They grew up during a time of cultural change, and now are being forced to redefine retirement at midlife.
The 77 million Americans in the Baby Boom generation face an economic storm: The Wall Street meltdown trampled their retirement nest eggs more than any other group. After losing jobs during what they thought would be some of their peak earning years, many are struggling to get back into the workforce. Health care costs are rising, and declining home values mean they might not be able to count on home equity to guarantee an easier retirement.
"This generation will be sobered by their experience," says John Coyne, president of Brinker Capital, an investment management firm. "They may not have as extravagant a vision of retirement as they did last July."
The confluence of events has an even bigger impact on a subset of the Baby Boomers known to analysts as the Sandwich Generation. Those Boomers are putting money toward their children's college education and their aging parents' long-term care, as well as their own retirement savings.
The reality is sinking in: Baby Boomers, born from 1946 to 1964, are planning to work longer, save more money and spend less, to reach any semblance of the retirement they once envisioned. According to AARP:
•35% of those ages 45 to 54 have stopped putting money into their 401(k), IRA or other retirement accounts.
•25% said they have prematurely withdrawn funds from their retirement accounts.
•56% have postponed a major purchase.
•24% have postponed plans to retire.
"Today, I see myself working until I drop," says Kyril Wickenberg, 59, of Savannah, Ga.
The pain of unemployment
It may not be so easy.
When 1,097 Americans 45 and older were surveyed last December, 9% of them said they had lost their jobs in the past 12 months, and 31% of workers that age said that it is very likely that jobs will be eliminated this year, according to AARP's 2009 report.
Baby Boomers also are out of work longer than younger Americans. Last year, they were out of work 22 weeks on average, compared with 15 weeks for the 20- to 24-year-old age group, according to the Bureau of Labor Statistics.
They may find it hard to get a new job because they've had higher salaries. And that means they may have a higher threshold before they're willing to take another job, says Maria Heidkamp, a senior project manager at the John J. Heldrich Center for Workforce Development at Rutgers University.
But they also may be rusty about applying for a job, and their skills may be out of date, she says.
Wickenberg is out of work. He says he's lost several jobs in information technology because his employers thought his work could be done more cheaply outside the USA. Eventually, the periods of unemployment lengthened because companies seemed to prefer young college graduates.
"I got depressed and anxious," Wickenberg says. "I just saw my money slowly flittering away."
In 2005, he took a minimum wage job at a car rental firm, which allowed him to keep up with bills and not use his retirement savings. After 3½ years, he lost that job.
He's now gone back to college to get a bachelor's degree in information technology. He hopes that the four-year degree, combined with 35 years of experience in the field, will give him an advantage over younger graduates.
Even workers who thought they had planned perfectly and saved enough for their retirement are refocusing.