon, but you know what, the joy in that, it fades after awhile.
REHMPretty quickly. We've even heard Carl Kasell say sleeping late is not all that great.
FARRELLNo. And it is for about a week or two.
REHMYeah, right. What about healthcare? How do challenges in the way of public policy regards retirement, how does that work into healthcare?
FARRELLSo I think one of the things about the Affordable Care Act, Obamacare, is that it is going to make it much easier for older workers to continue to work because you're 58 years old. You're 60 years old. You don't qualify for Medicare and you have a job. Let's say you have a job. Well, you're nervous about losing your job 'cause you're gonna lose your healthcare. Well, all of a sudden, with the Affordable Care Act and the exchanges, you can move around and still have healthcare because when -- because healthcare is really important.
FARRELLYou need that health insurance. You have to have that health insurance. So I actually think that the Affordable Care Act, one of the really underappreciated benefits of it is that that is an incentive for an older workforce to continue working, not necessarily where they were. It opens up a much broader universe.
REHMDo you think that it would be useful to up the Social Security retirement age?
FARRELLI do not think that it'd be useful to move that up. What I would do is increase the incentives to work longer. So if you move it up -- and the reason why I'm wary about moving it up, is just -- the theme that's been underlying this, there are some people who just really can't continue to work and my fear is if you move it up, those people are gonna take too much of the brunt of increasing the age. So let's increase the incentives to work longer.
REHMAll right. And to Darryl in Lancaster, Pennsylvania, hi, you're on the air.
DARRYLHello, Diane. Great show. Thanks for taking my call.
DARRYLI'm really, you know, I know the show's about retirement, but when I tuned in, you were talking about the 50-somethings and I really wonder what your guest -- first of all, I wonder how old he is and I wonder what your guest thinks about those of us, well, I think we're as small a population as he might believe, that are 50-something and out of work and have kids with school loans who can find no work so there's kind of a double whammy, the 20 to 30 child that still needs your support and your help and being a 50-something and being out of work. I was wondering if he had any thoughts on that.
FARRELLYou bet. And there's no way of minimizing that. There's no way to say that, hey, that's an easy situation, you know, be happy. You have children. It's wonderful, no. I mean, look, there are, as I say, there are people who are really hurting in this economy and the labor market is strengthening so hopefully those young people with the college degrees are gonna be getting more jobs and that's the evidence that we have.
REHMI hope so.
FARRELLAnd hopefully, that -- the 50-somethings that lost their jobs are going -- also the labor market is going to get better for them. So yes, and so -- but I don't think that this changes what is going on overall in terms of embracing unretirement, in terms of embracing encore careers. As a society, this is the direction we need to be going.
REHMAnd you're listening to "The Diane Rehm Show." Let's go to Orlando, Florida. Hi, Mark.
MARKHi, how are you doing? Great to be on your show. I listen all the time.
MARKMy comment is, I'm in my mid 40s and I worked at a company, a Fortune 500 company, that relies on older people and they are getting quadruple retirements, pensions, retirements from other jobs and there's no incentive and they -- the company relies on these older folks to not be motivated to create change in the workplace and it's very frustrating. When I get their age, I'm not gonna have all these pensions and retirements and all that.
MARKAll I have is a marginal health -- retirement plan and so it's kind of turned from the greatest generation to the greediest generation.
FARRELLWell, I'm gonna push back on the greediest generation because people are trying to work and people are trying to make an income. And some of the calls that we've had, you know, people really want to continue to be engaged in the workplace. So I don't think that's being greedy. But here's the thing that where I think Mark's gonna be a beneficiary and even more so -- my oldest is 28 years old and my youngest is 22 years old. This is a massive improv act. This is a massive experimentation.
FARRELLHow is this going to unfold, this notion of working longer?
REHMAnd we're in this transition change?
FARRELLIn this transition. So the younger generation is going to benefit because the path is going to be a lot clearer. And what that means to be working longer is going to enter into their planning at a much younger age and I think companies are starting to realize that, you know what, we have to actually build in -- we have to have a retirement savings plan, but we also have to help our employees embrace this working longer movement.
REHMBut see, over and over again, we hear and Darlene on Facebook writes, "by not retiring, people are locking up the job market, preventing younger college graduates from finding a career."
FARRELLBut when older workers are employed, younger workers are employed.
REHMSo you think the economy just expands.
FARRELLAnd you probably -- I mean, we're back and sort of past the era of just really bad over discrimination. We're in the early 1980s. And I remember so many op-ed pieces that as more and more women came into the workforce, there weren't going to be jobs for men. This was a zero sum game. Well, guess what happened? We got a lot of jobs for women. We got a lot of jobs for men. It's not a fixed pie. It continues to expand.
FARRELLAnd also, these jobs -- a lot of times people are going to create their own company, their own work. Younger people are starting companies at an astonishing rate. But here's the statistic that always gets me. The 55 to 64-year age group, a quarter of all new businesses are started by that age group. We think about starting your own company, a new company, Facebook with Mark Zuckerberg or an earlier generation...
REHMBut they are young ones, yeah, yeah.
FARRELLYou know, Bill Gates with Microsoft. But you know what? It's older people because they have networks. They have connections. They can -- these aren't big companies, by and large. These tend to be, you know, taking advantage of what they've done and going out so they can avoid age discrimination. So I think that there's -- again, there's just a lot of things going on. And the nature of a lot of things going on is that some people are going to be left by the wayside.
FARRELLAnd that's why we need to get more and more people working to provide the resources to help those people out.
REHMDo you consider yourself an optimist?
FARRELLI am a genetically-based optimist, yes.
REHMGood for you. Chris Farrell. His new book is titled, "Unretirement." Give me quickly some resources people can turn to.
FARRELLThe big resource is encore.org. That's a wonderful resource. The AARP has their reimagining live initiative. That's another place you can go.
REHMExcellent. Thanks for listening all. I'm Diane Rehm.
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