Good news; jobless numbers take a slight dip in November, from 10.2 percent to 10 percent. Bad news; it’s got nothing to do with your baby boomer clients.
A mainstay in response to increasing longevity and the need for retirement income is to advise clients they simply have to work longer. It’s good to be frank, but what if working longer isn’t an option?
The Labor Department reports the number of workers age 55 to 64 that are unemployed has tripled since 2007, while the rest of the unemployed for all other age groups doubled. Boomers who are employed – which has been trending down for the past 18 months – sank to 59.9 percent in November, an eight-year low and down from 60.3 percent in October. Simply put – they have a lot more ground to make up than other cohorts.
This reverses a trend of nearly three decades in which a greater share of older workers had jobs. At the peak of the last economic boom, employment among older workers rose to nearly 63 percent. It was a win-win, according to the Wall Street Journal; workers were seeking to keep up with the rising cost of living, while employers were more willing to hire older workers in a tight labor market.
“While it is difficult to quantify just how many Americans are retiring earlier now amid weak job prospects, recent work from two Wellesley College economists, Courtney Coile and Phillip B. Levine, suggests the effect is large,” the paper reports. “In a new working paper, they estimate 378,000 workers will be pushed into retirement as a result of the weak labor market – almost 50 percent more than will end up working longer because of stock-market losses.”
Our January issue features Greg Banner and Alex Matuk, two top advisors well-versed in exit planning. While their interview relates specifically to boomer business owners, it’s a timely reminder of the challenges you face with your clients as we head into 2010, and the incredible business-building opportunities that arise as a result.