As Vermont Baby Boomers Start To Retire, How Will The State's Economy Fare?
The baby boom generation is rewriting the rules around aging, and the direction they take during retirement will have profound effects on the state’s economy.
Vermont will become the oldest state in the nation in the next 20 years, and almost 25 percent of the state will be older than 65 by the year 2035. Because those boomers are approaching retirement differently than previous generations, the state's economy could be in for a shake up.
Vermont's not alone: The large number of baby boomers who are heading into retirement will affect the economies in every state in the country.
But due to the state's low birthrate, the boomers will not be offset by a surge of young people growing up to take jobs. Plus, our population has remained pretty stagnant, with young people both leaving and moving in at similar rates.
"We're not alone in this, but we may more affected by it than other states," says, Joyce Manchester, senior economist at the Vermont Joint Fiscal Office.
Manchester helped write a report that was released this year on the state's tax system.
She says even with more seniors working, there will be a change in their spending patterns and she says lawmakers should get ready for a likely steady drop in state revenue.
"As the big bulge of baby boomers moves out of their working years they won't be paying as much in income taxes," says Manchester. "They might downsize their housing so they're not paying as much in property taxes. They're probably consuming less, so that may mean less sales taxes coming into Vermont."
"We're not alone in this, but we may more affected by it than other states." — Joyce Manchester, Vermont Joint Fiscal Office
"So, it's important for everyone to be aware of the coming change," Manchester says, "so that we can anticipate what might happen to the state budget."
As the boomers are moving out of their highest earning years, but they’ll also probably work more than previous generations — into their 70s and beyond.
Robert Oeser retired from the New York Department of Corrections about 10 years ago, and after he moved to Vermont he started working part time at a discount grocery store in Brattleboro.
Oeser is 65 and he says the extra cash makes it easier to help out his son with his bills.
"I'm sort of happy that I have a way of getting some extra money so that it takes a little bit of the crunch off, in terms of what needs to be done, and what needs to be paid," Oeser says."I thought that maybe that was unique to me, but I found out that a lot of people are doing that."
"I'm sort of happy that I have a way of getting some extra money so that it takes a little bit of the crunch off, in terms of what needs to be done, and what needs to be paid." — Robert Oeser
"People are working longer because jobs are a lot easier than they used to be 50 years ago, and they're not as physically demanding," explains University of Vermont economics professor Art Woolf. "People are also healthier, and they're living longer. So we'll probably be seeing more people over 65 that are in the labor force. They might not be working full time, but they will probably be doing some sort of work."
Dick Stewart is one of those boomers.
Stewart is one of the founders of Chroma Technology, a high tech firm in Rockingham.
Stewart decided to retire early at the age of 55, but it didn't last long.
"I caught up on a lot of reading, and did a lot of walking in the woods," Stewart says. "But I was also looking for the next thing, and wondering what was next. It was not as fulfilling as I thought."
So just before he turned 60, Stewart came back to work. He's got less responsibility now, but he's working full time — and says he'll probably keep at it until at least 70.
"[Retirement] was not as fulfilling as I thought." — Dick Stewart
Stewart says he's pretty hopeful about how Vermont will weather these economic trends — and he thinks people will continue to come here for the same reasons he did back in the 1970s.
"I have faith in the human drive, and in the attractiveness of life in the state," he says. "And I really have faith in the younger people I've met. I think we older folks will continue to pass on our knowledge of whatever it is that we're involved in to younger generations. And those that make their own opportunities here, I think, will be successful."
Aging Well is an ongoing special series from VPR exploring how the baby boom generation is viewing retirement and changing the future makeup of Vermont.