Creating a stage between middle and old age

The oldest baby boomers start turning 65 this month. For the next two decades, roughly 10,000 Americans will be getting their Medicare cards in the mail every month.

The largest generation's symbolic milepost has sparked predictable newspaper feature stories and polls about how boomers are feeling about the big 6-5. Take your pick among the findings -- boomers are satisfied with their lives (AARP), or they're glum and pessimistic about the future (Pew Research Center).

Why is 65 our official senior moment? Mainly because it was adopted as the official retirement age when Social Security was created in the 1930s under Franklin Delano Roosevelt. But rising longevity has reduced the relevance of 65 as a symbol of old age. So has the boomer desire to rebel against stereotypes at each stage of their lives.

If the largest generation in American history can look forward to a couple more decades of usefulness and engagement, what will they do with those years? I posed this question recently to Marc Freedman, one of the country's leading thinkers and writers on how Americans can redefine life after 50.

Freedman is the chief executive of Civic Ventures, a nonprofit that's leading the charge for the encore career movement -- the idea that older adults can blaze new career trails that can transform the country. His upcoming book, "The Big Shift" (PublicAffairs, April 2011), argues that we need to recognize and develop a new stage of life between midlife and true old age. He goes on to describe how this can best be done and the benefits that can be reaped.

Freedman advocates continued participation in the labor force by older people who need and want to keep working. Labor force participation generates economic growth, and can contribute to national deficit reduction. There's even evidence that working longer could extend the solvency of the Social Security Trust Fund, currently projected to be exhausted around 2035.

But don't count Freedman among those who argue for a mandated higher Social Security retirement age. He prefers the carrot to the stick.

"I think what we need to do is focus on those who voluntarily are going to work longer - not necessarily those who don't want to, but have to," he says. "Rather than try raise the retirement age or coerce someone who doesn't want to work longer, let's help those who are already determined to go in that direction get from aspiration to action."

Freedman urges creation of public policies and programs that can help with these critical life transitions. "Right now, the only transition we do a decent job on is the one young people make from adolescent to adulthood. At this later juncture, it's a do-it-yourself process - you're on your own.

"People are hungry for help with this. What we need are new pathways for people in their 50s, 60s and 70s. Let's meet them halfway with additional education, internships or service projects. Let's make it easier for this group to do what they want to do - and what we need them to do as a society."

Expect to hear more from Freedman on how to make these transitions easier when his book is published in the spring, but here are some of the key ideas:

Education
Our higher education system offers undergraduate training for 18-to-25-year-olds and lifelong learning for those who are over 70 and truly retired. "A school for the second half of life has not been developed yet," Freedman says. "It would be tailored for those who have another phase of their working lives yet to come."

Freedman sees community colleges as the best candidates for this new encore career pathway, since they already offer career training, affordable classes and are well-connected to local labor markets and employers.

Financing transitions
Freedman wants to rethink the way retirement assets are used by splitting savings into two buckets -- one for lifetime security and the other invested to produce income that can help pay for a midlife career transition.

Some people already are using 529 education accounts and Roth IRAs for this purpose, but Civic Ventures has been advocating creation of a new type of savings vehicle to support midlife education called an Individual Purpose Account (IPA). IPAs could incorporate valuable features such as tax credits, employer matches and loan options.

Volunteering as a pathway
The Serve America Act of 2009 funded a dramatic expansion of public service programs, and it envisioned national service "encore fellowships" to help people transition to public service in the nonprofit sector, but the fellowships haven't yet been funded.

Some corporations are adding encore career programs, and some community colleges are starting programs. Freedman still hopes the fellowship program will be funded and expanded.

Mark Miller's Retire Smart column is carried on Tribune Media Services.