March 13, 2018
Dreams of Retirement? Watch for Pitfalls
Early last year, a client who was a month away from retiring walked into Matthew Jackson’s office and asked him to manage his money. Then the client started pulling financial statements out of a folder and slid them across the desk.
“I’m excited for you,” Jackson recalled was his first reaction. “But let’s talk more about what you want to do with your money, rather than want you want to do for your money.”
The client “looked at me and then past me. In 4 or 5 seconds he said, ‘Matt I have no idea.’”
To prod others into weighing this critical question for themselves, Jackson wrote a book, “The Retirement Dreammaker: Master the Art of Retirement Abundance.”
And the dream maker is not Jackson – it’s you.
People facing impending retirement are about to hop on a wild ride that will take them from the emotional high of having the freedom to do whatever they like to an unfamiliar low: no job to give them purpose. Because of that, Jackson is on a mission to warn baby boomers they need to really prepare emotionally for retirement, just as they should prepare financially. (A financial planner turned financial coach, Jackson’s new book also includes a financial chapter.)
“The ultimate freedom is the freedom to follow your purpose,” he said in an interview.
Jackson’s goal in trying to help people who don’t prepare emotionally is not simple but boils down to this: he does not “pump people up – rah-rah.” He prefers to warn of the six retirement pitfalls: …Learn More
March 8, 2018
Retirement – Ripped from the Headlines!
When Squared Away first went live almost seven years ago, few reporters in the mainstream media wrote regularly about retirement. Things have really changed.
The Washington Post recently declared a “new reality of old age in America.” The New York Times and The Boston Globe have regular retirement writers. Even The New Yorker – the go-to read for the aging but still hip – dived in and investigated an abhorrent case involving an abused elderly woman.
Retirement is a hot topic, because some 10,000 boomers have been retiring daily for years – in fact, the media frequently cite this statistic – and an unprecedented number of the boomers who still work are thinking a lot about whether or when to stop.
This blog publishes twice a week, and I don’t have time for the in-depth investigations I did as a Boston Globe reporter. But plenty of newspaper and magazine reporters are exploring retirement issues in great detail.
Here are five of the best articles in recent months:
The New Yorker: “How the Elderly Lose their Rights”:
Metropolitan newspapers often cover local nursing homes charged with elder abuse. This lengthy article is about one government-appointed guardian’s abuse of one elderly woman. This extreme case carries a larger message: how readily some people take advantage of the most vulnerable elderly.
The New York Times: “There’s Community and Consensus. But it’s No Commune.”
Here’s some good news: rather than funnel older people into housing strictly for the elderly, multigenerational “co-housing” developments offer children of the 1960s a place to live, where they can remain engaged with younger people – and society.
The Atlantic: “This is What Life Without Retirement Savings Looks Like”:
Analyses by our research center here at Boston College find that about half of working Americans should have enough money to retire. But the other half of retirees will rely solely on their Social Security. This woman, age 76, had to go to work at a grocery store to supplement her income. …Learn More
March 1, 2018
Future ‘Retirees’ Plan to Work
Most people used to sign up for Social Security when they were fairly young – around 62, which is the earliest age allowed. Not today: fewer than 40 percent are filing for benefits at that age.
So what else are we doing differently? Well, working in retirement is high on the list.
About one in three Americans calling themselves retired in a new AARP survey have worked or now work in part-time, seasonal and sporadic jobs or sometimes full-time.
Keeping in mind that people don’t always do what they’d planned, boomers’ expectations for work exceed what current retirees are doing. Well over half of workers over 50 plan to find some kind of work after they retire.
The seeming oxymoron – working “retirees” – plays out in various ways. State and local government workers retire as early as their 50s if they’ve worked enough years to max out their pensions. Some of these civil servants find other jobs while collecting a pension. Boomers who’ve left career jobs but lack a pension cut back to part-time work in their field or find a full- or part-time job in a new field.
Money is a major reason, with a notable exception. Some people work into their late 60s or 70s because they just enjoy it. They’re usually the most educated and frequently see their jobs as a labor of love that sustains their personal growth, professional identities, or relationships. …Learn More
February 20, 2018
What’s New in Retirement Research
Millennials, longevity, Americans’ retirement outlook – these are among the topics economists tackle in five interesting research briefs.
Links to each brief below appear at the end of their titles. (Full disclosure: the researchers are at the Center for Retirement Research at Boston College, which funds this blog.)
- “Will Millennials Be Ready for Retirement?” – They are the most educated generation. Yet they lag previous generations of young adults in their retirement preparedness. Student loan debt is one big reason.
- “National Retirement Risk Index Shows Modest Improvement in 2016” – Rising house prices boosted individuals’ wealth, modestly improving our retirement outlook. But, again, Millennials face significant headwinds.
- “Is Working Longer a Good Prescription for All? – Most households’ retirement plans would benefit from working longer, saving more, and delaying Social Security. Low-income and less-educated workers with the most to gain financially, however have fewer job options for postponing retirement. …
February 15, 2018
The Ultimate in Travel: Retiring Abroad
Tami Fincher dives into projects head first. Two years into a 5-year plan to retire early in Central America, her short list – so far – is Boca Chica and El Valle de Antón, in Panama, and Guanacaste Province, in northern Costa Rica.
She and husband Stephen Fincher are making their plans to join the growing number of Americans-turned-expatriate retirees. In 2016, more than 603,200 Social Security checks were mailed to retirees, their spouses and widows living abroad. They are moving as much for the adventure as for the lower cost many countries offer.
An exotic retirement isn’t for everyone. Even if they could save on living costs, people who’ve never been keen on international travel might prefer to remain close to home and grandchildren. But the baby boomer wave is pushing up the number of U.S. retirees living abroad – by 11 percent in five years, according to the U.S. Social Security Administration, which tracks its pension checks sent overseas. Ex-pat’s favorite countries include Japan, Mexico, France, Thailand, and Colombia. (More are listed on the next page.)
To assess the pros and cons of Costa Rica vs. Panama, the Finchers made their first exploratory trips, to Costa Rica last June for their 20th anniversary and to Panama over the New Year’s holiday. If Tami, age 53, has her way, they’ll retire in about three years and sell their Houston home to relocate. …Learn More
January 30, 2018
WSJ Recognizes our Retirement Blog
I was honored to be in the company of some excellent retirement writers recognized in a recent article in The Wall Street Journal, “My Favorite Writers on Retirement Planning.” Since I started writing this blog in May 2011 for the Center for Retirement Research, which is funded by the U.S. Social Security Administration (SSA), retirement writers have come out of the woodwork to help the swarms of retiring baby boomers – and many of us need it!
Others featured in the article by the Journal’s Glenn Ruffenach – some new, some veterans – include financial planner Michael Kitces, whom I’ve interviewed about tax strategies for retirement plan withdrawals. Most everyone knows Jonathan Clements, a former long-time Journal reporter now editing and writing a blog. Last but not least, I’ll mention Mike Piper, a certified public accountant – someone new to interview! – and Christine Benz of Morningstar, a Chicago firm that is a long-time source of data and information for this blog.
Each writer is distinct. So, what do we try to do here at Squared Away? …Learn More
January 23, 2018
Millennial Retirement ‘Discouraging’
Baby boomers have limited time and only a few options to improve their financial prospects when they retire and give up a regular paycheck. Millennials have more time to do something about it.
They should start thinking about it, indicates a study by the Urban Institute’s Richard Johnson, Karen Smith, Damir Cosic, and Claire Xiaozhi Wang.
Their test of a comfortable retirement was set at a 75 percent replacement rate, meaning retirees need 75 cents in monthly income for every dollar earned in their final decade of working. For this analysis, the researchers estimated retirement income at age 70 – an age when most people have already retired – for every individual in the federal data sources used in their analysis.
They found that about a third of boomers and boomers’ parents don’t have enough retirement income to make that 75 percent cutoff. Millennnial households will be significantly worse off at age 70: nearly half are at risk.
The prospects for Millennials are “discouraging,” the researchers said. …Learn More