By Michelle Seitzer, Seniors for Living
"Retirement today isn't your grandfather's gold watch and a goodbye party at age 65," quips Ron Kauffmann, a Florida-based certified senior advisor. It also may not include weeks on the green or months of sipping Bloody Marys on a yacht in Bora Bora. In other words, due in part to the market meltdown, the rapidly rising cost of health care, and inflation, years of luxury Retirement Living are likely not on the horizon for our 78 million baby boomers.
Even before the financial meltdown, Steve Vernon, a financial services advisor and president of Rest-of-Life Communications, says people were underestimating their retirement savings needs. "The retirement savings of most Americans aged 55 and older are far less than the amounts needed to generate a comfortable retirement, even when you factor in expected Social Security benefits."
One contributing factor, says Vernon, is that many people retire too early. "If you are broke at age 80, but you live to age 90, what happens then?" he says. Virtually all books on retirement are written for the 10 to 15 percent of the population that can afford to implement the retirement savings strategies in the book. But what about the rest of us?
Most financial advisors like Kaufmann and Vernon believe that the traditional idea of retirement no longer exists; many, if not all, said that the concept has changed dramatically and will continue to do so in the future.
The rising cost of health care, the questions surrounding the long-term viability of Social Security and Medicare, and increasing lifespan and longevity have created a paradigm shift, says Kaufmann. Add to that mix the tanking of stock market portfolios and real estate values, and we are now facing a very real challenge about what retirement is, when it begins, and how to spend the golden years. Regardless of their financial situation, baby boomers will most likely be pursuing a more active retirement. In Kaufmann's opinion, the new retirement is more about having control over one's schedule and less about being a prisoner to the clock. Older adult workers who stay in the workforce are less interested in climbing the proverbial ladder; rather, they "are just trying not to fall off the ladder." The new retirement is about maintaining financial viability while maximizing opportunities for creative and flexible job arrangements afforded by age and experience.
A great example of someone who has maximized opportunity in the midst of an economic downturn is baby boomer expert and Web entrepreneur Susan Levine. At age 60, while watching her own personal savings diminish, she founded 50somethinginfo.com. The website is a human-powered vertical search engine covering "health, education, insurance and entertainment" and dedicated to delivering the best of the Net to adults 50 years old and "better."
"These are challenging times, making it more important than ever to challenge yourself to become aware of all your interests, talents, and education and apply them to a niche that is underserved," she says. Levine has embraced this philosophy in the creation of her site, a "one-stop source…dedicated to our 50-something lifestyle."
Art Koff, the 70ish-year-old founder of RetiredBrains.com, also transformed an obstacle into an opportunity. According to data from the U.S. Bureau of Labor Statistics, the number of workers between the ages of 65 and 74, as well as those aged 75 and up, are predicted to soar by more than 80 percent. By 2016, workers age 65 and over are expected to account for 6.1 percent of the total labor force, up sharply from their 2006 share of 3.6 percent. Given this dramatic surge and the fact that the challenges of job hunting will be strikingly different at age 75 than at age 25, Koff tailored his site to meet the specific needs of the over 65 crowd. RetiredBrains.com features a free job board connecting older workers with employers interested in hiring them, as well as offering advice and a forum for retirees to ask and answer questions. Think of it as Monster.com for the mature adult.
Creating "Plan B"
Known to his clients as "the financial quarterback," Richard Reyes works with middle-to-late boomers on their financial planning. He's discovered that, like clockwork, retirees get about three years into their retirement before landing in some state of depression. To avoid this slump, boomers must plan for "what's next." "After they've played all the golf they could stand, after they've eaten all the chocolate cake they could want, taken 10 cruises, traveled, and realized their grandkids are not that cool, they are left saying, 'Now what?'" Therefore, he says, it is important to create a plan for what will replace that active work and family lifestyle.
According to counselor Cathy Severson, founder of RetirementLifeMatters.com: A New Model for Aging, the old way of thinking about retirement established an expectation that if you had financial, physical, and mental health as a foundation for your retirement, the rest would fall into place. But "Plan B" involves quite a bit of self-reflection, and is ultimately "a shift from the primary goal of working to make a living" to "doing what you love." Severson uses her expertise in private practice counseling to deliver workshops on transitioning into retirement and working with clients to create "Plan B." In many of her workshops, she challenges participants to integrate five ingredients for growth in what developmental psychologists have labeled the "third age": play, stay connected, seek challenges, find meaning, and take care of yourself in a profound way. She believes that these principles serve as a call to action for the baby boomer generation. "We're the wealthiest, most educated group on the planet," she says. "We need to move beyond building homes and families, and give back in a way that is more than just stuffing envelopes."
Joan Fitting Scott, the author of Skinning the Cat: A Baby Boomer's Guide to the New Retiree Lifestyle, put it best when she said: "The myth of retirement is the rocking chair model. The reality is that people are getting busy." Getting busy covers the gamut from visits to grandchildren and travel to volunteer service and caregiving…and maybe even a new career. But whatever retirement path you choose, she says, "Don't beat yourself up for slowing down." She learned from her own transition that pursuing a more active retirement lifestyle doesn't mean you can't sit in the rocking chair for a few minutes now and then.
Scott believes that the boomers will "do retirement in an activist way," just like they have lived their lives. Baby boomers have been both witness to and participants in dramatic social and cultural change, and their retirement will reflect that, she says. In fact, only 17 percent of the dozens of baby boomers she interviewed for her book said that they wanted a traditional retirement. Her research also indicated that people who plan for their retirement are happier and enjoy the golden years more.
So if you're contemplating retirement, think of it as a time to seek out new adventures, whatever they may be. You'll undoubtedly experience those frantic days when sipping tea on the porch in a wicker rocking chair sounds nice, but honestly, how long could you really sit still in that chair?