I have reached retirement age; at least, I have reached the age when people are either able to retire (because of sound investments and/or good benefit plans) or are forced to do so. In my case, while my investments are relatively decent and my employee benefit plan has provided me a little nest egg, I’m not planning to take the plunge any time soon. But, increasingly, friends, who, like me, have reached their mid-60s, are moving from fully employed to either unemployed or what might be called “casually employed.”
I have been observing the lifestyles they have assumed in this new stage of their lives. While overly simplified, there appear to be two basic versions of “being retired.”
The first version is exemplified by Bill, who was a CEO of a mid-sized regional bank when he chose to take a sizeable incentive and end his career (a career that had paid him well and in which he had been exceedingly successful). Bill began his retirement by taking a two-month cruise with his wife. Within two days of his return, he was volunteering to work in a cultural non-profit that needed someone with his business acumen. Shortly thereafter, he was asked to be a board member for another corporate entity. He also was elected president of his golf club and serves as the executive director of the local little league, where his sons played some twenty-five years ago.
When asked what he does to relax, Bill replies, “I play a couple of rounds of golf each week and my wife and I take in a play or a movie or have dinner with friends each weekend.”
As should be obvious, Bill is as active as he has ever been. But he’s retired.
My second version of retired life is epitomized by Sam. Sam was a 40-year employee of a Fortune 500 company who topped out in a middle-management position at the age of 60. Five years later, he accepted the retirement package his years of service had given him and moved with his wife (also retired) from the town where he had worked and lived for all of those years to a retirement community in the Sun Belt.
Sam describes his life as “care-free and completely unstructured.” When asked to describe a typical day, he gives the following account:
“I generally get up around 9:30 or 10:00 and putter around the house for a while. I have my cup of coffee while I read the morning paper. Sometimes, I might take a walk. Around noon, I’ll have a light lunch. Occasionally, I’ll watch some TV, a quiz show or a soap, just to pass the time, mostly. I almost always take a nap in the afternoon. My wife and I sometimes go to one of the local restaurants for dinner—nothing fancy, maybe a Denny’s or something like that. Once in a while we might go to a movie after dinner. Usually, though, we come home and watch TV. We can usually find something we both like. I usually read a little when I turn in—nothing heavy, just a romance novel or maybe a legal thriller.”
Sam and Bill are both 67 years old. Bill looks like he could easily be 57; Sam looks like he might be 77.
I’m not sure which of those two alternatives I’d be more like if I retired. I can’t imagine the Sam-version of retirement. But, in truth, I don’t know that I’d be thrilled with Bill’s hectic pace, either.
My father practiced medicine until he was 90-and-a-half. He finally retired when he felt he could no longer provide his patients with the kind of care he was comfortable with. Three months later he told me that he felt a lack of motivation. Six months after that he died (not of any specific disease, just of “natural causes,” which I take to mean, “no motivation to keep going”).
I haven’t figured out how this last passage to the death stage of life is supposed to work. I would love to keep teaching law for as long as the law students continue to respond to me, to “get me.” After that, I’d probably want to turn full time to my writing, work on another novel, maybe revise my memoir. I suppose, given the time, I could actually try to improve my golf game. I know my wife would like to travel more than we do, and I’d be content to join her on those excursions.
But really, when I get right down to it, I don’t want to move to that stage, that end-stage of my life. Stated positively, I fully enjoy the things that consume my time now, which, principally, are my position as a law professor and my writing in all the forms that hobby takes for me. I enjoy the time we spend with friends, but not so much that I would want a lot more of it. I like the cultural events and the nights at the movies that have always been a part of our lives, but I can’t see doing much more of it. I love to read, but how much can a person read?
In the end, I suppose I would like to die with my boots on. Keep doing what I enjoy doing, continue to work at what I enjoy working at, until I can no longer do those things because, ultimately, as was the case with my dad, I won’t be able to do what I feel I need to be able to do.
Life continues to be a puzzle to me. I think I have my day-to-day existence pretty well in hand: a wonderful life partner; grown sons who are a credit to us both and a joy to behold in their young adulthood; a fulfilling and rewarding career; a serious hobby that gives me great pleasure; a ball team to root for that is finally winning again; and, at least at this point of my life, good health and a sound mind.
The rest, what lies ahead, and what it all means, is a mystery, one I choose not to retire to contemplate.
Great post, Ed. Hopefully, folks who have the option to choose when to retire do the arithmetic to determine when they’ll have enough income to retire to a lifestyle that they desire. Sadly, many who are fortunate enough to be in this group don’t take the time to do the math. But even then, investments can go south, inflation can return with vengeance and ruin financial planning, or health problems can arise to make retirement living nothing like might have been envisioned.
I think I am ~4+ years from choosing to retire. I got a small taste of it this summer when I was furloughed for one day a week. The four-day workweeks were nice, but I didn’t really accomplish anything worth noting. I think that being fully retired would be miserable or boring without activities or hobbies that are enjoyable and fulfilling.
nice journal entry
Very good post Ed, well written and thought out. We are within 5 years of possible retirement ourselves and giving this topic a lot of thought. I find it far too easy on days off to waste time… and would not want my post-retirement life to end up that way. Working makes us have a structure in life. Days off it’s way too easy to get up at 9 like Sam there. Putz around doing nothing and next thing you know the day is gone. My husband is a ‘maker’ and builder of things, he loves projects and has a million ideas. He can’t wait to retire and get to his shop, work on his cars, just do those sorts of things. Yes, we want to travel also.
Good luck with your decision. In your case, since you are doing something you really enjoy, you can probably continue as long as you want to. I am not that happy in my job and cannot wait to get out of there. The one thing I do still appreciate about work is the opportunity to really think, use my mind, keep sharp. But I need a better post-retirement plan to avoid sitting around watching TV and surfing the internet all day. 🙂
Ed the important thing to me about retirement is you must be ready in your mind to retire and from your posting you are not ready.
I have been retired for 10 happy years. I have two main hobby’s, Golf and Softball. I play softball all year around, during the summer I play in four leagues during the week, and a travel team on weekends. I play on teams where all players are over 60 and some teams where all players are over 70 years old. Golf, I get one or two rounds a week, you must keep active, I work out two or three days a week at a local gym.
The wife and I travel quite a bit, since she retired we have been to China, South America, Europe (Germany, France, Italy and England). You must travel while you are physically able, don’t put it off too long.
For me retirement is great but, I have friends that have retired for 6 months or less and then back to work, not because they needed the money but they needed the activity and stimulation of work and they were not ready to retire.
Just remember that retirement is an individual thing and whatever you choose, to retire or not retire that is the correct thing for you.
And one more thing, GO DODGERS!!!!!
Unlike your father who had responsibilities and relationships with his clients that were hard for them to re-establish when he retired, you have a fresh set of customers each year.
In this economy, in your working role, you may even have some responsibility retire and let someone else have the joy and security represented by the job you’ll vacate, now that you are “set.”
Retire that is, if you can imagine something better to do with the time you once spent on work. TV, golf, the occasional cruise or meal at Denny’s may fit that definition, but probably not.
Don’t fall into the trap of “more.” A journalist once asked a hundred high-net-worth people how much they’d want to have banked before taking early retirement. The answer was always “twice” what they now have – even when the current number ran to 8, 9 or 10 digits. The trap.
I assume you can meet needs and obligations. The decision point then is time and self-actualization. As Glen notes, travel is something you must do while you are able, and now is better than 10 years from now. By all means do a cruise or ten; but also consider “moving in” somewhere for 90-days to a year. Write your book(s) in a different time zone, or better yet a different continent. As Glen also notes, without a proclivity to self-develop activity and stimulation, you may as well keep working. As Judy notes, if you have a million ideas for things you’d do with that time, take the parachute.
If after a couple of years you decide the classroom was actually more fun, somebody always needs a good teacher. You’ll be a better one for having taken the break.
I’ve thought about this topic more in recent weeks. No way I can keep working another 25 years like my Dad did (if I even live that long). Not in my current job for sure. I have to get up at 6 AM M – F and be in the office from 7:30 to 4:30, often later. At the end of a workday, I’m pretty wiped out. I envision that as I get older, I’ll be more tired at the end of the day. Since we both work, neither of us are eager to cook dinner, so our meals are pretty basic stuff. certainly, we could prepare meals on the weekends and reheat them for weekday evenings. As it is, our weekends are simply time to catch up on chores and also are shopping days. So, you can get the idea that I don’t see keeping working for all that many years, even though the DoD can’t force me to retire, at least not easily.
I’m a lucky guy in this: in about 3.5 years, my total retired income (including Social Security) will equal my current income, which is a very comforting reality.
I just picked this column up at work today that I thought I would share as food for thought in pondering retirement. Enjoy!
Seven Signs That It’s Not Time To Retire Now
By Robert Laura
For some people, there is a natural progression toward retirement. They know exactly when it’s time to call it quits. For others, thoughts about when to retire make them nervous, and the decision isn’t easy.
Determining the right time to retire can become mind-numbingly complex when you consider all of the personal and financial factors that come into play.
For those individuals and couples who are on the fence and not sure about the right time to retire, you’re not alone. Fellow boomers face the same daunting decision, as 10,000 turn 65 every day and will do so at that rate for the next 18 years.
Instead of waiting for a mystical sign in the sky or a new software program to help you figure it out, consider these seven signs that tell you that now’s definitely not the right time to retire.
1. Whether you surpassed the magical age of 59 ½, when you can plunder your retirement accounts with no penalty, or you turned 62 and you’re eligible for early Social Security benefits, simply retiring because you hit a specific number can be a costly mistake.
“The numbers are pretty compelling for delaying retirement account withdrawals as well as Social Security,” says Certified Financial Planner professional Eleanor Blayney, founder and president of Directions For Women. “We’re all living longer. And if you’re blessed with a special talent or gift in your field, it can make sense to maximize those gifts for as long as possible and delay retirement.”
Retirement expert Bud Hebeler also advises to hold off on collecting Social Security. “The very best annuity is Social Security,” he says. “By delaying the start of Social Security, there is an 8 percent gain each year. Social Security, unlike many pensions and annuities, is inflation-adjusted and offers unmatched spousal benefits.”
2. Despite the stigma associated with becoming a Wal-Mart greeter during retirement, many people are planning to work part time in retirement for both personal and financial reasons. However, you shouldn’t count on being able to find work, says Hebeler, who founded AnalyzeNow.com.
“People are starting to realize that it is harder to return to work if necessary or even find a suitable part-time job to supplement retirement income,” he says.
It’s probably better to hang on to the full-time job for as long as you can. “Those fortunate enough to be working where their employer provides a pension or matching retirement contribution can see them grow by working just a few more years,” Hebeler adds.
Before renouncing your full-time job, think through the trade-off of spending a few short years in your existing role, versus doing menial part-time work for several years that may not be satisfying.
3. A successful retirement warrants approval from your partner, and it’s best if you both prepare for the transition.
Financial coach Christine Moriarty says it’s important to make sure your spouse wants you to retire. “If your spouse keeps saying, ‘Don’t retire yet, don’t retire yet,’ find out if it’s a financial or emotional concern,” she says, “and get it resolved before retiring by working with a therapist or financial adviser.”
Moriarty says that similar to marriage, “The first year of retirement can be the most difficult. … You have to get into a groove, and that can take some time for couples and requires planning outside of just the financial aspects.”
4. Face it, if you’re not prepared for the time you’ll have on your hands, you may find yourself wishing to be back in those boring staff meetings, drinking bad coffee and gossiping at the water cooler.
“If you’re already a scratch golfer or don’t have any interest in playing bridge, you can flounder in retirement,” says Blayney. “People are so defined by their career that moving into retirement can be a shock as they realize they don’t know how to relax and enjoy themselves.”
Some signs of retirees who don’t have a place to go or something to do: They’re the ones driving 20 mph below the speed limit, talking your ear off in line at the grocery store or cleaning their garage twice a day.
“It’s easy to think and talk about retirement — and to even figure out all of the legal and financial metrics associated with it. But when it comes time to do it, people must have a meaningful answer to what they are going to do every day in it,” says Troy Jones, CFP and owner of Access Financial Resources.
5. If your nest egg isn’t quite large enough to sustain you through retirement, don’t expect great stock market returns to make up the difference.
“You can’t invest your way to wealth or retirement success by only picking the winners in the stock market,” says Blayney. “People who are most successful in retirement are not necessarily the most successful investors, but instead are those who live within their means, maintain low withdrawal rates and don’t rely on the stock market to maintain their lifestyle. Doing so is a recipe for disaster.”
It’s necessary to do all the financial calculations before retiring. “I have seen, and heard from, too many people who have retired without ever trying to understand whether they had saved enough money to do so,” says Hebeler. “Now they are both looking for unrealistic investments and full- or part-time jobs and at wage rates that are like the work they did in summer vacations between school semesters 40 years ago.”
6. For years, health care costs have risen at a higher rate than inflation. Then there’s the specter of an unanticipated big expense.
“A friend of mine had to be medevaced by helicopter for a heart attack recently. The cost was $27,000, of which the insurance company covered only 80 percent,” says Hebeler. That left his friend on the hook for $5,400.
Add premiums and copays that can exceed $25,000 a year, and those who are looking to retire before age 65 soon discover the erosive effects of medical costs on a retirement nest egg.
“Word is starting to spread about how much is needed for health care in retirement,” Hebeler says. “Fidelity’s pronouncement that a 65-year-old couple needs $240,000 to cover insurance premiums and uninsured medical costs is shocking by itself, but then comes the statement that this does not cover long-term care provisions.”
Health care costs remain one of the biggest concerns of current and future retirees. “Retiring too early and not having the financial resources to cover health care expenses can make for a stressful and painful retirement,” says Moriarty.
7. When it comes to major life decisions like retirement, sometimes the most obvious signs are the flashing red lights of too many financial commitments. Now is definitely not the time to retire if your situation mirrors any of the following examples.
Your kids are either in college or are sponging off you while living in your basement.
You’re the co-signer for someone else’s house or car.
Your parents haven’t retired yet.
You need a new roof and siding, and your car is making funny noises.
You have credit card debt, a mortgage, a car loan and you’re still paying off your school loans.
Deciding when to retire doesn’t have to be rocket science. Sometimes it’s as simple as looking for personal and financial signs that tell you now is definitely not the best time to retire.