Looking ahead to retirement

by Anita Harris
All Rights Reserved

Retirement used to mean a rocking chair and early bird specials. Although today’s retirees are using this time to volunteer, start new businesses, and travel, there are issues to think about before you stop working.

For many Americans, retirement is a time to explore new talents and interests, and to do the things you’ve always wanted to do.

In her 80s, Helen Rich began studying Italian. In his 90s, Arthur Griffin established a photographic center to exhibit his work. Countless retirees volunteer in hospitals or schools, surf the ‘Net, take part in educational programs, start small businesses, or travel. Many people report feeling happier and more relaxed after leaving their careers. In fact, most experts agree that "most people make the adjustment to retirement quite well," says Richard Griffin, a columnist and former director of the Cambridge Council on Aging, in Massachusetts.

But living happily in retirement doesn’t just happen. It’s important to plan carefully to avoid what Clare Hushbeck of the American Association of Retired Persons (AARP) calls "hidden surprises" that can tarnish your golden years.

Social changes

According to Glen Koocher, also of the AARP, "People who don’t plan for an active retirement sometimes find themselves feeling that they have retired too soon." In his role as manager of programs and advocacy for the AARP Northeast, he observes: "When you're working, you're really busy. You forget that 'once you're out, you're out.' You might stay in touch with people at work for a few months or a year after you retire, but you will gradually lose contact."

Changes at home

If you don't plan ahead, he adds, you are vulnerable to boredom, marital conflict, social isolation, depression, substance abuse and economic stress. In marriages where only one person has retired, Koocher says, problems can arise if one spouse spends all day just waiting for the other to come home. If you are the retired spouse, it’s important to develop your interests or get a part-time job.

This advice is seconded by Barbara Vinick, Ph.D., a sociologist who studied 2000 men and their families. She found that working wives sometimes felt pressured by their retired husbands to leave their jobs, and that female homemakers complained of feeling "impinged upon" by retired spouses who were always at home. "They found it annoying when their husbands lifted pots on the stove, made a mess in common living areas, or eavesdropped on their conversations," Vinick said.

Another typical surprise is that after retirement, spouses have the same energy level, disposition, and interests as before. They just don’t become more literary or more adventurous. "Have reasonable expectations," Vinick advises. "If your spouse didn’t like to travel before retirement, he or she is not likely to change. So don't buy [two] tickets for an around-the-world tour."

Relocating

Many retirees move to distant communities to be closer to their families or to escape cold weather and then find it difficult to establish the social support they need. "Before you relocate, " Hushbeck advises, "make sure it's to a place you've visited and know well. Don't make a big move [and a big financial investment] without thinking about social structure and friends." Remember that your children and grandchildren—all of whom have lives of their own—may not have much time to spend with you. Be sure that you will be comfortable in this new environment if you are left to your own devices.

Single retirees may need to work especially hard at developing social ties no matter where they live. In general, Hushbeck says, retired women living on their own "do better" than men, who may be less adept at building relationships outside of work. For those at risk of becoming isolated, group facilities might be an answer. "While it might be nice to maintain your own home," Koocher says, "you might do better in an environment that offers social interaction and support." Group facilities range from condominium or apartment complexes to assisted living facilities, depending on your age, overall health, financial situation, and special interests. For instance, some retirement communities are being constructed for gay retirees.

Financial concerns

Surprises related to social isolation can be made worse by financial ones—in part because limited means can make it difficult to keep up activities or social ties. Hushbeck explains that approximately one third of retirees "are doing better financially than they ever expected" as a result of recent stock market gains, but "the bottom third is a group that has always struggled, and they will become poorer and poorer as they age." Those in the middle can get by, she adds, "but they may not be able to do some other things they might have liked to." In general, single, widowed or divorced women may have more difficulty making ends meet than do most men or married women, because women have tended to amass less in retirement savings than have men.

In part, financial security in retirement depends on the state of the economy, and can be difficult to plan for. While, inflation has not been a big problem in recent years, "even a rate of less than 2% can make a difference in retirees' spending power," Hushbeck says. "Things may be fine when you leave your job, but ten years out, even low inflation rates can be a pinch." Having assets is no guarantee. "You might have bought your house in 1945 for less than what a car would cost today," but when property values rise, "your taxes go up, but your pension benefits do not."

Health and medical care

Though retirement itself does not have a negative impact on health, it can affect your ability to afford medical care. And, with age, the possibility of ill health increases. Medicare does not currently pay for prescription drugs. And ancillary insurance, Hushbeck says, may not be enough. People who retire with the promise of full medical benefits sometimes find their former companies renege. If the company goes out of business, retirees may have to finance health insurance on their own.

As Koocher points out, "When you're planning for retirement, no one wants to think that they may become sick or infirm." But retirees who have to take on the costs of long term care "can really take a hit." To minimize the possibility of problems with health coverage, explore your insurance (and prescriptions) options while you’re still working and covered. Talk to your current carrier to see what programs are available, and compare them with local HMO options.

Looking ahead

Given the uncertainties of life, Hushbeck acknowledges that living fully and happily in the later years depends, in part, on luck. " But it also requires some skill. To minimize unwanted surprises, Hushbeck says, it is very important to think ahead. Her advice? "Start saving as early as you can, plan as carefully as you can, and look farther ahead than you care to."

Resources

What Will You Do When You Retire?
Self-help Law Center at Nolo.com
http://www.nolo.com/encyclopedia/articles/ret/what_will.html  

Community and Volunteer Programs
American Association of Retired Persons (AARP)
http://www.aarp.org/indexes/community.html  

Women’s Institute for a Secure Retirement (WISER)
http://www.wiser.heinz.org/ 

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November 18, 1999