Going long | Retirement may become elusive for baby boomers
- July 29, 2009
Norm Hatfield is a survivor. “I thought if I worked hard and did the right thing, the company would take care of me,” he ruefully recalls. “I kind of have had a naïve attitude.”
Hatfield, 69, worked as an independent distributor for a medical supply company for 25 years. But more than a decade ago, the company suddenly cut him loose. “It was like a bullet to the head,” says the Chesterfield County resident.
Hatfield’s sense of self-worth — and some of his net worth — evaporated. “I went through three years of clinical depression” after the layoff, he confides. It didn’t help matters that he was in his late 50s at the time — not a great age to be applying for a job.
With help from his wife, family and friends, Hatfield climbed out of his valley of self-doubt and was rehired by his old company in 2005 selling orthopedic devices.
Then came the recession. In November, the company again severed ties with him. This time around, though, the 6-foot-4-inch, 290-pound salesman worked with a career counselor and became a management consultant with a venture capital company. Hatfield has maintained a positive attitude, although he still has to draw on savings to pay some bills.
This survivor’s advice? “Start saving early,” Hatfield says, because “you’ve got to be dependent on yourself. You can’t be dependent on others.”
Lost jobs and depleted funds
Across Virginia, there are countless other Norm Hatfields. They are mature professionals buffeted by the twin forces of lost jobs and depleted retirement funds. More than 100,000 Virginia jobs have disappeared since the start of 2008, and the stock market has lost about a third of its value in the past 12 months.
These blows have only reinforced the inclination of baby boomers (born 1946 to 1964) to delay full retirement beyond 65 — a trend that was emerging even before the recession. Now among adults 50 to 64 who are employed full time, more than half — 52 percent — say they’ve thought about delaying retirement, the Pew Research Center reports.
The idea of postponing retirement stems from a growing awareness that most of us will live longer, says Matt Thornhill, president of The Boomer Project, a Richmond firm that conducts extensive research on baby boomers. The average U.S. lifespan reached 75 years in 2000, almost double the lifespan of 100 years before.
Boomers’ thinking goes something like this, Thornhill explains: “I spent a third of my life getting trained and educated, a third doing my job, and now you expect me to spend a third of my life not doing it?” With middle age now stretching from 50 to beyond 70, according to some researchers, “We are experiencing generationally, and economically, a retirement shift,” he says.
Thornhill’s advice to financial planners is simple: “Don’t even use ‘the R word.’ … Retirement is going to become like a buggy whip salesman.”
More boomers are focusing on what The Eagles, a rock band from their youth, called “The Long Run” — whether it’s making career plans or restructuring a financial portfolio. “Almost without exception, the boomers I’m talking to say that retirement at 65 may have been the plan before, but it isn’t now,” says Bud Whitehouse, director of client services at Career Management of Virginia in Richmond.
Career coach Whitehouse, 63, includes himself in this retirement-averse group. “My exit strategy is to be carried out feet first, because I love what I do.”
Boomers’ long-range attitude should apply to money matters as well. That’s the advice of Nicholas Yrizzary, a wealth management adviser in Reston. “We can’t control the weather, and we can’t control the market, so to worry about something we have no control over is absolutely ludicrous,” says Yrizzary. “The goal, then, is to help folks control what they can control.”
One client recently realized he could do without a 5,000-square-foot house. He moved into a condo — a downsizing that helped offset some investment losses. Other clients are finding creative ways to apply Einstein’s maxim, quoted by Yrizzary: “In the middle of difficulty lies opportunity.”
So, for example, at a time when stocks are trading at low prices, Yrizzary says, “Let’s take advantage of this” as a buying opportunity. “Folks who pull out and put their money in money markets are doomed to fail if they’re looking for short-term security.”
Kelly Campbell, a wealth management adviser in Fairfax, also has been busy soothing the frayed nerves of boomer clients. In times like these, he says, inaction isn’t a good option — for clients’ peace of mind or for their bottom line. “Reposition your portfolio to take advantage of the market,” Campbell advises. “We have a motto — ‘advance and protect.’ Advancing means to take advantage of the market, and protecting means use some asset classes” that help protect the value of a portfolio should the market take another dive.
“These asset classes [such as managed futures] may scare you away, but they are pieces that should be in everyone’s portfolio … to protect you on the downside,” he says.
For his part, Norm Hatfield isn’t afraid of the stock market or the job market. The former University of Maryland tackle is ready to get back in the game. “Joe Paterno is still working, and he’s 81 years old,” Hatfield notes. “I may want to be the Joe Paterno of orthopedics.”