Chris Farrell, author of
Q: What are your thoughts when you hear the words, “America – and Canada – can’t afford to grow old?”
A: I’ve been hearing that one for a long time. There’s fear and loathing about aging in America. Older workers are not considered creative or innovative. They’re reliable. So the new normal is going to be a slow-growth economy. If you have too many older workers being supported by too few younger workers, you have a stagnant economy and that makes it harder to pay the social security bill. It becomes a downward spiral. There’s even less creativity and innovation.
But is that true?
Well, my book is saying that it’s nonsense. It doesn’t have to be that way.
Right. In your book you mention we’ve all been sold a bill of goods over the past few decades about how retirement planning should focus on investments. Instead, you’re making the case that we need to look at jobs and employment.
It’s about jobs. Saving is important, but here’s the real key: An aging person’s most valuable asset is their network. These are the people who know you. The network allows you to avoid the whole age discrimination problem, which is real. If you’re 58 years old and looking for a job, your network knows who you are. The fact that you’re 58 is irrelevant.
Say you make a yearly $10,000 part-time income in retirement. That’s the equivalent of a 4-per-cent withdrawal on a $250,000 portfolio. We underestimate how much more money we have when we work a few extra years.
Working past 65
Chris Farrell, author of Unretirement: How Baby Boomers are Changing the Way We Think About Work, Community, and the Good Life (Bloomsbury Press, 2014)
I do think the financial services industry – without arguing complete conspiracy – has a self-interest in stoking a lot of fear out there. The investment decisions you’re making today are going to determine if you’re going to live on the beach or in a trailer. That’s the tone.
Are we heading into a long and difficult transition into unretirement?
There’s been an evolution, but far too much of it has been a grassroots movement. We don’t have enough on and off ramps that are institutionalized.
But let’s say you work at Intel and are close to retirement. You would have the option of applying for an encore fellowship. It’s part of the retirement package, a service that matches you with a non-profit organization looking for your set of skills. Intel subsidizes the transition. I can come up with all kinds of interesting examples of what companies are doing, but are you lucky enough to work at one of those companies?
You talk a lot about the satisfaction of working. Do some people simply want to work longer?
So much of work is social. Your vendors, your suppliers, your colleagues. A lot of us like the social aspect and using our knowledge and experience. It doesn’t matter if it’s a blue-collar, pink-collar or white-collar job. People don’t want to work full-time later in life, though. There’s a search for flexibility and part-time hours. Or it might be about taking skills to a different sector of the economy.
One of the things we underestimate is how creative people are. It’s just amazing how people construct a lifestyle for themselves. There was a guy I talked to who drives a limo, taking people to the airport. To me, this is the worst job in the world because I don’t like driving. But he likes driving and talking to people. With this new career, he can call up the office and say, “I’m taking three weeks to go visit the grandkids.” There’s no penalty. Then he calls in to say he’s back. He is making an income and working the hours he wants.
Just last night I was talking to a 17-year-old about summer jobs. She said, ‘I have a better chance of getting into Harvard than getting a job at McDonalds.’ At first I thought she was kidding. But she wasn’t. She was angry with the retirees taking over these jobs. What happens to young people if we all keep working?
The data is pretty convincing that when older workers aren’t getting jobs, younger workers aren’t either. We’re all in this together. Often it just has to do with the business cycle in an industry. Once you adjust for the business cycle, the pie grows.
In 1979, there was the famous lawsuit at Newsweek magazine. Women weren’t allowed to be editors and they couldn’t write articles. At the time there were all these articles in the op-ed pages that said, if you have all these career women, there won’t be any jobs for men. But that’s not what happened. Instead, the pie grew. It’s not a zero-sum game.
What should retirement planning look like now? What should we be doing?
The basics of retirement planning don’t change. Yes, you should have savings and if you’re reaching the retirement age, you should be paying off your mortgage or have a good rental situation. Then, at five years out from retirement, start asking your questions. What do I want? It’s a vital conversation, but most people don’t know what being useful looks like. That’s why I recommend tapping into your network and asking your friends, “What am I good at? What should I do next?” If you’re passionate about something, can you turn that into something you do during your retirement years?
Over four or five years, you can get a sense of what you have to do to get there. Maybe you have to pick up a certificate or take a course so you feel comfortable making this transition.
So, Chris, how old are you?
What will your unretirement look like?
(Laughs) I walk away from people I’m interviewing thinking, “That’s really interesting what they’re doing with their unretirement. Shouldn’t I be doing that?” Then a day later it’s, “Nah, I want to do journalism.” Being a masochist, I’ll be working on my next book. I’ll keep doing what I’m doing.