by Ben Swenson
Between 40-hour workweeks and obligations to family and community, it’s hard for middle-aged people to stay ahead of commitments, much less spend any time thinking about the “R” word.
Like it or not, though, retirement is coming – sooner for some of us than others. And like all of life’s major decisions, from education and career to family and community involvement, this looming phase of life benefits from an action plan.
A formal, typed document that frames retirement in terms of absolutes is not necessary, according to Nancy K. Schlossberg, professor emerita of counseling psychology at the University of Maryland and author of Too Young to be Old: Love, Learn, Work, and Play as You Age.
“Few people stay on the same path during retirement, and we’re living a long time,” she says.
But settling for a general idea of what you want to do during retirement won’t cut it. “I want to move to Florida” or “I want to see my grandkids more” doesn’t address the realities that will confront people preparing to retire.
An American Psychological Association publication, Life Plan for the Life Span (free online), offers some helpful questions to ask, including financial planning, legal considerations (such as a will), and provisions for health care.
There is no shortage of advisers, lawyers and medical professionals available to help with these tasks. Having a firm team in place familiar with individual circumstances is indispensable. But there are larger ideas, too, just as important to consider as these structural safeguards.
Schlossberg says one way to think about whom you will be during retirement is to think about what you would put on a hypothetical retirement business card. “You’re reshaping your identity,” she says. “It’s easy during your working life because there’s a label, such as roofer, professor or artist. But in retirement you give that up.”
She identifies six types of retirees:
Continuers: These people remain involved with their profession in some capacity, perhaps even working part time.
Involved spectators: Though no longer active in their fields, these people continue their association through patronage or education.
Adventurers: These brave souls delve into brand new pursuits.
Searchers: These people generally spend a year or two looking for something to give them purpose.
Easy gliders: The fun group. These retirees are freewheeling. They take each day as it comes, letting life’s whims lead them.
Retreaters: This group tends to withdraw from activity. Many become depressed and unwell.
Thinking about what type of retiree you’ll be is important because with this phase of life comes a host of jarring psychological changes. Retirees often don’t realize the social toll of losing daily interactions with friends and colleagues, Schlossberg says. “What’s going to take the place of that?” she asks. “Whether that’s a church group, political party or community center, you need a substitute group.”
Personal relationships shouldn’t escape deliberation, whether with your spouse or partner, or your children. Schlossberg recalls a conversation with a retiree whose daughter wanted her to visit frequently to babysit her grandchildren. The retiree, on the other hand, wanted to accumulate travel experiences while she still could. It’s important to remember that your retirement is your retirement, Schlossberg says.
Having a retirement action plan is not about having a definite conclusion about whom you will be in your golden years. Many people spend considerable time in the searcher phase before hitting a stride – a stride that may change as time passes. Schlossberg says: “What you want people to see is that there’s a whole life for them in retirement.”
Be a tech-savvy retiree
Gone are the days when retirees were reflexively terrified and confused by technology. The integration of computers into the workplace has been around long enough now that most everyone has a certain degree of savviness with high-tech gadgets.
So there’s no reason that retirees can’t use technology to their benefit. Lisa M. Cini, an expert in the design of senior living facilities and author of BOOM: The Baby Boomers Guide to Leveraging Technology, So That You Can Preserve Your Independent Lifestyle and Thrive, says technology is helping people live in their own homes longer.
Here are a few ways technology can be a boon for retirees:
Computer, tablet or smartphone | Apps help people overcome some of the challenges of aging – for example, Skype to stave off loneliness and Uber for transportation.
Personal assistants | Smart speakers such as Alexa and Google Home can be easily programmed to set audible reminders to take medications.
Robots| Small, simple devices can help with chores, such as a Roomba robot vacuum.
Wearable devices | Fitness trackers and sensors, such as glucose monitors, allow people to be proactive in matters of health.
Security | Keeping the home safe now requires minimal effort with products such as entryway cameras linked to monitors and carbon monoxide detectors that can automatically turn off a furnace.
Gamification | Game consoles such as a Wii Fit allow retirees to engage in activities that stave off cognitive and physical decline while still at home.
LED lighting | Strips of lights strategically placed around handrails, stairs and floor features can help reduce the likelihood of a fall.
Health in retirement
Retirement is a mixed blessing. Along with the freedom of leaving behind the workaday grind, there is an inevitable decline in personal well-being. Even for those in the best shape, things just don’t work like they used to.
But the good news is that there are more resources than ever to help retirees mitigate health issues they often encounter as they age.
Accurate information is important to staying healthy in retirement, according to Ethlyn McQueen-Gibson, an associate professor and director of the Center of Excellence in Gerontology at Hampton University. Many retirees are web-savvy, and they can use that familiarity to their advantage.
While haphazard internet searches are not especially reliable, there are several sites vetted by medical professionals specializing in geriatric issues, including the American Geriatrics Society’s HealthInAging.org, the section of HealthFinder.gov titled “Older Adult Health,” and the National Institute on Aging, at NIA.NIH.gov.
These websites offer insight, typically written in everyday terms, that can help seniors and caregivers understand changes that happen as people age and provide recommendations for preventive measures.
This is good information for those who find it, according to McQueen-Gibson, but many older Americans lack the resources or knowledge to seek it out. “They are the ones who end up most utilizing expensive medical services,” she says.
There is nevertheless assistance for older people who aren’t online. As the population of Virginians aged 65 and older grows – nearly one in five will be seniors by 2030 – the number of medical professionals devoted to gerontological issues is also growing. The Center of Excellence in Gerontology, launched this year at Hampton University, is now one of seven aging centers around the commonwealth; three are in Hampton Roads (the two others are Eastern Virginia Medical School’s Glennan Center for Geriatrics and Gerontology, and the Riverside Center for Excellence in Aging and Lifelong Health in James City County).
There is also no substitute for a face-to-face meeting with a healthcare provider, McQueen-Gibson says. Luckily for seniors, such an interaction is covered by Medicare, for which most people are eligible at age 65. Medicare’s Annual Wellness Visit gives people a chance to see their primary care provider, who will assess health risks and provide a brief, written plan to help mitigate any issues.
Smart-home technology | Retirees can regulate devices and systems around their home with vocal commands. Emerging technology also can learn personal patterns and adjust settings accordingly.
Appliances | Technology exists that makes appliances safer and easier, such as automatic stove shut-off and an all-in-one clothes washer and dryer.
Bidets | Making bathroom visits go smoothly becomes more difficult with age, but bidets (some with blow-dryers and heated seats) can help people keep up with personal hygiene when daily showers are no longer desirable or easy.
The changing face of retirement
Retirement is changing. The life that Americans can expect to lead when their working days are done is far different from that of previous generations. It’s illuminating to see what retirement was like nearly half a century ago, and to consider how far we’ve come – or fallen back. Statistics are approximate.
Age for full retirement benefits from Social Security:
Then: 65 (from 1935 to 2002)
Number of years one spends in retirement:
Then: 13.8 (1970)
Now: 19.9 (2017)
Then: 70.8 (1970)
Now: 78.6 (2017)
Life expectancy of males vs. females:
Then: Women live 7.6 years longer than men (1970)
Now: Women live 5 years longer than men (2017)
Number of workers funding each Social Security beneficiary:
Then: 3.7 (1970)
Now: 2.8 (2013)
Share of labor force that is 55 and older:
Then: 17.5% (1970)
Now: 22.4% (2016)
Number of defined benefit retirement plans – private employer pensions that pay a specific, regular amount to retirees:
Then: 103,346 (1975)
Now: 46,300 (2016)
Number of defined contribution plans, such as a 401(k), in which employee and employer contribute to a personal retirement account:
Then: 207,740 (1975)
Now: 656,241 (2016)
Americans who participate in a private pension plan – defined benefit or defined contribution:
Then: 44,511,000 (1975)
Now: 136,179,000 (2016)
Americans 65 and older living in poverty:
Then: 24.6% (1970)
Now: 9.2% (2017)
Americans over 65 with a bachelor’s degree:
Then: 6% (1970)
Now: 27% (2015)
Retirement by the numbers
Fraction of older Americans who plan to pursue new goals and interests in retirement
Fraction of Americans older than 50 who want to remain in their current home as long as possible
Percentage of Americans older than 65 who live below the federal poverty threshold
Percentage of federal spending devoted to Medicare
Average number of years Americans live in retirement
Percentage of Americans who say Social Security is a major source of retirement income
Age at which Americans born after 1959 can receive full Social Security benefits
Average American life expectancy
Percentage of yearly salary that experts suggest retirees need to live comfortably
Average monthly Social Security benefit
Year that Social Security trust funds will be depleted, absent major legislative fixes
Number of Americans who turn 65 every day
Average amount that Americans 55 to 64 have saved for retirement
Number of Americans 65 and older in 2018
There’s no magic number.
Sure, there are all sorts of figures floating around that define retirement savings, but there is not one definitive sum that is considered “enough” for retirement. For some, a nest egg of a million dollars would suffice. For others, a fraction of that would do.
Having sufficient money at hand is indispensable for soon-to-be retirees. But being financially prepared for retirement is also about having a defined structure in place to receive income after your working life, and a clear vision about the expenses that will draw on that account.
There are too many variables to provide a universal number, according to Bruce Rubin, associate professor of finance at Old Dominion University and an expert on retirement planning. Foremost among them is longevity.
“You could die in five years, or you could live to be a hundred,” he says. And even if you’re alive, declining health will be a persistent problem as you age.
Nevertheless, diligent financial planning includes many facets that are easy enough to ballpark, says Rubin, such as the number of years away from retirement you are and whether you wish to leave an inheritance.
Chief among the considerations is the type of lifestyle you want to maintain. Obviously, a retirement frequently cushioned by cruise ship luxury requires more wherewithal than a life of frugality. That’s why a specific and realistic budget for potential retirees is essential – not a back-of-the-envelope estimate, but a true reckoning with the realistic numbers at hand.
Will you be receiving income from a defined contribution or defined benefit plan? Perhaps an IRA? And at what age do you plan on receiving Social Security benefits? Retirees can take a reduced monthly benefit beginning at age 62, wait until age 66 (for those born through 1954, but the age for eligibility is rising), or delay retirement until 70, which will yield a higher monthly check.
Crunch the numbers and come up with different scenarios, assuming you die at 80, 90 or 100.
There is a widely cited rule of thumb known as the “80 percent rule,” which holds that retirees will need about 80 percent of their working income to be comfortable in retirement. A household with an income of $100,000, for instance, will need $80,000 to maintain its standard of living.
Some financial advisers say this figure is too low, but it can nevertheless be a starting point for a look at the math of retirement.
And if the numbers don’t add up? It’s never too late to start saving. An easy way to do that, Rubin says, is to set up an automatic savings plan that feeds straight into a retirement account. Putting money into different types of accounts guards against economic ups and downs.
There’s an unending stream of reliable resources that can help soon-to-be retirees sort through the information overload. A financial adviser is a good step. So is searching for online and print sources.
Among the books Rubin recommends is How to Make Your Money Last: The Indispensable Retirement Guide by Jane Bryant Quinn. One bit of wisdom Quinn offers: Retirees should aim for “rightsizing” their life so that expenses don’t exceed limited income.
“Once you have achieved that balance – emotionally as well as materially – you will find yourself at peace,” Quinn writes. “You’ll know that you can afford your life.”