I was reading the paper recently when I happened upon a review of the book, Unretirement (Bloomsbury Press, 2014) by Chris Farrell. The premise of the book is that boomers have changed every stage of life they have passed through, and they are set to change retirement as well. No longer will workers rejoice when they reach age 65 and immediately hit the road to Florida.

Instead, the huge generation of boomers will look around and realize they are bored, healthy, well-educated and unable to afford traditional retirement. This will lead many if not most of them to seek out something — anything! — that they can do to provide meaning for their lives as well as income.

His suggestion — don’t wait. Plan today for your “unretirement,” the point in life where you can reinvent yourself, either full-time or part-time. In addition to keeping you active and involved with interpersonal relationships, still working in some capacity will provide substantially more financial benefits than any sort of savings or investment plan.

The reason is that while you work, you’re not drawing money from your savings and you’re marching closer to the day when you can draw 100% of your Social Security benefits. It’s a two-for-one great deal!

Farrell points out that more boomers are working during traditional retirement age today and the trend should only grow. In addition to benefiting the workers, this also bodes well for employers, who are watching decades of education and expense walk out the door.

But there’s another side to this story, and it starts with the same people — retirees and those nearing retirement…

It’s true that the percentage of people 65 and over in the workforce has increased in recent years, and the number has moved up from 12% in 1990 to 16% in 2010 and 18% today. That’s a big increase, but it still means that 82% of people 65 and over are not in the workforce. Even if another 10% of boomers stay on the job, the number would only reach 28%, with 72% kicking the time clock goodbye.

Farrell believes that roughly two-thirds of retirees will be able to make it on their savings, which seems odd. The 2013 Survey of Consumer Finances from the Federal Reserve shows the median net worth of people 65 to 74 is $232,000, including $88,000 of equity in their primary residence. It’s difficult to see how two-thirds of retirees will be just fine when the median person 65 to 74 years old has roughly just $145,000 outside of his home.

Keep in mind that this means half of everyone in that age group has less.

For Mr. Farrell, the real worry is about the one-third of retirees that have little savings and are counting on Social Security for the bulk of their retirement income. Given that the typical benefit today is $1,290 per month, it won’t go very far in covering housing, transportation, food, and medicine, much less travel and leisure.

But to say most everyone should and will simply work longer to alleviate this pressure glosses over a lot of facts. The people most able to continue working at their chosen pace are the same people who are already comfortable — top-level executives and entrepreneurs. The farther down the pay scale you go, the less likely an employee is to have any power to set his or her own schedule. The choice is to work, or not.

Then there is the whole question of what would happen if boomers did choose to stay in their jobs — or get new ones — en masse? Millions of job openings that would have been taken by gen-x’ers, which would make room for the emerging millennial generation to enter the workforce, would never become available. This would keep the young, emerging generation from getting a leg up on the corporate ladder, which would delay them even further in terms of ramping up their consumer spending.

Would we rather encourage boomers to stay in their jobs so that they can stash more cash and feel comfortable in retirement? Or make room for millennials to join the workforce in quality jobs so that they can go about getting married, having kids, and spending with abandon? The answer to the question is up for debate but in the end is probably moot.

While it might be much better for boomers to keep punching in for a few years after 65, most of them won’t do it. And of those that do, most are probably self-employed people that have the least financial need.
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Rodney Johnson
Rodney works closely with Harry to study the purchasing power of people as they move through predictable stages of life, how that purchasing power drives our economy and how readers can use this information to invest successfully in the markets. Each month Rodney Johnson works with Harry Dent to uncover the next profitable investment based on demographic and cyclical trends in their flagship newsletter Boom & Bust. Rodney began his career in financial services on Wall Street in the 1980s with Thomson McKinnon and then Prudential Securities. He started working on projects with Harry in the mid-1990s. Along with Boom & Bust, Rodney is also the executive editor of our new service, Fortune Hunter and our Dent Cornerstone Portfolio.