Redefining middle age

The ways that people envision and plan their lives start with concepts about the “natural” stages of life. These concepts change over time, though. As people live longer, new ideas are emerging about how to characterize mid-life in developed economies. More people are thinking in terms of a new stage of life, the second middle age. This is the period when children are largely autonomous and when many people are trying to chart the course for the next two to three decades. Ideas about work and middle age are evolving in fascinating ways. The old concept of middle-aged empty-nest workers coasting towards retirement is not very relevant.

On election day of 2020, Donald Trump will be 74 years old. Bernie Sanders will be 79, Joe Biden will be 77, Elizabeth Warren will be 71, and Jay Inslee will be 69. This is emblematic of the ways that concepts of life stages are changing. When Ronald Reagan was sworn into office as president in 1981, he was 69, and he was the oldest person to become president. By today’s standards, he would be considered relatively young. Politics is not the only place that people are working and thriving until later ages. Ten percent of the CEOs of S&P500 companies are 65 or older. Warren Buffett, at 88, is the oldest. None of this is to suggest that people should work until these ages, but the point is that many people are remaining vital and effective until ages far beyond the “traditional” retirement age.

We need to re-conceptualize middle age for a variety of reasons, and several of these pertain to economics and finance:

  1. More people want or need to work until later ages
  2. Many will want or need to re-train and update skills and knowledge
  3. Flexibility of work becomes a higher priority

The percentage of American workers in the 55+ age brackets is increasing rapidly. By 2024, almost 25% of the U.S. labor force will be 55 or older, as compared to 12% being in this age group in 1994. The Department of Labor attributes this trend to a number of factors other than the overall aging of the population. Retirement is an expensive proposition, especially as lifespans increase. In addition, as people have children later in life, more people who are 55+ are still supporting their children, either at home or in college. Older parents often need to stay in workforce for longer to help their kids through college.

As the The 100-Year Life points out, people who have not continuously updated their skills are likely to want or need more education at some point in mid-life. The base of knowledge that you build in your twenties is likely to look fairly outdated in your fifties. Even for those who don’t need to go back to school, many want to change directions anyway. If you have done the same thing for 30 years, you may need a change. Being able to take the time and pay the costs of building your human capital requires advance preparation and planning.

A wide range of studies find that older workers place a premium on flexibility. Many worker’s first choice is to continue to work part-time rather than leaving their jobs entirely. As it happens, workers of all ages report that they put a premium on flexibility. Workplaces that offer a range of options for how people work are going have a substantial edge in the future. In many ways, the emerging economy is especially well-suited to older workers who can offer their expertise on the expert end of the gig economy as consultants.

The second middle age has exciting possibilities but, for many, some harsh realities. We can expect to see many people who focus their interests on a range of new endeavors, both related to their expertise and going far afield. In the wealthier cohorts, this might mean that people can pursue their passion projects without worrying about how much money they earn. For others, the second middle age might be about updating skills and changing direction as a way to either make work more interesting, stay abreast of workplace trends, or both. For those who have low savings, have substantial debt, or who have out-dated skills, the second middle age will need to focus on long-term employ-ability.

For younger people, the evolution and extension of middle age suggests the need to anticipate longer periods of unemployment and making preparations to take sabbatical-like periods to re-train. Anticipating taking time to recharge and learn new things is exciting if you are prepared but may be incredibly daunting if you are not. Being able to make effective use of periods without paid work necessitates having liquid assets to cover lost wages.