Getting Real About Retirement

October 12, 2009 at 8:24 am Leave a comment

!BbqE-,w!Wk~$(KGrHqMH-C0Equyk1qOWBK)!mnYQYg~~_35Most major news and business  magazines have devoted one or more recent issues to the topic of retirement and U.S. News & World Report   is no exception.  This journal’s outlook is a bit more cautious and pessimistic with their October 2009 Fall Money Issue cover story stressing  “Yes! You Can Still Retire.”   Contrast that to the Fortune Magazine we profiled in our post on August 14, 2009,“You Can Still Retire Rich (Really!)”  I’d like to retire rich but frankly I’m setting my sights a bit lower and, after reading through the issue, I think the magazine presents valid, if conservative, advice on looking at retirement realistically.

The lead article in the issue “Getting Real About Retirement,” contends that the recession of the past year or so is forcing those of us closing in on retirement to reset our expectations for the golden years. While the economy appears to be making gains, it could be a decade or more before lost wealth and other damage is repaired and author Rick Newman points out we may be seeing a drift down in middle-class quality of life. He speculates that for Baby Boomers the economic tension of the next ten years will play out as a battle between spending and saving.

Newman cites John Bogle, founder of the Vanguard mutual-fund firm and author of Enough: True Measures of Money, Business and Life. Bogle says we’re not going to be able to live the way we used to and we’ll have to be content with a little bit less. In Bogle’s view, imminent retirees are working their way down the “inverse priority” pyramid – the progressively painful list of things they can live without. Most economists expect unemployment to stay high for the next five years and agree that more people are going to postpone retirement.

Other articles in the issue offer advice and guidance on retirement concerns such as best places to live, entrepreneurship, financial planning and investments, careers, and health & lifestyle. For example, here’s a listing of the 2009 “Best Affordable Places to Retire” (in the order they appear):
Columbus, Ohio
Fort Worth, Texas
Asheville, North Carolina
Eugene, Oregon
Kansas City, Missouri
Columbia, South Carolina
Tucson, Arizona
Jacksonville, Florida
Ann Arbor, Michigan
Aurora, Colorado

The U.S.News & World Report Website has an on-line search tool that uses some of the following factors to help readers made decisions about where to live in retirement: strong job growth, low unemployment rate, low business tax rates, reasonable home prices, affordable cost of living, proximity to health care, and ample recreational opportunities. I would add proximity to educational institutions and public libraries to that list!

The issue cites a study we mentioned in a previous Link Logs post, “Boomer Entrepreneurs are Hot!” (July 26, 2009) conducted by the Kauffman Foundation that concludes that we’re going to see an increase in necessity entrepreneurship because people have been laid off and have few, if any, options other than to start their own business.  According to an Urban Institute and AARP Public Policy Institute analysis of late-life working patterns, roughly one quarter of all workers who change careers after age 51 become self-employed.

Kirk Shinkle, author of an article on rebuilding your portfolio, provides some facts about the damage done specifically to the Baby Boomer aged population – the median decline for 401(k) plans that posted losses between January 1, 2008, and early August 2009 for Baby Boomer investors was 19.6%, or a median loss of $12,386   (source: Jack VanDerhei, Employee Benefit Research Institute). To see a full recovery, Shinkle says, will depend on how much one saves and how quickly markets grow but he feels the key will be savings.

One of the shortest articles in the issue, “Making the Most of Frugal Living” has practical information culled from Jan Cullinane’s book, The New Retirement: The Ultimate Guide to the Rest of Your Life.  Recommended is developing habits such as being more vocal about asking for deals from companies, tracking coupons, and using retailer benefits such as gift registries.

There’s a nice photo essay on NORCs (I had never heard this term) “naturally occurring retirement communities.”  The communities which began about 20 years ago, have grown to approximately 300 in the United States, are located in areas with heavy concentrations of seniors, and are natural in that they are not retirement complexes or facilities that seniors move into. These communities provide support services (e.g. home repair, social activities, volunteer support, access to health and fitness opportunities, discounts at local merchants, etc.) to residents so they may age in place.

There are numerous other articles in the magazine, but I particularly enjoyed the “10 Tips for Living to 100” by Deborah Kotz which gathers information from a host of studies on the subject of health, fitness, longevity, etc. Here’s the summary list:

1. Don’t retire!
2. Floss every day
3. Move around
4. Eat a fiber-rich cereal for breakfast
5. Get at least six hours of shut-eye
6. Consume whole foods, not supplements
7. Be less neurotic
8. Be a creature of habit
9. Live like a Seventh-Day Adventist
10. Stay connected

Has all this information about retirement made you more or less likely to retire while still a Boomer (46-64)?  Do you have any tips to pass on to others about things you/they can live without on that inverse priority pyramid?  Please post a comment below – we look forward to hearing your thoughts.

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