Not so long ago, Michael Blattman lived in the upscale Washington, D.C., suburb of Potomac, Md., earning $225,000 a year as senior vice president for a student loan company. As he reached his 50s, it never really occurred to him that his job wouldn’t last forever.
“To be perfectly honest, I didn’t really go there,” he said. “Yeah, there was always a risk. Everything in business is a risk.”
In January 2008, Blattman, along with 500 other employees, was laid off by his company. With an $188,000 severance, he wasn’t worried at first.
“The barometer was always something like five or six months until you landed something comparable,” he said. “So I figured, ‘Oh, OK, six months?’ OK, I could do this for six months. And find the next one. Well, there was no next one.”
As his generation confronted an economic storm of historic proportions, Blattman found himself humbled — and living in a one-room apartment. After applying for 600 openings and getting only three interviews, he was still looking after two years.
His old boss recently gave him a stark assessment of his prospects.
“He said, ‘How’s it going?’” Blattman recalled. “I said, ‘Nobody’s talking to me.’ And he says ‘That’s because you’re an old white guy.’ And that stopped me in my tracks.”
Blattman gets some solace from the knowledge that he’s far from alone. More than 4 million baby boomers are unemployed, according to the Bureau of Labor Statistics. For many, retirement at 65 is no longer an option.
Facing shrinking nest eggs and mounting bills, they need to work, but they wonder if anyone will hire them again.
“The hardest thing each day is to get up and say, ‘OK, what am I going to do today?’ It’s a constant cheerleading effort every day. The thing is, I’m the cheerleader. And I am the team. So I’m all in one.”
Blattman starts every day checking out online job sites and sending out resumes for jobs that pay much less than his old salary.
“I have applied for jobs that are one-fourth, one-third of my previous income level,” he said. “And I would have been thrilled to get it. There are just too many of me and everyone else out there. I just wish there was a place for us, to kind of land.”
All the want, the wishing, can lead to worry and to stress.
“People who are in this position can have heart attacks, could get strokes, because of the intense stress levels,” said Blattman.
For Blattman, the chronic stress has induced him to grind his teeth, which has led to several root canals, damaged his implants, and worn away his bank balance. When his health insurance expired in August, he was left with $13,000 in out-of-pocket expenses.
It’s a double whammy: no job and no health insurance. Many boomers are in far worse shape than Blattman. Some have turned to free clinics. It’s just one indication that the health care crisis is really an economic crisis. And for the boomers it’s only going to get tougher, according to Harvard financial historian Niall Ferguson.
“If they’ve done their homework, then they’ll be afraid,” he said. “Very afraid.”
Ferguson says it won’t be easy to care for a generation with ailing bodies and many more years to live.
“The baby boomers have set us on a path towards a massive fiscal crisis,” he said. “Which is going to hit as the baby boomers retire.”
The recession, though devastating, will pass. But rising health care costs as boomers age may bring lasting harm to this generation’s financial well-being. By the time all boomers are 65, the senior population will have grown from 40 million now to about 72 million. Who will pay their medical bills?
“This thing is going to blow up,” said Ferguson, “because A: The number of retirees is about to zoom upwards just the way the number of teenagers once zoomed upwards in the ’50s, ’60s and ’70s; and B: Because the costs of these systems are completely out of control.”
The strain that the burden of caring for aging boomers will put on the health care system could overwhelm the economy.
If current trends continue, in 20 years almost a third of everything we spend on goods and services will be spent on medical care.
“The cost of health care for the elderly has been explosive,” said Ferguson. “And that is the crisis which seems to be the really big crisis lying ahead of us. We simply don’t have an answer as a society to the problem of a very large number of relatively unhealthy people who live into their 80s.”
Blattman and other boomers have woken up to a new reality. Their long-cherished belief that their lives would inevitably improve over time may no longer be true. It’s a cautionary tale for future generations.
“Never assume things will be better tomorrow than they are today,” he said. “It doesn’t mean you’re going to be worse off. Just don’t take things for granted and enjoy what you have.”
But he hasn’t given up hope. “Never,” he said.