I recently was asked the following question from a longtime friend: “So, what’s new about retirement?” My 20-minute answer seemed to lend itself to a column.
Here are just a few of the “what’s new” that I selected from a long list:
Years of retirement: The U.S. Census Bureau data shows that the average retirement age in the U.S. is about 63 years. If one is lucky to reach 65 years, women can expect to live about another 20 years on average; men 18 years. Although the average length of retirement reported is 18 years, with increased longevity beyond 65, it could easily translate to 20 to 25 years.
What’s next? For many, retirement is predominantly a time of leisure that may include travel, visiting grandchildren, golf and gardening. This type of retirement is happily celebrated by millions of Americans who have worked hard to have those choices. Yet at the same time, others are seeking similar experiences with something more. They are searching for a new role in life that is personally gratifying and that makes a difference. They are asking, “What’s next?”
Terminology: For years, gerontologists and other specialists have tried to come up with another word for “retirement,” since many feel it has the negative connotation of withdrawal. Some declare we should “retire” the word “retirement.” Others do love the word. New terms have emerged that suggest optimism and a new beginning. These include the new life stage, an encore life, the fourth chapter, renewment™ (a combination of retirement and renewal) and the bonus years. Take your pick.
Working longer: About one in four adults age 65 and older is in the workforce. Looking at the percent of older adults in the overall labor force for 2018, those 55 to 64 comprised 27 percent of the labor force and those 75 and older 8.7 percent. That a substantial increase from twenty years ago, when the rate was 17.7 percent and 4.7 respectively. Note entrepreneurship is growing among mid-life and older adults.
Social Security. In 1985, retirees relied on Social Security for 65 percent of their income. Today, it accounts for just 27 percent. Social Security was originally designed as a safety net, not as total income replacement. Unfortunately, about one-third of retirees rely on it for 90 percent of their income.
Technology. Baby boomers represent the first wave of folks who are computer-savvy and are accustomed to using technology on a daily basis. It’s a blessing in that life can become easier with shopping, accessing information, entertainment and staying in touch with family and friends. However, in excess, it could be a curse by enhancing loneliness and a sedentary lifestyle.
Health care costs. AARP reports a couple who retires faces a cost of $275,000 for health care throughout their retirement based on a Fidelity estimate. That’s a 70 percent increase from 2002 that includes Medicare premiums, co-payments and deductibles, as well as prescription drug costs. It does not include costs for a nursing home or long-term care.
You may ask, “How could these trends affect me?” Here are a few thoughts.
Plan to live a long time, that means increase your savings, enjoy your dollars during the retirement years yet know that you may live for many years and have to make your dollars last.
Assuming you can afford to retire, realize you have choices about what to do with your life, whether it’s a more traditional retirement or pursuing something different in this new life stage. Think ahead, take a few risks and experiment.
Working longer has benefits. In addition to increasing Social Security benefits, there is the opportunity for additional income, better health and even longevity.
Plan for health care costs. The looming costs for health care, prescription drugs and long-term care encourage us to save more and to review health plans in a thorough manner. For help on this contact HICAP (within the Center for Health Care Rights) which provides free confidential counseling on the topic of Medicare, Long-Term Care insurance and more. In Los Angeles County call (213) 383 4519; in Orange County call (714) 560 0424.
Retirement is a period of transition that is as dynamic if not more so compared to our younger years. We continue to change, grow and adapt to a changing environment and the changes within us. With a healthy lifestyle, some good choices, resilience and a little luck, the retirement years can be the best ones.