There are many factors at this time that point to the fact that the idea of retirement will be coming to a close. One of the primary factors is mainly demographic in nature. Though the US still has replacement population above the current workforce, Europe and Japan are already seeing there replacement workforce dipping below those who would seek retirement in the next few years. This will put a strain on their productivity and lower demands for consumer spending that has not been seen for over 600 years.
Eighty million baby boomers here in the US will be drawing down their pensions, retirement savings and passive investments over the next eight years, which will push the stock market into a longer term bearish trend. The US economy will be strained by this, Japan and European economies will take a severe beating.
What this means is that in order to offset most of the draw downs from retirement earnings and withdrawals on the social security system plus other governmental welfare supplemental transfers, they must raise the payment of full benefits of retirement to the age of 75.
Over the next 2-5 years there will be a continued flattening of most major corporations. Though we have seen the corporate flow of downsizing and rightsizing; that is not by any means over. The technology explosion will be showing up with major advancements in information and communications. This will lesson the need for middle managers and redundant workers. There will be ample jobs for redundant workers, as they will be absorbed by new business start ups. Middle managers however will have to be retrained with specialized skills in order to keep pace with the technology boom that will be unleashed over the next 2 years. There will be a need for managers to develop people skills in working with employees under their charge. The benefits of using more complex customized programming such as SAP will outweigh the cost of doing so.
The advancement of technology will be in the areas of computers, telecommunications, and the internet. Moore's law will keep working in the advent of the advancement of computers that will most likely be 5 times more powerful than what we have in the commercial market today. Along with that robotics that will start to replace more of the manual industrial jobs.
By 2025 most auto industries will be sent to the orient mainly China. The reason is with the projected demographics and its impact to the economy, the decline of average consumer spending, it would not be cost effective to build and sell automobiles here in the US, Europe or Japan.
Health industries will be getting more attention, for the aging population that will be working longer. Advancements in Gene therapies and stem cell research will also be giving these workers a better quality of life but at a price none the less. This will also boost positions in the health field inclusive of fitness, such as Personal Trainers and Aerobic Instructors.
Specialists in any field at this time will then be the one's to write their own ticket especially those involved in Computer Programming, Network Administration and Information Technologies.
Most management activities will lean toward decision models and knowledge management systems. This will create major middle management unemployment, in an economy that will have over 10 million jobs available for the right people with specialized skills. Most corporations will attempt to keep their best workers paying more and be willing to retrain them, than letting them go to retirement.
By 2009 the peak spending of most baby boomers will occur and along with that robotics or artificial intelligence will start to pick up the pace in replacing the factory workers on their manual labor. There will be a great economic boom during 2009. The NASDAQ will see incredible growth from 2010 to 2015 and should hit 6500. For those in retirement or going into retirement they should be watchful for good investment in the technologies industry during this period.
The population in developing countries will continue to grow. This will help balance on consumer spending during the decline of the peak consumption in the late 2015 to 2025 from most of the industrialized and wealthiest countries in the world. Most of the consumption will shift to the developing countries such as India, but Africa will still be in crisis.
Real wages per capita will continue to rise while profits will tend to decline. This marks the turn of lower wages for employees, to the expense of profits overall. Business will now be depending highly on their skilled labor, as replacement for retiring workers will be coming in through immigration from outside sources, which are more educated and experienced with new technologies.
Some sampling reflects those who do plan to retire do not have any savings at this time. Most Social Security benefits will not supplement sufficiently to cover the rising cost of living during retirement over the next 15 to 20 years. Most Gen X'ers will not be able to compete against the more experienced and skilled baby boomers.
Baby boomers looking at retirement do have some options. They can liquidate their homes in favor of smaller homes or apartment living. Cut down on travel and other expenses. I don't believe that after working 35 to 40 years that this option will be what one would want, but that is an option. Financial planning will also be helpful, yet with the retirement draw down by 2015 the returns may not be enough, and other supplemental actions will have to be taken in order to build a stable future income.
Real estate in 2015 will also receive more declines being that there will be less of a demand. Health care such as retirement communities will see some increase but not as much because cost for this special retirement housing and care, will also rise. Less consumer spending will lesson demand and supplies will be handled on order to fill basis.
Technology will take up the slack on the fill to order, in that machines will be set up to manufacture other machines. Let us say you order a computer, when the order is taken then it is merely inputted into a machine which will build it on site and process to shipping.
What this also means is that one will truly experience and enjoy the Golden Information Age. That rapid telecommunications, less manual labor, and more focused specialized areas will develop, giving everyone more of the good life, but it will come at the cost of your labor.
This pretty much changes everything. Should you want to still retire in your sixties, you will need to have a plan in place that will more than support you for at least another 20 years after retirement. This will most likely come as a shock to some but not to those who have looked forward into the future with realistic expectations.
Cost of living may level a bit, but will continue to rise. So if you are living at a cost of 40K now expect to spend 60k when you retire to just keep up with your current lifestyle.
There maybe arguments generated by "financial planners" but most of them are not seeing past today's statistics.
Just remember, the draw down from retirement plans will affect your returns, over the next eight years. The way to figure what you need to retire is simple. Take your current income plus your expenses and add 20%. If you have a lifestyle of 40K per year and your living expenses are 15K add them together (40K+15K) should be about 55K then multiply that by 20% (55K*.20) 55K + 11K = 66K is what you need to continue your current lifestyle over the next 10 to 20 years.
Life expectancy rate for men in the US is currently at 74.4 and for women in the US it is 79.8. (Measures from 2003) In either case the raise in retirement age is not for enjoyment of going into your golden years where you can do what you want. You will either be restricted in movement by economics or health. Health technologies will extend life expectancy over the next 5-10 years to as much as 15 more years on top of that. Which means that you most likely be broke before you expire.
Now is a good time to start looking at other sources of income that will more than supplement social security. Remember, that congress is also looking at cutting off your social security benefits if your pension or 401k yields more than 70K a year. Your retirement lifestyle is at risk.
The good news is that the internet which has a global reach; will also experience a boom over the next few years, taking those who have already established businesses into a whole new vista of possibilities the likes which no one has seen before. This is the scope of the future, those off the information highway, will suffer due to their own ignorance, and not because this information is not available.
Should anyone doubt these trends, you can research them through many agencies, such as Labor Statistics, Census Bureaus and recent breakthroughs in Stem Cell research.
"Life is expensive. There is another way to live, that doesn't cost as much, but it isn't any good." Spanish Distillers
John Tebar Life Coach, Business Consultant, Entrepreneur, Author.
Contact at holisticlifeplanningandresearch.com holisticlifeplanningandresearch.com
Call 661-718-2142
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