The "New" Retirement

Moondance

Since most people over 50, but under retirement age, have lost seen the value of their 401K drop drastically, most of them won't be able to retire at all. Self employment will probably be their only options.

This isn't good news for them, but might be great news for the business sector.

Hiring a freelancer or self employed contractor saves tons of employee expenses for companies because there are no worker's comp insurance concerns, no payroll taxes to process, no need to worry about benefits, and year of experience trump some of the problems faced when hiring younger workers. No need to worry about staffing for family leave associated with the birth of a new child, either.

Sounds great, but could be bad news for college graduates over the next 5 to 20 years. A company can pay a contractor more in cash, and still save money on the peripherals.

With all of this in mind, is it really wise for younger people to work toward a specialized degree, or should the go for a general BA and build their experience in many fields to off set the likelihood that they may also have to face being self employed, due to market pressures?

Daydreamer

I would go for the really general diploma, then learn specific skills while working.

The job market changes so fast, these days that you need to be more flexible than in the past.

katharina

Good post... it makes me wonder how many people are actively trying to rebuild those retirement funds up again, or at least finding ways to help what little nest egg they may have.

Granted it's very difficult in a bad economy, but I've read some great articles about how people are trying to take the bull by the horns and get a little more control of things they *can* control.

alaine

That's unfortunate I guess it doesn't matter then that I haven't started my 401K, yet. I really think that with all the dishonesty with large corporations we're going to start seeing more small businesses. In these times of unemployment, people are going to start figuring out how to work for themselves. The economy probably would be more stable if we didn't really on just a few businesses to carry it.

Daydreamer

This the "blessing in disguise" that folks refer to!

I think many baby boomers are getting themselves set to have small businesses ready to go when the economy recovers.

I don't think it will be the same as it was before, though.

katharina

Good thoughts here, Daydreamer. In what ways do you think it will be
different if this is the way it happens?

Twiceshy

I wonder if employers will start choosing freelancers and contractors of recent graduates as well.

The prospect of having an experienced worker with fewer benefits needs might tip the balance.

Freelancers all over the place should be getting their advertising together, to take advantage of the current economic crises!

heretoday

I believe that this will set the stage for a new rebirth of entrepreneurship that will rival anything else we've ever seen. I hope I'm not just being an optimist, but considering the digital tools available to millions of clever mature folks, I think we're going to emerge from the recession with wonderful ideas and thousands of new small businesses.

Laughingmouse

I really feel sorry for college grads who, thinking they could make tons of money, got MBA's.

I hope they also took some classes that built some hands on skills, like auto repair.

Twiceshy

Maybe we will see a renewed appreciation for those who work with their hands.

Lately, these people were looked down on and people have taught their kids that they need to avoid good honest work.

We can only hope.

heretoday

Perhaps it is largely a matter of acting with confidence by taking chances with ideas. While many over-50s have seen their retirement funds eroded, I don't think that they'll be content to simply lower their expectations. I think they'll find clever and resourceful ways to continue to generate income after they "retire".

katharina

Well I have to say that if you're being overly optimistic, it's surely the best thing to be that way about! I'd like to think that enough people are going to want to "fight back" and prevent another 1929.

chocoguy

It would only be bad for the newly graduates if they are not going to persevere on finding some freelance work. There are lots of freelance works that you could get a living if you are industrious.

SageMother

Do you think it will be easy for new grads to set aside their expectations to create their own freelance businesses?

I have a feeling that might be a huge leap for those who completed their degrees based on the idea tht a corporation would provide them with a good income and benefits.

katharina

How wonderful that would be if you're right! As soon as people STOP trying to be resourceful, I think there will be even more problems.

Wonder if tomorrow's tea party will work? Worked at Boston. Now *that* is a resourceful way to stop new taxes! Stolen from the Colonials, but resourceful all the same.