“When I’m Sixty-Four”

Are you ready for retirement–however you define it? Plan ahead. Millions of Americans who once thought “don’t trust anyone over 30” may be wondering “will you still need me, will you still feed me, when I’m sixty-four?”

…will you still need me,will you still feed me,when I’m sixty-four?

If you can identify this song by the Beatles, you probably also know it was written by Paul McCartney and was released on the album, Sgt. Pepper’s Lonely Hearts Club Band.

It also means you are likely to be a member of the “baby boomer” generation. The early members of this generation were born in 1946 and there are some 78 million baby boomers born from that date through 1964.

People in this demographic group have had and continue to have a major impact on American society–just because of sheer numbers. They represent about one-fourth of the US population and about 38% of voters.

They are also getting older. When McCartney wrote his song about turning 64, most boomers thought it was cute and wondered if they would still be alive when they became 64. Since, at the time, one of the most popular phrases among the group was “don’t trust anyone over 30,” 64 seemed like it would never come and was nothing to worry about.

But now they are getting close to the magic number enshrined by the McCartney hit tune. Boomers have redefined the popular preferences in our society from cars to clothing to work habits. Chances are, they will also redefine the meaning of retirement.

A 60-year old person in America can expect to live another 25 years of so. Retirement is no longer something you do for several years before dying. Retirement for many members of this group will last for 30 years or longer.

Chances are, many boomers will retire and start a second career. There are already dire predictions about huge numbers of people leaving the federal workforce en masse. Chances are, many of them will stick around longer than earlier generations. They are healthier and well-educated. Many realize they do not have enough money to last through a retirement of 30 years or more. Others just enjoy their jobs and want to continue working.

Many federal employees in this generation are better off than the vast majority of Americans because of the Civil Service Retirement System (CSRS) and the Thrift Savings Plan. Very few workers still have a defined benefit plan but this one still exists, is backed by the good faith and credit of the US Goverrnment and is adjusted annually for inflation. Moreover, the health benefits of federal employees carries over into retirement. In short, those who elected to work for Uncle Sam for a career are likely to have a very good retirement.

According to the Wall Street Journal, the richest 20% of boomer families have a net worth of $766,000. The next tier has a net worth of $245,100 and the average (or the middle 20%) have a net worth of only $107,150. (See Will Boomers Bust in Retirement?)

Regardless of where you may fall on the financial chart, don’t make the mistake of underestimating how long you will live and how long your money has to last. If you are a 65 year old man, you have a good chance of living until at least 85 and a 17% chance of reaching 95. If you are female, the numbers are even higher as women outlive men in all age groups.

Will you live to be 100? The Census Bureau says that by 2046, there will be more than 800,000 Americans that reach the century mark. About 70% of these people will be female.

For those of you about to retire, remember another portion of McCartney’s When I’m 64:

When I get older, losing my hair,many years from now,will you still be sending me a valentine,birthday greetings, bottle of wine?

Keep this mind when you get close to retirement. If you decide “I am retiring; I will put all of my money into the G fund to preserve what I have until I die” you are probably making a big mistake. You need to preserve your capital but you also need to plan on needing money for a number of years. The G fund won’t do that for you. Historically, investors have needed to have money in stocks that will (hopefully) increase in value and prolong your financial health as well. (See Will Baby Boomers Destroy the Stock Market?)

Make sure you enjoy your retirement. Plan ahead.

About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters on federal human resources. Follow Ralph on Twitter: @RalphSmith47