WS Chronicle

by Rebecca Holder

December 31, 2014 marked the last gala in history’s biggest birthday party—the youngest of the Baby Boomers turned 50! Reaching the half-century mark is cause for celebration, and pause for thought. The big “5-0” is a milestone that’s hard to ignore, but human nature being what it is, people tend to think “tomorrow is another day” or “not me.” Happy birthday!—you are officially middle-aged, if not a little nudge past. Now you’re noticing things about yourself that you never gave much thought to before blowing out those candles. And retiring is no longer some distant, unformed blur; it’s tapping on your shoulder. If you’re a newly-minted 50-year-old, one of your New Year’s resolutions should be to give some serious time, thought, and action to what lies ahead as you grow older and prepare for retirement. For those who saw 50 in the rearview mirror long ago, consider the following as a reminder to re-evaluate, adjust, and/or re-create the kind of retirement you desire.

Action Plan for Retirement

There are lots of reasons to plan for retirement. Chief among them is the longevity bonus. In the past, people didn’t think much about retirement—they didn’t live long enough to reach it, and if they did, retirement was relatively brief, about 5 to 7 years. The increases in life expectancies in industrial countries now means if you retire at age 65, it is reasonable to expect that you will have twenty years or more in retirement. One of the fastest growing segments of society is the 85+ age group.

So, you have the time … but how will you use it? Retirement is a whole new world. The timeframes are changing along with the expectations. Increasingly, retirement is no longer a number to reach, but a thought process, an action plan, an adventure, or an opportunity to embark on. In 2006, Ken Dychtwald (the gerontologist who coined the phrase “age wave”) produced an emotional roadmap detailing five stages of retirement: imagination, anticipation, liberation, reorientation, and reconciliation. Knowing where you are, and where you are headed in this continuum, can give you valuable information to make the most of each stage. As a member of the 2014 class of boomers, you’re probably in the first stage—imagination—those 6 to 15 years prior to retirement when expectations are high and anything is possible. Turning those high expectations and “sky’s the limit” dreams into a future reality is where the work begins.

Financial Planning

A key factor in any of the five stages of retirement is finances. The proverbial “nest egg,” or lack of one, can alter retirement. According to the National Institute on Retirement Security, Americans are at least $6.8 trillion short of what they need for a comfortable retirement—a shortfall of $113,000 per household for those 55 to 64. Many financial experts suggest that in order to not outlive retirement savings, the maximum annual withdrawal from savings should not exceed 4%. And to maintain your standard of living in retirement, you need to save 10 to 20 times your annual working income. More simply put, you need to amass $1,000,000 in savings by age 65 to draw a $40,000 a year income. Indeed, financial considerations alone often determine when, or even if, retirement is an option.

Physical Planning

Getting the financial piece in order is critical because it provides a foundation for the other things you may have in mind for retirement. The possibilities are limited only by you. Consider your health as you grow older. Only 32% of 65+ adults follow a regular exercise plan, but everyone knows that staying active means staying healthy. And staying healthy translates to greater satisfaction in retirement and reduced healthcare costs. And what about work (paid and volunteer)? Colonel Sanders founded KFC at 65 using his first Social Security check. Capitalize on your experience or strike out in a new direction with your own business. Opportunities to travel, for education, or exploring your creativity exist. And that’s just a small sampling of what awaits.

Are you a newly-minted 5-0 or has a little of your 5-0 shine worn off? No matter—make your resolutions and plans for 2015; explore the unique opportunities that await you. It is important to think about retirement, but you also need to educate yourself about options, make informed choices, and be actively engaged in the process. Don’t be afraid to make changes and alter your course if needed. Take charge of what you can, but understand and accept that no one has a crystal ball to see what the future holds—things will happen. And when they do, your planning may lessen their impact and put you in a better position to overcome obstacles. Finally, keep in mind that your resolution, your plan, your goal, is about good things—those people and activities—that give meaning and purpose to your retirement, but more importantly, to your life.

Rebecca S. Holder Consulting, LLC invites you to visit www.rshsmartaging.com to learn more about company services, follow the Age-smart Blog, or submit your questions, feedback, and suggestions for this column or about other aging issues.