MS. DIANE REHMThanks for joining us. I'm Diane Rehm. The workplace in America looks nothing like it did 20 years ago or even 10 years ago. One significant change is the age of the average worker. With baby boomers entering their 50s and 60s and workers delaying retirement, there's a rethinking of physical expectations, job flexibility and much more.

MS. DIANE REHMJoining me to look at these issues: Jean Setzfand of AARP and Richard Johnson of the Urban Institute, joining us from a studio at MIT in Boston, Joe Coughlin of MIT's AgeLab, and, from WBEZ in Chicago, Matt Sedensky of The Associated Press. Throughout the hour, I'll look forward to hearing your questions, comments. Join us, 800-433-8850. Send us an email to drshow@wamu.org. Follow us on Facebook or Twitter. Welcome to all of you.

MS. JEAN SETZFANDThank you.

MR. RICHARD JOHNSONThanks for having us.

SETZFANDThanks, Diane.

REHMGood to have you all with me. Matt Sedensky, you've been covering this issue for quite a while now. How grey is the workforce today? And how fast is the workforce changing?

MR. MATT SEDENSKYWell, we've seen the average retirement age consistently falling decade after decade until that trend finally stalled in the late 1990s and eventually began to reverse. So at the turn of the millennium, there were about 19 million workers that are 55 and older. And in just a few years from now, in 2020, the Bureau of Labor Statistics is projecting more than 41 million, so more than double in just a 20-year period. And we're looking at least one in four workers being so-called older workers, people that are 55 and older….

REHMSo is that in any particular sector? Or is across the board, Matt?

SEDENSKYIt's pretty much across every occupation. We did an analysis of the several hundred job classifications that the Bureau of Labor Statistics has, and more than 90 percent of them saw an aging of their workforce.

REHMSo to you, Jean Setzfand, are people choosing to work longer, or do they have to?

SETZFANDWell, we see really two driving forces, and one is out of desire. And one is out of need. But it's kind of a balance of the two. It's both financial as well as fulfillment. So when we asked our survey, it's pretty much equal, in the 90 percent responses in terms of major reasons why people want to keep working. And it is really driven by that need for money. But really there is also an equal amount of desire to work because of fulfillment.

REHMWell, and that fulfillment involves just ordinary satisfaction of getting up, going out, doing something of value each day.

SETZFANDAbsolutely. You want to stay productive, but a lot of our older workers say that they want to feel like their skills are being used. But also, to have the opportunity to be some -- be a part of something that matters.

REHMJoe Coughlin, it would seem to me that that's important that you've got to be doing something that matters. And if we've been doing that for a while, you'd like to keep on doing that. We are growing younger even as we are growing older. I'm sorry, Joe. We've got a bad connection there and not quite hearing you. Would you repeat yourself?

MR. JOSEPH COUGHLINSo I said the baby boom generation may no longer be young, but they are perennially youthfully. And they're working not just for dollars and purpose, as we mentioned, but men in particular do a very bad job at creating friends outside the workforce.

REHMHmm.

COUGHLINSo that social network is ever so important. And staying in work, whatever that may take, is about having meaning, and, as you put nicely, having a reason to get up in the morning is always a good one.

REHMNow, again, though, going back to the sectors of the economy, I would think that those involving doing hard physical labor would be those where retirement is pretty much staying where it has been all along, Joe.

COUGHLINYeah. We do see, shall we say, pockets of labor, particularly with physical labor, where retirement is not just something you want to do, but, in many cases, our bodies force us to do. But this is where we do see the redesign of the workplace, such as robots on factory floors, to help that 50-, 60-, 70-year-old worker who knows what quality is and how to make a crafted product, be it a car or anything else, but may need a little hand on the line, so not to get hurt or not to slow down the line.

COUGHLINSo I would say that, yes, we certainly have a physical labor issue. But new technology and new design of the workplace may actually extend our ability to work.

REHMRichard Johnson, what is that extension like and going to be like for those of us growing older?

JOHNSONWell, it's not going to be as if we're going to work forever. Retirement is still going to exist. It's still going to be an important part of the life course. But people are going to have to work longer. And what we're seeing is that a lot of people are changing jobs at older ages. So it's not the case that you have to stay in the same job that you held for your entire career. About 50 percent of people changed jobs after age 50, and about half of those move into whole new occupations. So there's a lot of re-careering at older ages, and I think that's important.

REHMBut isn't it harder to change jobs above the age of 50? Isn't it harder to find new jobs after the age of 50?

JOHNSONCertainly, and it's certainly hard these days when the unemployment market is not -- I'm sorry, the employment market is very bad. Everyone's having trouble finding jobs. Older people have been hit particularly hard. If we look longer term, though, I think we're going to see much greater demand for older workers than we're seeing now. And a lot of that's really driven by demographics.

JOHNSONSo over the next 10 years, people 22 to 61, that population, those are prime age workers, if you will, growing only 2 percent over 10 years, whereas, if we look at people 62 to 69 in that part of the population, it's going to grow 29 percent.

REHMWow.

JOHNSONSo you look at the entire growth of the population, 22 to 69, two-thirds of the growth over the next 10 years for that population is going to be people 61 and older. So we're just going to need older workers increasingly to meet employer staffing needs.

REHMTo just to meet employer staffing needs, you're saying. What's happening then to these so-called younger workers? Are they -- where are they?

JOHNSONWell, there's just not as many of them as there used to be. I mean, that's really what's happening. We're seeing the cohort kind of behind the baby boom is a lot smaller than the baby boom cohort themselves. And so it's really just a function of fertility over the past 40 years playing out.

REHMJoe Coughlin, that's pretty surprising that that younger age group is going to be smaller and smaller and the older group larger and larger.

COUGHLINWell, part of the disruptive demographics of an aging society is not just about us living longer but having fewer children. You know, the mothers of the baby boomers in general had 3.8 kids per mom. The baby boomer mom had on average 1.9. So we're having far fewer kids, and there is that drop in the population. And as mentioned, we're about 20 years of trying to fill the gap.

REHMJean Setzfand, I think that would be good news for AARP in that you've got an awful lot of people joining up, looking for ways to be more productive, looking for options through AARP.

SETZFANDAbsolutely. As Richard mentioned, retirement is still out there, but work is a part of that retirement as we see. We love the fact that there's a greater need for people to work longer. We just want the employers to also be aware of that as well. We do have programs that really recognize employers who definitely see the value of experience workers. And we also know that, as Richard cited before, it's not even just age in terms of having a more difficult time finding a job these days. So many things have changed.

SETZFANDLooking for a job for somebody who's 50 and older is no different for somebody in their 40s or 30s 'cause the process of looking for a job is so different these days.

REHMMatt Sedensky, what about the idea that some younger workers, even now, have begun to feel resentful of older workers who choose not to retire but to stay on the job either because they find it fulfilling or because they need the money?

SEDENSKYYeah. That resentment is certainly out there, but it's not really grounded in fact. If you talk to economists, they say that the presence of older workers in the workforce is actually a power behind expanding the economy, behind creating more jobs that younger people can take. So while at the microeconomic level, you might see these examples where, well, this 80-year-old guy hasn't left his job, and so I can't get a promotion, when you look at the larger macroeconomic issue, most economists believe that it expands the economy.

REHMBut, Joe Coughlin, is there one side of the company perhaps that wants to usher out the older ones and another side of the company that wants to keep them?

COUGHLINYeah. Today's employers have a split personality. We know that, shall we say, the chief financial officer and maybe human resources sees this large benefit and salary package that they'd like to move off the books. And, quite often, they give a package to that 50-something, 60-something person, and they're off the books. But the very next day, quite often, the CEO or even the people that are in the office say, where is so and so that had the relationship with that client, or why did we build that legacy system to work that way?

COUGHLINAnd all of a sudden, they realize they have to search either the nearest golf course or the competitor down the street where the package walked out the door the day before.

REHMJoe Coughlin, he's head of MIT's AgeLab. Short break here. When we come back, we'll talk further, take some of your calls, questions. Stay with us.

REHMWelcome back. We're talking about older workers, how they are changing the workplace, how in some cases the workplace is adapting to them. With me here in the studio, Jean Setzfand. She's vice president of financial security at AARP. Richard Johnson is an economist with the Urban Institute. Joining us from MIT's AgeLab is Joe Coughlin. And from Chicago's WBEZ, Matt Sedensky. He's a correspondent for the Associated Press.

REHMAnd since 2008, he's led AP's coverage of older Americans. Richard, talk about the specific challenges for employers of keeping an older workforce.

JOHNSONSo one of the issues is something that Joe mentioned, I believe, earlier, which is just the workplace design. So you have older workers. Are they physically able to do the types of activities that they could do 20 years ago and that the employer needs to get done. So one of the things we're seeing employers doing is adjusting the workplace design to better accommodate older workers.

JOHNSONSo, for example, in some factory floors, they're taking the cement flooring and over that they're putting wooden platforms because that's easier to stand on, it's less difficult for your back.

REHMInteresting.

JOHNSONWe're seeing employers doing things like, maybe brighter lighting in some cases because older workers don't always see as well. Adjusting, having monitors that can adjust, that can adjust, that can angle so that there's less glare from your computer monitor. So that's one of the big issue that I think employers face.

REHMAnd it would seem to me that that would benefit all workers.

JOHNSONThat's right. That's one of the interesting things about -- there's a movement now -- people are talking about an age-friendly workforce. But what an age-friendly workforce really is, is a worker friendly workplace. And so many of the these changes that employers are making benefit not just older workers but younger workers. And one of the things we're seeing that older workers are really demanding is more flexibility in the workplace.

JOHNSONSo they want to work longer. But if they've worked for 40 years and if they've accumulated enough money, maybe they no longer want to work full time, 9 to 5. And so they want to slowly phase into, wind down to retirement. And that creates some challenges for employers. But what we're finding is that those types of changes that employers are making, like introducing flex time, allowing more telecommuting, having more part-time work, job sharing.

JOHNSONThose types of things actually raise productivity and can save money in the long run.

REHMJoe Coughlin at the AgeLab, you apparently have an interesting way of identifying those needed physical accommodations. Talk about AGNES.

COUGHLINWell, AGNES, developed here at the AgeLab stands for Age Gain Now Empathy System. And it's a suit that our students and researchers and companies we work with can put on to give the user the feeling of, shall we say, being osteoarthritic, type 2 diabetes and being in to advance stage. So making it a little harder to reach high shelves, division issue, the stretching to be able to lift and carry different things.

COUGHLINI think the focus that we've learned from AGNES as well as from statistics is that there's good news and bad news with older workers. The myth might be that older workers are more likely to be ill and more likely to be out of the office. The fact is, is that they are less likely to be absent. They are less likely to be hurt on the job. But because of their chronic conditions and the natural aging process, when they do get hurt, they are likely to be out for a long time.

COUGHLINSo, really, an older worker doesn't cost you as much as people may think, if you can use the insights from AGNES and rethinking the workplace to be safer, emphasize well being, which will improve the well being and productivity across the life span.

REHMHow long has AGNES been at work?

COUGHLINAGNES was developed, see, a little bit less than 10 years ago now. And we've worked with companies as far and wide as Siemens and Daimler to retail stores near you.

REHMAnd, Jean, that must give you real optimism looking forward.

SETZFANDAbsolutely because we definitely see through the winners of our Best Employers program, there are some industries that really hone in on experience. Those who need highly skilled workers from the MITs of the world, the Cornells of the world, the hospitals, engineers. But having this notion and these technologies that Joe is developing at MIT and transferring that across the board more widely, that's something we definitely appreciate.

SETZFANDBecause many of what we've seen through our Best Employers winners is they're actually doing this not so much out of the goodness of their heart, but it's really very much business driven. They want to keep their skilled workers. They need those skills and want to retain them. They actually go and even recruit them.

REHMAnd, Matt, I'm interested to hear Joe say that older workers get sick or get hurt less on the job than younger workers. Does your work verify those claims?

SEDENSKYYeah, absolutely. We've seen that a lot of the stereotypes about older workers just aren't grounded in fact. But like Joe alluded to, there are those physical challenges that people face as they're aging and through their occupations. And in our survey recently by the AP-NORC Center, more than a third of workers said that the physical aspects of their job are more difficult to complete than when they were younger.

COUGHLINAnd if I may add, I think that we may underestimate or over-estimate what is an older worker. Just think of the following. By age 40, you need 20 times more light to see as well as you did at age 20. So aging gets personal very fast.

REHMAging gets personal. Richard.

JOHNSONIt certainly does. And, you know, I think that's -- what's I think really important to keep in mind here is the distributional issues that are involved. So we're talking about older workers as this homolytic group almost, and yet there's a lot of diversity there. And there are a lot of people who simply can't work at older ages. You have health problems. And as we're developing policies that encourage people to work longer and that really promote at older ages, I think we really have to step back and think about what are we going to do about people who can't?

JOHNSONAnd what do we need to do to fix the disability system, for example, just because there are some people who can't work longer doesn't mean we shouldn't promote that. You know, one person gets sick, everyone doesn't get the day off. On the other hand, we do have to provide some sick leave, if you will...

REHMOf course.

JOHNSON...they simply can't make it that long.

REHMMatt Sedensky, what do we know about the health of the baby boomers specifically?

SEDENSKYWell, they're healthier than previous generations. They're projected to live longer than previous generations. They're more active than previous generations. So all of that is kind of fueling the idea of them working later in life.

REHMJoe

COUGHLINThere is also a flipside, too. My colleague in the lab, Dana Ellis, has been crunching number from the Gallup-Healthways Well-Being Index. And here's even better news. If you are working, you are more likely to report a higher state of well being, not just physical but emotional health as well. So work may not be just something necessary and give you something to do, it may keep you healthier in the long run as well.

REHMGo ahead, Richard.

JOHNSONOn the other hand, what we are seeing is a greater disparity by education in terms of health status. So a lot of these improvements that we're seeing in health status are really occurring among the people with the best education. And it's the people who have limited education, who have worked difficult jobs all their lives perhaps, we're not seeing much improvement at older ages for those people.

REHMI see.

JOHNSONAnd in fact, we're seeing some declines. So it's what -- I think we're -- at risk of happening is just that you're seeing economic inequality growing over time generally. The fact that as we extend the workforce for most people that could really exacerbate that trend. They had -- the lucky people who are well-educated who can work late into life, they're going to do really well. But you're going to increasingly have this portion of the population that can't work longer.

JOHNSONThey are the ones who earn less when they're working and now they're going to have shorter work lives and they're really going to experience very uncertain retirements.

REHMJoe?

COUGHLINAnd this is not just a personal issue, this is going to be a public policy issue when you start thinking about the average American farmer today is 57 years old. There is a shortage of truck drivers out there and they're quickly approaching 50 years old as an average. So we're actually finding pockets where there's not enough people to fill those shoes of jobs that are very physically hard to do.

REHMSo where does that lead us, Matt Sedensky?

SEDENSKYWell, we're just going to see this trend continuing. We're seeing not just retirement being delayed but it's being redefined. In our study, half of the workers revised their retirement plans, now plan to work longer. Eight in ten say they're at least somewhat likely to continue working after they've retired. So we're seeing that line between work life and retirement life really being much more blurred than it has been.

REHMHere's an email from Judith who says: At 73 years of age, a single woman, I continue to work full time. I have a home mortgage that defeats my desire to retire or at least work part-time. That's not all bad as my employer benefits supported my efforts at obtaining higher education. I graduated with a PhD in Applied Gerontology in 2011, just two years ago. I have now become part of the population I've studied for years.

REHMSo with that said, I feel I have to work, but I find ways to reward myself with the struggle. Jean?

SETZFANDJudith, first of all, congratulations.

REHMI should say.

SETZFANDAnd, you know, that's really great news. I mean, I think one of the things that I like to tease out in Judith's story is what the employer did for her in terms of furthering her education. And, again, we see that also in the theme of some of our best employers, really focused on not only trying to retain their workforce by giving them good opportunities but continuing to retrain them for other jobs and proving on-the-job training.

REHMYou know, you've mentioned that Best Employer several times. You -- AARP has conducted this study identifying the 50 best places to work for older people. How do you evaluate these employers and give me an example of some of the things they do provide to put that into that category.

SETZFANDThey -- the employers actually have to go through a pretty rigorous application process. So we collect from hundreds and hundreds of employers a lot of information about their workplace practices, both in terms of recruiting practices, benefits that they provide, not only provide but people who take advantage and participate in their programs. We also look at the work conditions in terms of additional qualitative benefits.

SETZFANDFor example, one of our best employers, Blue Cross Blue Shield of North Carolina, they actually create a community for their 50-plus employees. As Joe mentioned before, for a lot of men in particular, they're not really billing that work outside of the workplace. So this is a method for you to build a network within the workplace that can extend well beyond that location. So we go through the application process and we essentially grade each of the applicants across several different categories.

SETZFANDAgain, from the workplace environment, to benefits that they provide and sort of the extra sort of above and beyond qualities that we see in some companies.

REHMJean Setzfand of AARP. And you're listening to "The Diane Rehm Show." We have many callers waiting. I'm going to open the phones, 800-433-8850. First to Tim in Elkhart, IN. Hi there, Tim.

TIMHi, Diane. It's good to talk with you.

REHMGood.

TIMI'm in my late 50s. I worked in mostly RV production for a long time and now, you know, I'm a security guard, believe it or not. You know, and the pay is like half of what it used to be and, you know, it's one thing that I'd like to emphasize is that, you know, even though we're still working, we're probably making less money.

REHMYeah, I understand that. What do you make of that, Joe?

COUGHLINI think that one of the requirements that we're going to have to get used to, maybe this is part of our new retirement planning is a flexibility of not just being able to stay in the workplace but to take different positions and different professions altogether and salaries that we may not have thought about. That may be the phased retirement that we have to start thinking about.

COUGHLINAnd in fact, to stay competitive in the workplace as an individual, we may now have to stop thinking about how we plan for our kids' college education but how we start planning a retirement for a mid-life sabbatical at age 40 or so just to make sure that we can make the business case to stay in the workplace. That is a stay and take classes online to take those training programs that may be available to companies so that we can make the case that we belong there and we have a competitive advantage to ourselves and to the employer.

REHMBut clearly taking a sabbatical involves having an awful lot of money to back you up, to take that sabbatical.

COUGHLINNo, I don't -- I don't mean stepping out of the workplace. I'm talking about the new online college workforce, for instance. Taking a master's program at Georgia Tech from your home at night for $7,000 is a new statement about what the future of education looks like. It's not moving to the dorm and moving four years off campus.

REHMJean?

SETZFANDJoe, I love that concept. I think one of the things to be wary of, though, when you're thinking about this is first and foremost understand what the job market is. There's a practical side and there's a passionate side too, right? You want to go after a job that you want to do but make sure that there is that job available in the location.

REHMWhich is why I love the earlier emailer about graduating in applied gerontology.

SETZFANDAbsolutely, absolutely. So thinking about the demand for the jobs of the skill set that you're actually achieving through these training courses is really important.

COUGHLINAnd I think it says something about younger workers as well. I know we're talking about older workers, but we should be speaking in terms of longevity.

SETZFANDAbsolutely.

COUGHLINThe kids graduating today should be aware that they will probably have five, six, seven different careers not jobs.

REHMAnd, Matt, what does all this mean for savings and money and enough to keep us going not only through retirement, but as our earlier caller from Elkhart indicated having to make do with much less money.

SEDENSKYYeah. I mean, the longer we live, the more money we need. And unfortunately, you know, define benefits, pensions are disappearing and a lot of that security that people relied on for so many decades is no longer there. In our study, we asked about people's levels of savings outside of their primary home and any pension that they might have. And a sizable number, about a quarter have less than $10,000 in retirement savings and investments.

SEDENSKYThe majority of minorities in our study had less than $100,000 in savings, and a huge number of minorities, 40 percent, have under $10,000, double the rate of white respondents. So there is a huge amount of savings and security that is in part driving the need to work later.

REHMMatt Sedensky, he's a correspondent for the Associated Press covering older Americans. And we'll take a short break here. Your calls, your emails when we come back.

REHMWe're talking in this hour about how older workers are affecting and indeed in some cases changing the workplace. However, there are still difficulties. Here's an email from Anne who says, "I'm 59, female, can't even think about retirement. My generation do not have the security our parents had since retirement pensions are fewer, our 401 (k) s are questionable, and many of us have had layoffs at 50-plus. Employers do not seem to value the older worker." Jean Setzfand.

SETZFANDAbsolutely. We've been doing a lot of research lately about this whole notion of retirement. And is it gone? So it might be. We might be all about what Anne is basically describing, an age of resilience and lasting for a much longer period of time. So one of the things for Anne really is to really consider that she's certainly not alone out there. And an important factor of retirement planning, in my opinion, is to actually take a hold of what Joe talked about before in terms of life planning, career planning, knowing what you want out of life, and then budgeting for that.

SETZFANDSo rules of thumb for many people these days really don't apply 'cause our future life in this next stage, whether it is retirement or something else, needs to be clearly defined, and you go after that. Money is one element of it that is a means to an end. But so many other things, like a career, a long career or multiple careers, several transitions of careers, are absolutely important.

REHMBut then how can you plan for that? Say, as a young 25-year-old college graduate moving out into the workplace, how do you plan?

SETZFANDAgain, I think it's a matter of two things. It's pragmatic as well as purpose. There's things that you dream about that you want to do, but at the same time you need to understand what you can provide from a basic skill set, right? So think about it along those lines. There's always a little dreaming involved, but there's a lot of practical aspects of this also involved as well. So think about, first of all, again, what we said before, what jobs are out there? What's growing in demand? What skills are necessary? Do I have the aptitude or the capability or desire to do those jobs?

REHMAnd what about savings?

SETZFANDFrom a saving perspective, you are in the driver seat, like it or not. So the more that you can really start to save earlier, the easier it becomes. The other element that I have to bring in here, coming from AARP, is how important Social Security is for so many people now. It's really truly the only universal sort of pension that's out there. 'Cause the difference between the pension plan, that defined benefit versus defined contribution, is a stream of income that lasts you for the rest of your life.

SETZFANDThat level of security is so different than being -- having to depend on the gyration from the market. So Social Security is exactly that for almost everybody. So few other people have that pension right now.

REHMRichard.

JOHNSONThat's exactly right. And when we are thinking about Social Security, it's really important to keep in mind that, although you can start collecting Social Security at age 62, if you do, you're going to get lower lifetime -- you're going to get lower monthly benefits for the rest of your life than if you wait longer. So if you wait till your full retirement age, which is now 66, your monthly payments will be one-third higher. So that's really important. But Social Security's absolutely key.

REHMAnd go ahead, Joe.

COUGHLINI think there's a new industry about to emerge, and maybe it'll evolve out of what we currently think financial planners and retirement planners do. But the business of longevity management, and that's really about how to keep you agile enough to be on top of your education needs, being able to scout out what those changing professions are going to be and, yes, saving money. But it's now about the long game, not planning for a few cruises at the end of one's work time. We now have to start planning from college age all the way out, a life span, not a retirement plan.

REHMAnd, Matt, the question is, have those who are the baby boomers have this thrust upon them all of a sudden? Or have they been planning all along?

SEDENSKYWell, we've seen them saving at a lower rate than previous generations and accumulating debt at a higher rate. So they haven't been addressing across the generation some of the necessities for living a longer life. But, Diane, if I could, I think one of the big challenges, though, is not so much for the boomers but the generation coming behind the boomers. They're the ones who are really taking on debt at high rates. They're the ones who are much less likely to have the traditional pension plan than the boomers.

SEDENSKYThey're the ones who aren't saving as much in their 401 (k). You know, the boomers, on average, aren't doing so terribly. They had the big run-up in housing prices that did decline in 2007, but that left them with a -- many of them with a large retirement nest egg that the generation behind them isn't going to get.

REHMAll right. Let's take a call from Robin in Charlotte, N.C. Hi there.

ROBINGood morning.

REHMHi.

ROBINOne point and -- well, two points, actually, following up on your comment about young people and how they make their choices. Being the mother of three children, ages 27 to 21, if you tell these children that they're going to have six or seven careers over their lifespan, and if they're not as fortunate as my children coming out of school without any college debt, because my husband and I made that decision for them years ago, how do they even begin to plan what majors to go into or where -- what to study in college if they know that maybe this is not something that they're going to have a career for over a lifespan?

ROBINI mean, I'm a nurse. My husband's a physician. So we're pretty much set. We got a lifespan that, you know, involves that career in healthcare.

REHMYeah. Joe, how do you respond to that?

COUGHLINHealthcare's an interesting example, too, where the average nurse is about 49. The average doctor's 53. We do not see a rush to that profession either, unfortunately. No. I think we need to rethink the future of education to be able to fill up the lifespan we're planning for. That means learning how to think, learning how to understand technology because learning a given, say, computer program is about as useful as learning the iPad for a career. It's something that's been here for only four or five years, and yet it's now the new normal.

COUGHLINSo learning how to think, learning how to learn, and ensuring that technology is part of everyone's education...

REHMMm hmm.

COUGHLIN...because it's going to be part of everyone's life.

REHMJean.

SETZFANDBuilding on what Joe is saying, I think we also have to relearn how we earn our money as well, that we always know -- we know of the concept of investment diversification. I think we also have to think about income diversification. How do we actually have more than one stream of income? There's plenty of ways to do that now with so many technology advances. So from a B&B, where you're actually renting out a room to a lot of selling your things on eBay, there's a lot of ways to -- from a more traditional to untraditional mechanism for earning income.

REHMBut now let's address her primary concern. How do you advise young people going through college as to what they ought to be thinking about how many roads they could possibly take that would at least get them started and continue their journey, Joe?

COUGHLINI would love the -- I have a daughter in college now, and I think that it is a fine balance between passion and practical.

REHMRight.

COUGHLINAnd so we do have to pay off the college loans. We do have to pay the mortgage. And we know that from literature for decades that only one, two, 3 percent of us ever, shall we say, self-actualize and enjoy tremendously what we do. We find ourselves as we develop our careers along the way.

REHMAnd here's an email from Mimi who says, "I've been worrying about young folks trying to enter the workforce. I remember in the '70s or '80s that the federal government offered incentives for early retirement. Maybe some corporations had done that, too, but now it's just people staying and staying while unemployment is high. How will the new graduates pay for college loans and get established?" Richard.

JOHNSONWell, I mean, that sort of gets back to this issue of, is the fact that older workers are staying on the job, does that reduce job opportunities for younger people? And, as Matt said earlier, the evidence really says that it doesn't, that when older people -- well, basically, what we want is we want expanding labor force. That is what leads to economic growth because it allows people to specialize more. Everyone can work in that one area that they do best that increases national income.

JOHNSONSo that's why, in the U.S., where we have a large and expanding labor force, that's why we're not stagnating like Japan where the population is stagnating, in Europe, where both the population and the economy are stagnating. There's this idea of younger -- older workers taking away jobs from younger workers really doesn't hold water once you look at the actual facts.

REHMAll right.

COUGHLINAnd, also, look where we have shortages, too. We've got shortages in engineering, petrochemical defense, but we also have them in trucking, nursing, and the like. So there are openings. And the question is, where are the applicants?

REHMAll right. Let's go to Judith in Denton, Texas. You're on the air.

JUDITHHello. Thank you for receiving my call.

REHMSure.

JUDITHI'm going to retire in about 2 1/2 years. I'm 67. I'm an educator. And I have to retire at 70 because I'm not going to have enough money if I don't. I'm one of those that didn't save. However, what I'm going to do is leave the country. I'm going to live in Mexico in one of the largest communities outside of the United States that has the Canadians and Americans -- North Americans there. So it's the only thing that I can do. And I'm really, really excited about it, and I think a lot of people are doing things like that now.

REHMAll right. Jean, do you want to comment?

SETZFANDJudith, that's something that we do here also in terms of going abroad and retiring. One thing that I would say is I hope you've been there a lot. We like to tell people to practice their retirement so that they actually know when they get there that this is something they want to do. So if you're thinking about going to Mexico, if you haven't been, really practice your retirement now, even though it's 2 1/2 years away, and get accustomed to it.

SETZFANDAnd that also helps you actually set a basis for your expenses, too, 'cause, as you're living it, understanding what you need, that helps for the future as well.

REHMMatt, you just heard her say that she had not saved. She has to retire, so she's not going to have enough money, she says, to live here in the States. She's going to move to Mexico. And you talked earlier about the fact that people are saving less and less. But how do people get educated as to how much they must save if they're going to take care of themselves throughout their old age, whatever that might be?

SEDENSKYWell, the problem for a lot of people is nobody knows how long they're going to live. And it's hard to figure out, you know, 50 years in the future, 40 years in the future, you know, what inflation will be, how much money that you'll need. But go to any financial advisor, and they'll give you a percentage of how much of your income you should be stashing away.

REHMOn the other hand, some people, especially teachers in this society, don't make a heck of a lot of money. So they're sort of making it from paycheck to paycheck, doesn't make life easy.

SEDENSKYRight.

JOHNSONThat -- I'm sorry.

REHMGo ahead, Matt.

SEDENSKYWell, yeah, and that's the problem. And it's an issue that's faced, you know, all generations in the U.S. that we've seen this growth of lower-wage worker positions, and that's something that, you know, young people are facing as they get out of college. It's something that older Americans who want to remain working or re-entered a workforce or are looking for jobs are facing as well.

REHMAnd you're listening to "The Diane Rehm Show." I know you wanted to add something, Richard.

JOHNSONI just want to point out that one of the advantages that teachers do have, though, is that they have these traditional defined benefit pension plans. They have this -- they're guaranteed this lifetime stream of income when they do retire. That's something that most people don't have, and that's the really the challenge. As Matt was saying, you don't know how long you're going to live. What's important is if people can take their money and transfer it into this lifetime annuity, that's what we need to do. That's what we need to think more about.

REHMAll right. To Coatesville, Pa. Hi, Graham. You're on the air.

GRAHAMHi. As far as -- I just wanted to say I'm a truck driver, and I'm always moving. I can't always find a signal that's playing your show. But I'm always happy when I can.

REHMI'm glad.

GRAHAMYeah. You already kind of addressed my question. I wanted to know -- I'm 33, and I've already started saving for retirement. I was just kind of curious what kind of savings that I need to acquire to be able to retire around 65 and maybe plan on living another 15 years. But I guess your guest already said he can't really answer that.

GRAHAMBut I also want to ask, do people need to start rethinking their perception of the American dream at this point? 'Cause I always thought you work about, you know, 40, 45 years, and then you get to retire and seek interests and hobbies or whatnot that you can enjoy, you know, until you reach the end of your life.

REHMWhat do you think, Jean?

SETZFANDWell, first, in terms of the rule of thumb around savings, I think, save as much as you can. I think that's the only rule of thumb that really applies these days.

REHMBut what does that mean? I mean, does it mean saving now, depriving yourself now of some of the luxuries you might think you deserve because you're making a certain amount of money? What does it mean?

SETZFANDI love retail therapy no better than the other person, right? It is always good. But I think it is. Thinking of -- it's really hard. And Joe probably can tell us more about how the future gratification is always secondary to current gratification, right? So it's...

COUGHLINYeah, that...

SETZFAND...so much harder for us to kind of plan out what we need for the future. And I was kidding in terms of saying, save as much for the future as possible, but for many people, it truly is there. We have tons of retirement calculators that can give us a lot more sort of certainty and rules of thumb and other kind of analytics that go into that. That helps for some people, but it also scares you, too, when you look at that big number.

REHMAnd it also does not really prepare you for downturns in the economy. You never know what's going to happen 23 years ago. Joe, last word.

COUGHLINI think that living longer changes our social contract of what we expect from our employers and ourselves to live longer, better.

REHMAnd, Richard, you wanted to say something.

JOHNSONOh, (unintelligible) incredible risks that people face when they run up to retirement, as you said. The risk of one's health declining and not being able to work as long as you expected, the risk of losing your job and not being able to find a new one, and our estimates are about a third of people experience one of those shocks from age 50 to age 62. So it's very common.

REHMSo clearly the answer to a lot of people's questions about saving is do as much as you can. You may live a lot longer than you think and have many, many years. I hope you do. And thanks for being here, everybody, Richard Johnson of the Urban Institute, Jean Setzfand or AARP, Joe Coughlin, head of MIT's AgeLab, and Matt Sedensky of The Associated Press. And thanks to all of you for listening. Happy holidays. I'm Diane Rehm.