I just finished reading “The New Retirement” by Dr. Sherry Cooper (1998) in its entirety. Sherry Cooper (a baby boomer) is a senior economist with the Bank of Montreal. Now reading books by economists, actuaries and financial planners is generally not for the faint of heart and this book does not disappoint. Don’t get me wrong, there was lots of good information and things to think about but it does read more like an economics textbook than it needed to.
In this two part post, I will give you my shorter summary for many of the subjects covered in this book along with my own spin and a few extras to boot.
The baby boomers (those people born from 1946 to 1966 in Canada) are now rapidly approaching retirement years. The impact of this demographic bulge is studied from a mostly Canadian and US perspective. Because the boomers represent such a large segment of the population and because it’s occurring at a time in history where everything is rapidly changing, this cohort (demographic segment) is having a larger impact than many prior generations. However, we should remember that this book and indeed the boomer perspective is that of a generation looking inwards at itself. Most members of a generation consider themselves to be both more important and different from their parents.
The boomers as a group are actually split into the early boomers (born 1946 to 1954) and late boomers (born 1955 to 1966). The early and late boomers actually had quite different experiences in childhood and the workplace. Early boomers generally had more abundance as they got there first and before the major crowding (school, post secondary education, careers, etc.) that the late boomers faced. I can personally attest to that as I was born in 1965 and don’t really feel part of the boomer generation.
Due to vaccinations, better sources of food and other advances in medicine, people are living longer these days. More accurately, those with the means to afford medical coverage and better food are living longer. There is a substantial gap (especially in the US) between the haves and have-nots. At the same time there is a significant decrease in the fertility rate in Canada and most developed countries (well below replacement rates). Even with significant increases in immigration rates in the last few years, the population is still aging and there will be fewer people in the workforce as a ratio to those retired. This is going to have a significant impact on overall productivity and output. Since the economies of the western world are largely built around constant growth there are some issues around how domestic output will keep increasing with significantly fewer workers. This is in sharp contrast to developing nations where a younger workforce is in abundance.
There is a disturbing trend toward obesity and sedentary lifestyles in North America. This will have a downward pressure on longevity and significant upward pressure on the cost of medical services. This is driven by the food industry and consumers as high sugar, high fat and high salt content sells. At the same time, there is also a "wellness boom" where organic foods, alternative medicines/treatments, and holistic fitness are growing. There is also an expanding gap between the have (education and wealth) and have-nots. Simply put, healthy foods and lifestyles can cost more.