Two bits of news came out in the past week that should have
you thinking about changes in your business. The first bit of information came
from the 2010 U.S. Census Report. There are 308 million people living in the
United States. The second piece of information is that the baby boomers are
beginning to turn 65 in 2011.
Now let’s break these two news bites down. First, the census
shows that we have grown in population by 9.7%, which is the lowest rate of
growth since the Great Depression. In contrast, the greatest rate of growth
happened in the years of post WWII (1946-1965) – the Baby Boom years. We have
waited in anticipation for the baby boomers to retire en masse. Some of that
has already happened with the downturn in the economy and Boomers being forced
out of their jobs or opting out for early retirement. But 2011 marks the
traditional scheduled date for retirement. In the next 19 years, 69.4 million
Boomers will retire (10,000 per day.) That is over 22% of the current population.
Put aside the Boomers’ oddities (they gave us everything from tripped-out
hippies living off of peace, love and organic vegetation to record Wall Street
profits, muscle cars to mopeds, pet rocks to computer chips), there is a lot of
knowledge leaving the workplace with few people coming behind to fill in. This
is the first dynamic that should have you looking at your business. How do you
replace the know-how that is retiring?
Here is the second thing you should notice about the news.
Boomers were betting on two things being in place when they retired: their
house would be worth more than they paid for it and their employer’s funded
retirement account would be at its zenith in assets the day they punched the
time clock for the last time. What they did not anticipate was the fact that
the economy would be the worst it has been in their lifetime. They have built
retirement wealth in home equity and Wall Street profits, only to see it all go
away in the past two years. And there is not a lot of encouraging signs that it
will get better in the next couple of years. This will cause many Boomers to
find a way to keep working. However, they will not be able to keep working
their current job and keep all of their Social Security benefits. The full
retirement age for drawing Social Security benefits without a penalty for going
over meager earning limits is being raised from 65 to 67 during the next few
years. This should be the other thing that you should take note of in your
business planning for 2011. The Boomers putting off their retirement past the
age of 65 will have to find a new job with a reduction in hours to collect all
of their Social Security benefits.
Here comes 2011 dragging a lot of changes to our workforce
along with it. How can you take advantage of these changes? For one, realize
that your business might benefit from the insight of a smart boomer. Putting a
senior citizen on your staff to teach your youngsters a thing or two may be the
best hire you could make in the coming year. You can pay this person on a
consulting basis, so it does not contribute to a larger payroll tax burden.
This gives the Boomer the flexibility to remain a contributing member of the
work force, but gives them some freedom in setting their own schedule. Realize
also that there will be plenty of Boomers who, after getting stiffed by a
corporate job that either cut them loose or are shedding benefits, will try to
make one last run at starting their own business. You may be able to outsource
some of your traditional in-house work to them. Expect small business start-ups
with Boomers to increase significantly in 2011 over 2010. Before you hire new
staff members, you may want to check out what is happening on the small
business scene. Outsourcing may become the new norm for the next couple of
decades if this trend remains. 2011 will begin a test of a new business
environment where aging workers with the knowledge of how business runs are
looking for a place to work that fits their part time needs. A good business
plan will anticipate this change to the way we do business.
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Census Winners and Losers, Newsy.com. December 22, 2010
Will My Retirement Job Affect My Social Security?
by Robert Skladany, retirementjobs.com
Original photo by Jim Hughes