Personal Finance

Baby Boomers Are Bucking This Retirement Norm

David Beren

Published: November 16, 2024 10:30 am

24/7 Insights

• Baby boomers are working long past the traditional retirement date. 
• There are several reasons why baby boomers are skipping retirement. 
• Baby boomers are unwilling to give up their passions and income.
• Also:Are You On Track to Retire? Take This Quiz and Find Out ^(Sponsored)

For one of the longest periods in American history, it was widely agreed that most people would aim to retire around 65. Sure, you could keep working until you are 70, but for most people, between 60 and 70 would be the right time to call it quits. 

While this may have been true a decade ago, a lot has changed over the last ten years, and baby boomers are bucking traditional retirement norms. Instead of just saying goodbye to the workforce, baby boomers are leaning into working longer and, in many cases, finally pursuing their passions. 

As a result, the traditional retirement age of 65 is no longer held in the same regard as it once was. 

Starting New Businesses

Many baby boomers who have made enough money to retire at 65 may have decided to open a new business. Instead of taking the easy road and jumping into a retirement lifestyle, this age group has bucked the trend and decided to start something new. 

According to AARP, more adults over 50 are starting new businesses at a higher rate than they have for the last twenty years. The data points to around 25% of those ages 55-64 being responsible for new businesses popping up in America. 

It’s safe to say that starting a business is one way that those who have plenty of work experience can expand their goals in a more fulfilling way. It might be that some boomers have been pushed into this by a previous job loss, but it’s overwhelmingly, at least 90 plus percent, of those in this age starting new businesses voluntarily. 

Pursuing Long-Held Passions

In the same way, as baby boomers set up new businesses, many of those in this age group who are not retiring are not doing so because they are pursuing long-held passions. This group had to put these passions aside, potentially for decades, to make a more substantial income. 

However, this mindset has changed, and instead of stepping away from the workforce completely, baby boomers are finally free to pursue passions they may have once considered impossible. For many people, pursuing a passion allows them to do something they love and unlocks creative endeavors. A passion could be painting and selling it at weekend fares or volunteering at a pet shelter. Anything that fits this criteria but isn’t the same career a boomer once held could become a passion. 

A March 2024 Fidelity Investments State of Retirement Planning study supports this passion idea. This report found that 66% of Americans were more intentional about choosing work based on personal passion. Many baby boomers see this as a new phase in their life. 

The Gig Economy

There is no question that the gig economy, with jobs such as Uber drivers or freelance consultants, is helping to expand the income and passions of baby boomers. Most notable is that according to a recent Gallup poll, more baby boomers are participating in the gig economy than millennials and Gen Xers. 

It’s estimated that as many as 1 out of 3 three baby boomers are taking on gig economy jobs as a primary income opportunity. With the rise of technology and app stores, it’s easier than ever for baby boomers to set their hours, work part-time, and scale back how much they are working without altogether leaving the workforce. 

With costs rising due to inflation and household bills getting more expensive, jumping into the gig economy is a great way to help offset these rising costs for baby boomers. 

Returning to the Workforce

LinkedIn’s 2023 study showed that the share of baby boomers re-entered the workforce was up 24% over 2022. For many of those included in this number, there was a financial motivation spurred by inflation and the rising cost of living. However, some wanted to return to the workforce for additional social interaction. 

The LinkedIn study’s most notable finding is that those re-entering the workforce are doing so purposefully. The same study indicated that over one-third of those LinkedIn evaluated were returning to the workforce only to find a job that aligned with their values. This number was well above Gen Z, of whom only 19% said they were looking for work they found to be purpose-driven. 

Another reason baby boomers are returning to the workforce is that we are simply living longer. With one out of every five Americans over 65 still employed, the number is more than double that of the mid-1980s. 

Take the story of Phyllis Korff, a former stay-at-home mom who decided to attend law school at 35 and worked for her firm for 33 years. However, Phyllis left after her old firm implemented a retirement policy and joined a new firm where she has been for 5 years with no plans to retire. 

Volunteering and Philanthropy

Similar to the idea that many baby boomers stay in the workforce to pursue their passions, a strong percentage of those doing so solely dedicate time to nonprofit work. An Urban.org report indicates that more than six out of every ten adults aged 55 and older are involved in volunteer activity. 

This could result in hundreds of hours every year spent working for both paid and unpaid jobs, which holds up retirement. The number doesn’t drop when you look at 65-74-year-olds or the traditional retirement years, as 60% of this age group does some form of non-paid volunteering. Surprisingly, this number jumps to 71.9% of those 65-74 volunteering for money, which also holds up moving entirely into a retirement mindset. 

Views on Aging

Perhaps one of the biggest reasons baby boomers are skipping the traditional retirement age is that views on aging have changed dramatically. Take Renee Stanton, who recently turned 61 and has worked in IT roles her entire life. Renne has been fortunate enough in her career to earn enough to retire right now. 

The thing is, Renee enjoys her job, has no desire to leave the workforce, and still feels like she has plenty of time left to give to it. After watching her father retire at 87, she doesn’t want to regret leaving the workforce too soon when she is mentally and physically able to keep going. 

Best of all, older adults are healthier than ever, which means that those who might have previously viewed being aged 65-70 as the end of the road for a career no longer do so. We live during a time when preventative healthcare is more accessible than ever, meaning physical declines are not as common as they were 30 years ago.