It's time for a new American retirement dream

Get good grades in school, then go to college. Graduate, and get a good job with benefits. Get married, work hard, have kids, get promoted, buy a house and keep working your way up. Then retire, collect your pension and enjoy a 20-plus year vacation at the end of your life.

For most workers, this has been the classic American dream, but it has been slipping away for a few decades now as the economy and demographics have shifted. Of course, even in the past, this scenario usually applied only to those who were fortunate enough to work a full career at a company that offered good retirement and health benefits. That is, it applied to much less than half of working Americans.

So, as author Courtney Martin argues in a recent book, "The New Better Off: Reinventing the American Dream," Americans of all ages should redefine what it means to live a good life given these new economic and demographic realities.

Martin specifically targets millennials and Gen Xers with her messages, addressing how these generations are redefining work, home, marriage, child-rearing and community in response to their serious economic challenges. But baby boomers can also learn a lot from their adult children and younger relatives and friends because boomers face similar challenges.

The retirement part of the classic American dream was "not working," starting in your early- to mid-60s, and maintaining your preretirement spending power for an extended period of leisure and play. The underlying assumption was that not needing to work would ensure your happiness.

But today, most older workers and new retirees don't have sufficient financial resources for the classic retirement. Instead, boomers need to reframe their goals for their retirement years to be healthy, financially secure, happy and satisfied with their lives.

Can they achieve these new goals without working and not needing to maintain their preretirement standard of living? To make ends meet today, most boomers will most likely have to work longer than prior generations of retirees, spend less than during their working years and get the most from government benefits such as Social Security and Medicare.

No silver bullet will magically make their retirement work. Instead, they'll need to be resilient and creative. That's the reality facing this new generation of retirees.

Here are some of the lessons Martin's book offers from millennials and Gen Xers that might help boomers:

  • Rethink housing. Do you really need that isolated, expensive-to-maintain, single-family home in the suburbs? Can you significantly reduce your living expenses by downsizing to a townhome, planned community or even shared housing (think of the "Golden Girls" solution). Isolation is a serious risk for elders, so planning your housing to facilitate social engagement adds to the economic benefits.  
  • Move beyond judgment and cultural social norms that might limit your thinking. For example, is it a really a failure if you and your adult children live together for economic reasons? Many multigenerational families are actually realizing emotional and social benefits by living together and sharing resources.
  • One emerging housing trend for seniors is moving to planned communities of manufactured housing (formerly and derogatorily called trailer parks). Economic necessity has led many seniors to grasp the valuable social connections in these communities, with close neighbors watching out for each other.
  • Rethink transportation. The two-car family might be too expensive to maintain when your financial resources get tight. Can you get rid of one or even both cars? Can you get a Zipcar nearby? Can you bike or walk (which doubles your benefit by giving you valuable exercise)? Can you move close to public transportation? This another way of moving beyond cultural norms that may limit your thinking.
  • Network, network, network to find work. Many younger workers are learning how to navigate a 1099 world, without the benefits or steady income of a W-2 job. They're finding that networking is the key to success in a gig economy. Older workers might be ideally suited for the gig economy, given how many want a more flexible work schedule at this stage in their lives. Most boomers have a lifetime of contacts they can tap into -- an asset that shouldn't be overlooked. In "Great Jobs for Everyone 50+," author Kerry Hannon noted: "'Networking' is one letter way from 'not working.'"   
  • Consciously build community. Boomers lose a large part of their life purpose and social connections when the kids move out and they retire. You'll want to be conscious about building a new community that gives you meaning and purpose, and can help you in times of need (which are inevitable as you age). Martin shares examples of older citizens whose lives are richer by working and volunteering together, sharing meals, gardening, mentoring and just plain hanging around with people of all ages.

Today's retirees will need to be creative if they want to be happy and satisfied with their lives while making the "magic formula for financial security" work in retirement.

The Rolling Stones may not seem like retirement gurus, but they were onto something when they sang: "You can't always get what you want. But if you try sometimes, you just might find you get what you need." 

  • Steve Vernon On Twitter»

    View all articles by Steve Vernon on CBS MoneyWatch»
    Steve Vernon helped large employers design and manage their retirement programs for more than 35 years as a consulting actuary. Now he's a research scholar for the Stanford Center on Longevity, where he helps collect, direct and disseminate research that will improve the financial security of seniors. He's also president of Rest-of-Life Communications, delivers retirement planning workshops and authored Money for Life: Turn Your IRA and 401(k) Into a Lifetime Retirement Paycheck and Recession-Proof Your Retirement Years.