In 2020 I’ll be 72 years old. Retired? Perhaps? The question is how will our social and financial system handle aging baby boomers like me? Many of the forecasts are quite scary. Harry Dent in his interesting (but in many ways flawed) book entitled The Roaring 2000s (Simon & Schuster, 1998) predicts a continuation of the American economic boom until baby boomers start to retire. He sees an economic collapse beginning around 2009. Scary stuff indeed if you’re my age.

Peter Drucker in his recent book, Management Challenges of the 21st Century (Harper Business, 1999) foresees things a bit differently. I quote from his page 46: “Within the next twenty or thirty years the retirement age in all developed countries will have to move up to around seventy-nine or so – seventy-nine being the age that, in terms of both life and health expectancies, corresponds to the age sixty-five in 1936, when the United States, the last Western country to do so, adopted a national retirement plan (Social Security).”

It will certainly be interesting to see who’s right. But, as I said back in 1997, I’m not so concerned. One of the nice consequences of this retirement baby-boomer bomb will be a new wave of 3 Generation Households.

3 Generation Households are when grandparents live with their grandkids -- as they have throughout world history, and as they do in most other cultures to this day. Only in the last part of the 20^th Century in super-mobile and super-affluent America have grandparents been so far from their grandkids. Many economists praise the high mobility of the American labor force as a key international competitive advantage. However, none of those economists calculate into their equations the high costs of separating the generations.

These costs are of two kinds – financial and psychological. One of the big problems of the retirement system in America is the inefficiency of retirement homes – and we’re talking not only about dollar and cents here. We’re also talking about the quality of care.

Indeed, the psychological costs of living without grandparents are substantial. Mary Pipher in her excellent book Another Country (Riverhead Books, 1999) presents the case best. To briefly summarize: When they’re at work, parents worry about what their kids are up to at home. Parents also worry about the grandparents’ health and safety. Kids lose a sense of values that only their grandparents have time to communicate. Grandparents are tragically lonely.

The AARP is already studying these issues. The key is 3 Generation Housing. The AARP reports and ongoing work are quite useful – for example, I recommend the AARP booklet, Intergenerational Shared Site Project, A Study of Co-located Programs and Services for Children, Youth and Older Adults (www.aarp.org), as a place to start looking for more information on this issue. http://www.ahdc.com/hgv.html is worth a brief visit to see how new construction can favor intergenerational housing.

In the short run (the next decade) Social Security must be maintained at current support levels including cost of living adjustments. I would also be supportive of modest increases in Medicare subscription drug allocations, particularly if funded by savings in other areas (for example, we now spend about $17 billion/year on illegal drug interdiction efforts of dubious efficacy).

For the longer run, for us baby boomers, we really have to depend on medical and care for the elderly costs being reduced via medical advances and other programs like 3 Generation Housing. Investments need to be made now to mitigate the retirement problems looming on the horizon for 2020.

Only in the last part of the 20^th Century in super-mobile and super-affluent America have grandparents been so far from their grandkids. Many economists praise the high mobility of the American labor force as a key international competitive advantage. However, none of those economists calculate into their equations the high costs of separating the generations.