Get a Life
You Don't Need a Million to Retire Well
Get a Life
You Don't Need a Million to Retire Well
Ralph Warner, Attorney
December 2004, 5th Edition
Retire happy and healthy without keeping a million bucks in the bank!
The financial-service industry wants you to believe that in order to avoid financial destitution, you need to put aside huge amounts of money that you -- let's say it together -- "should have begun saving years ago."
Not true, states Ralph Warner, Nolo co-founder and the author of Get a Life. Although a sensible savings plan makes good horse sense, many other actions and decisions will determine whether you enjoy your retirement years.
Get a Life shows you how to beat the anxiety surrounding retirement, and to develop a plan to make your golden years the best of your life by:
- developing family relationships
- maintaining and creating friendships
- improving health
- keeping active
- developing a robust curiosity for the world
- realistically calculating how much money you need and how to secure it
The 5th edition provides the latest research and studies that show physically and mentally active retirees live longer and enjoy happier lives. Here are some additional Nolo products that you may find useful while preparing for a fulfilling retirement:
1. What Will You Do When You Retire?
- Plan to Keep Busy
- The Importance of Thinking Ahead
- Making an Action Plan
- Working Part-Time
- Volunteering for a Good Cause
- Pursuing Personal Interests
- Continuing Your Education
- Can You Buy an Action-Packed Retirement?
- A Conversation With Ernest Callenbach
2. Health and Fitness
- Some Immediate Ways to Improve Your Health
- Stop Smoking
- Clean Up Your Diet
- Maintain a Healthy Weight
- Control Your Blood Pressure
- Control Your Cholesterol
- Prevent Brittle Bones
- Manage Stress
- Get Needed Medical Tests
- Embrace Sex and Prayer
- Exercise Often
- Finding Time to Exercise
- Make the Commitment
- Work Less
- Cut Down Commute Time
- Squeezing Out a Few Hours to Work Out
- The Value of Close Family Ties
- How Healthy Is Your Family?
- Ways to Improve Family Functioning
- Spend More Time With Your Children
- Work for a Family-Friendly Employer
- Keep Your Family Unit as Extended as Possible
- Don't Take Family Leadership for Granted
- Try to Develop a Sense of Humor About Lifestyle Differences
- Don't Give Up on Black Sheep
- For Couples: Improving Your Relationship
- Bernie and Bob Giusti
- Getting Close Again
- For Men Only: Look Beyond Your Paycheck
- For Women Only: Avoid a Lonely Old Age
- A Conversation With Henry and Althea Perry
- Make Some Younger Friends
- Make Friends Outside of Work
- Forming New Friendships
- Couples: Make Sure Your Friends Are Really Yours
- Why It's Wise to Join Early
- A Conversation With Yuri Moriwaki Shibata
5. Loving Life
- Embrace Life, Not Money
- Retirement Role Models
- Dare to Be Authentic
- A Conversation With Hazel Peterson
6. Reaching Out for Help to Create Your Successful Retirement
- Find Positive Mentors
- Look Inward
- Participate in a Group Process
- Forming a Geezer/Geezelle Group
- A Conversation With Carol Thompson
7. Nursing Homes: How to Avoid Them, or Pay for Them If You Can't
- Staying Out of a Nursing Home
- Guard Your Health
- Strengthen Your Family Relationships
- Support Community Efforts to Provide Senior Services
- Long-Term Care Insurance
- The Cost of Long-Term Care and of Long-Term Care Policies
- Are Long-Term Care Policies Lousy Deals?
- Who Should Consider Insurance?
- How to Find a Good Long-Term Care Policy
8. How Much Money Will You Need When You Retire?
- A Closer Look at the Retirement Industry
- How Much Retirement Savings Is Enough?
- Estimating Your Retirement Needs
- A Conversation With Afton Crooks
9. Where Will Your Money Come From After Age 65?
- Social Security Retirement Benefits
- How Much Will You Receive?
- Social Security and Working After Retirement
- Pensions and Individual Retirement Savings Plans
- Employer Pension Plans
- Individual Retirement Savings Plans
- Continuing to Work
- Income From Savings and Investments
- Why Many Scare Stories Are Wrong
- How Much Extra Do You Really Need to Save?
- Talking to Your Parents
- How to Think About Inheritance Uncertainties
- Early Retirement Incentives and Buy-Outs
- Withdrawing Equity From Your House
- Rent Out One or More Rooms
- Move to a Less Expensive House
- Sell Your House and Become a Renter
- Get a Reverse Mortgage
10. How to Save Enough—Even If You Think It's Impossible
- Credit Card Interest: How the Poor Pay the Rich
- Looking at Your Credit Habits
- Practical Ways to Break the Credit Habit
- Using a Home Equity Loan or Borrowing From a 401(k) Plan to Pay Off Credit Card Debt
- Plan to Avoid Car Payments
- How to Buy a Decent Used Car for Cash
- Prepay Your Mortgage
- Comparing Mortgage Prepayments to Other Investments
- Where Will Money to Prepay Your Mortgage Come From?
- Adding Up the Savings
- A Conversation With Peter Wolford
11. The Savvy Peasant's Investment Guide
- How to Invest Like a Savvy Peasant
- Your Investment Choices
- Bank Savings Accounts
- Bank Certificates of Deposit
- Money Market Accounts
- U.S. Government Inflation-Adjusted Securities
- U.S. Treasury Bills
- U.S. Government Bonds and Notes
- Municipal Bonds
- Corporate Bonds
- Stock Mutual Funds
- Mutual Fund Basics
- Variable Annuities
- Immediate or Fixed Annuities
- Real Estate
- Precious Metals and Exotic Investments
What Will You Do When You Retire?
Plan to Keep Busy....................................................................................... 8
The Importance of Thinking Ahead............................................................ 10
Making an Action Plan............................................................................... 17
Working Part-Time .................................................................................... 18
Volunteering for a Good Cause................................................................. 26
Pursuing Personal Interests....................................................................... 32
Continuing Your Education........................................................................ 34
Can You Buy an Action-Packed Retirement?............................................ 41
“Old age ain’t for sissies, honey.”
Many Americans already in midlife will live from one-quarter to one-third of their lives after the traditional retirement age of 65. So, even if after you officially retire you continue to work part-time, travel widely, and participate in sports or other leisure activities, you will have plenty of time to do many other things. After talking to hundreds of older people, I’m convinced that the degree to which most people’s retirement years are fulfilling has a great deal to do with how they spend this large chunk of discretionary time. People who are busily involved in a wide variety of activities—both mental and physical—are likely to do well. This probably doesn’t surprise you. But what you may never have considered—and something that could even make you rethink how you spend time today—is that if you wait until retirement to start looking for interests that will happily occupy you, it may be too late. Put more bluntly, unless you develop habits of the mind, body, and heart in midlife that will allow you to lead a healthy, interesting, and socially connected retirement, you risk becoming one of those bored and boring old farts you walk around the block to avoid.
Plan to Keep Busy
Many retirees report experiencing a paradoxical situation. On the one hand, they have the sense that time is short and their life is running out. On the other, they don’t have anything interesting to do after lunch. Even the most avid fisherman, gardener, traveler, or dog lover is likely to find plenty of time to both follow this passion and do many other things—including, if she isn’t careful, becoming bored, depressed, and prematurely dependent on others. As my friend Babette Marks, now in her 80s, puts it,
The ability to maintain an active involvement in life in a number of different ways is one key to leading a decent life when you’re older. Face it, what else have you got? Your health probably isn’t great, half your old friends are dead, and you don’t recognize yourself in the mirror. If you don’t keep interested and involved with lots of activities and interests, you’ll end up a depressed old vegetable.
Babette is as right as she is blunt. In my observation, most people—especially those who have been busy earlier in life—make a successful transition to a reasonably fulfilling retirement if, and only if, they stay busy doing things that reinforce their sense of self-worth. Typically this means being involved with others in activities they feel are meaningful. Everything from selling Girl Scout cookies to having sex can work. But it can also mean participating in highly absorbing solitary endeavors such as skiing, playing music, or reading a wonderful book. However, I can’t find anyone in their 60s and 70s who tells me it’s fun to spend most of their time watching TV, sitting on a park bench, or sleeping late. And even many people who are more active—jogging, walking, bike riding, or swimming—report that continually doing these routine things alone can quickly become joyless. Although I can point to no study that proves it, I’m convinced that people whose lives revolve almost exclusively around solo activities seem to be sicker and more depressed and tend to die sooner than those who are more actively involved with life.
One example of how staying connected to a busy and interesting world seems to correlate with long life and intellectual vigor can be seen in the careers of the justices of the U.S. Supreme Court, one of the few jobs in America where people have never been required, or even officially encouraged, to retire until they are obviously no longer able to do the work. Of the more than 100 justices who have served on the Court since it began to function in 1789, over 50% have served into at least their middle 70s, an astonishing age when you remember that more than half of the justices died before the year 1900, when the average U.S. life expectancy was less than 50 years. Similarly, Cambridge University faculty members (dons) who can and often do, work until they drop live almost four years longer than an average British male. (Trends in Ecology and Evolution, 2003.)
You may think I’m belaboring a fairly obvious point. Chances are you don’t want to be an old couch potato anyway, and accept that staying involved in life’s daily affairs probably does increase the odds of enjoying a fulfilling retirement. Great, but can you back up your conviction by answering this simple question: “How are you preparing now to be able to lead an interesting life, and hopefully even a passion-filled life, after you retire?”
The Importance of Thinking Ahead
Some of us look forward to retirement with an almost childlike sense of anticipation: “This is what I’ve waited for all my life—a really long summer vacation!” Depending on our particular retirement fantasy—gardening, travel, woodworking, painting, golfing, spending time with grandchildren, or simply having the freedom to take a daily nap—leisure-time activities are likely to figure large. Finally we will be free to enjoy every bit of personal gratification we have postponed since the day our parents first said, “If you don’t stop playing and do your homework, you’ll never amount to anything.”
Lots of other people in midlife, however, simply refuse to think about retirement. The idea creates a strong sense of unease because they can’t conjure up any clear vision of what their lives will be like as they age. This inability to confront the inevitability that work, family, and even recreational patterns will change later in life is especially common among people whose lives center around their jobs. As one midlevel manager I talked to remarked, “Once they take away my employee ID number, I’m not sure what I’ll do or how I’ll define myself.”
Missing from both the rosy and the dismal views of retirement is a sense of reality. If you’re one of those anticipating an endless summer vacation, it’s fair to ask whether you really will be able to fill every minute with absorbing leisure activities. Even if you live in a climate warm enough to smack golf balls every day, and never suffer from mah-jongg wrist, will a heavy diet of sports and games prove fulfilling? One friend I talked to recently found that it did not. “After I played golf four days a week for a month, I woke up one day and said to myself ‘this is just plain silly.’ So I called my former partners and proposed coming back to work three days a week. When they enthusiastically agreed, I felt as good as I did the day I got my first job.” What about hanging out with your grandchildren? Assuming they aren’t too busy with school, gymnastics, soccer, and music camp to make time for you, how many hours a day do you really want to spend with them?
But what if, like a lot of people, you have trouble even picturing your retirement? Does this mean you are doomed to sit down in a recliner, pull out your new gold-plated watch, and count off the hours until you die? Or will your fear of all those empty days goad you into figuring out something interesting to do with the rest of your life?
At 65, Lots of People Are Just Getting Started
The notion that older folks are supposed to sit on a park bench and feed pigeons while they wait for the pearly gates to open is increasingly seen as baloney by people of all ages. Many people do their best and most creative work after normal retirement age, a fact that is finally gaining wide recognition.
Ronald Reagan served two terms in the White House after age 65, and the senior George Bush served most of one. Nelson Mandela didn’t become president of South Africa until he was 76. Michelangelo designed St. Peter’s cupola at 83. Ben Franklin helped draft the U.S. Constitution when he was over 80, and Oliver Wendell Holmes, Jr. served on the Supreme Court into his 90s. Many painters and musicians, including Picasso, Matisse, and Casals, continued to create inspirational work well into old age. Verdi’s opera Falstaff had its debut on his 80th birthday. When, at 93, Georgia O’Keeffe could no longer see well enough to paint, she took up sculpture. May Sarton finished her last book, At Eighty-Two: A Journal, just before she died at age 83. And as we all know, septuagenarian John Glenn retired from the U.S. Senate in order to have enough time to rejoin the space program.
The truth is that unless you are one of the few adults who has taken an extended sabbatical from work and child-rearing during the middle portion of your life, you have no idea whether or not you’ll be able to easily fill your retirement days with interesting activities. All of your hopes, fears, plans, and expectations are fantasies, plain and simple. The only way you or I can learn in advance of our own retirement about what works and what doesn’t is to draw on the experience of people who have already retired. That’s why, in putting together this book, I’ve included conversations with numerous spirited older people about how they really fill their days and whether, in retrospect, there were things they could have done in midlife to better prepare themselves for a fulfilling retirement. If you don’t read another word, I urge you to carefully look at what they have to say.
Why should you worry about planning your post-retirement activities long before you retire? After all, depending on how old you are, your retirement may be years, or even decades, from now. Unfortunately, waiting until after retirement to figure out what you will do seldom works well. People who count on developing new interests, activities, and involvement, after 65 often don’t. Ruth Cohen, a Beaverton, Oregon, geriatric specialist, puts it like this: “For the first time in history, older people have a plethora of choices. But unless you have a plan, you’re not likely to get what you want.” (Business Week, July 21, 1997.) Or as Fred Astaire remarked, “Old age is like everything else. To make a success of it, you’ve got to start young.”
You may assume that finding plenty of interesting things to do after your retirement will be absolutely no problem, or that if filling up your retirement hours proves to be more of a challenge than you now think, that you’ll nevertheless deal with it when the time comes. Don’t be so sure. In a recent Harris poll, the typical retired respondent reported spending half of her free time watching TV and a good chunk of the rest doing housework. If this combination doesn’t sound fulfilling to you, you’re not alone. The majority of the retired people responding to the poll complained of feeling less useful after retirement than before. And in a Wall Street Journal/NBC News survey, 30% of retirees reported feeling bored or alienated. And don’t just assume you’ll fill empty hours helping out at a local nonprofit organization. For reasons discussed in the “Volunteering for a Good Cause” section later in this chapter, finding fulfilling charitable work isn’t always easy..
Early Retirees May Have It Easier
Some people dream of escaping the work-a-day treadmill years early. And increasingly larger numbers of Americans are pulling it off, retiring in their 50s or occasionally even earlier. Indeed, there are so many early retirees that, according to the University of Maryland’s Survey Research Center, only two-thirds of men aged 55 to 64 are still on the job. In 1948, 90% of men of this age worked.
What types of pressures and problems do early retirees experience? Leaving aside those who quit work early to engage in an activity of consuming interest, most people who retire in their 50s face the same sort of “what will I do?” and “how will I replace the buzz of the workplace?” problems so often encountered by older retirees. But early retirees do have several big advantages. Because they are younger, they tend to be healthier, which means they are more likely to be able to engage in fairly strenuous activities, such as joining the Peace Corps or walking the length of Italy—things that may be harder to do ten or 20 years later. In addition, the very fact that they demonstrated enough personal grit to make a big change in their life means they are more likely to actively meet retirement problems, rather than passively accepting them. Finally, being younger, early retirees have more time to use a trial-and-error approach to discovering activities and interests that will prove satisfying over the long term.
On the other hand, many people who retire early report at least a couple of problems less common to people who retire in their 60s. The first is the feeling (sometimes reinforced by the attitudes of friends) that by quitting work early they are slackers. Although objective facts may make it clear that this is nonsense, a decision to leave the workplace well before the traditional retirement age nevertheless runs counter to many deeply held American attitudes about the value of work.
A second problem is that at a time when corporate America has shed tens of thousands of unneeded older workers, you may be viewed—whether fairly or not—by friends, business colleagues, and
even family members, as having been cast aside early because you didn’t quite measure up.
Finally, there is the problem of friends—or I guess I should say lack of friends. After all, just because you retire at age 53 doesn’t mean your friends will. (See Chapter 4.) Unless a number of your friends are older and already retired, or you adopt a successful strategy to make new friends, you’ll likely find that you now have plenty of time for interesting activities, but no one to do them with.
Why is it difficult for so many people to find interesting things to do once they retire? My talks with older people suggest that it’s often a combination of:
• a lack of practical knowledge about how to get involved in new activities
• an overreliance on materialism—many retirees mistakenly believe that buying a house, car, fancy vacation, or trinkets will produce a lasting feeling of well-being
• shyness—often the result of a dip in self-esteem that can accompany no longer having a job; shy people too often become isolated people
• insecurity about one’s self-worth (“Who would want me?”)
• declining physical abilities—people who have relied on their participation in sports both to feel good about themselves and as a way to make friends are particularly vulnerable to becoming depressed and isolated, should physical limitations mean they can no longer play
• the inability to find a job or volunteer activity that really makes use of their skills—many retired engineers or executives won’t want to take tickets at an amusement park or lick envelopes for a hospital
• unexpected boredom with planned activities—by the time you finish your third cruise, you may never want to see another margarita—and
• the sometimes unwelcome childcare expectations of your children—if you must care for your grandchildren many hours a day, you won’t have much time to do anything else. This can be great if caring for kids is what you love to do, but tough to cope with if it isn’t.
If you’re a busy, outgoing person in your 40s or 50s, it’s probably hard to believe that factors such as these will ever severely limit your retirement horizons. But one only has to spend a short time with people in their 70s for the blinders to fall off. Over and over again, you encounter people who have become far less optimistic and resilient and far more reticent, sedentary, isolated, and even depressed than they were even ten years earlier.
Here’s a real-life example that does a good job of illustrating how these factors can combine to threaten an otherwise sensible retirement plan. After a busy and fairly prosperous career as an electrician, Ted retired a little early, at age 60. He and his wife Beatrice had long since paid off the mortgage on their house and saved a comfortable sum. Ted, who had sensibly figured out he couldn’t buy a successful later life, planned to fill up his time volunteering with local youth groups that sponsored kids’ sports. For the 20 years since he had successfully coached his own kids’ Little League teams, he had carried in his head a vivid picture of himself again standing on a baseball diamond explaining the fine points of playing shortstop to a group of happy, attentive kids. And during school and evening hours, when there would be no kids to teach, he saw himself working behind the scenes with like-minded adults dedicated to improving kids’ sports opportunities.
A few days after replacing what he hoped was his last substandard wiring system, Ted stopped by a community center to offer his help. His anticipation of an enthusiastic reception was quickly dashed when several parent volunteers, busy trying to cope with a disorganized equipment room, were barely polite. But Ted persevered, making several phone calls to people who coordinated Little League volunteers. Finally, he was assigned to help coach a ten-and-under baseball team.
Unfortunately, on the first day of practice, Ted was shocked and dismayed. The kids who he had eagerly looked forward to coaching simply didn’t respond to his heavily structured approach, flocking instead around the other coach—a 19-year-old college freshman who wore his clothing three sizes too large, kept his hat on backwards, and shouted bits and pieces of popular rap songs as he hit the kids hot grounders.
Nor did anyone in the community center seem to be particularly interested in Ted’s repeated offers to contribute his organizational skills to the nonprofit corporation that ran the youth softball and soccer programs. When, after several of his phone calls were not returned, Ted received an aggressive call from a fundraiser asking him to make a “significant” contribution to help develop a new ball field, he became angry and disgusted. Before long, he stopped coaching the baseball team, explaining to his family, “Kids just don’t want to listen these days. I’m not going to be ignored or treated like an old fool.”
Later that summer, Ted tried his hand helping with a math tutoring project and a summer recreational program for low-income kids. Again he felt unappreciated by the kids and undervalued by the program coordinator.
In less than six months, Ted’s retirement dream had crashed. After painting the house, rebuilding the garage, and organizing the basement, he had so little to do, he decided to start up his business again, if for no other reason than to get out of the house and stop driving Beatrice nuts.
At this point, Ted’s adult son, Peter, who understood from his own experience that his dad knew lots about teaching sports and that organizers of kids’ sports programs always need help, figured out that something was badly wrong. Guessing that his dad had simply lost touch with how to relate to kids in the almost two decades since his youngest had entered high school, Peter took a week off from work and accompanied (“dragged” might be a better word) Ted to a well-organized weeklong coaches’ clinic.
Peter’s intervention was inspired. Ted loved the clinic, which was based on the theory that from the first moment, teaching and learning the fundamentals of baseball should be a positive experience. And although he never quite admitted it, Ted quickly saw the flaws in his drill-sergeant-type approach, which focused too much on telling kids what they were doing wrong. Armed with his new positive coaching approach plus a small library of state-of-the-art skills videos and drills, Ted again signed up as an assistant Little League coach. This time, the kids were much more responsive, and Ted began to look forward to every practice and game. His success with the kids and his willingness to take on lots of extra tasks, such as lining the field and coordinating equipment, quickly led to a position as head coach, and then to running spring baseball and the summer tennis and soccer programs. Eventually, Ted was also asked to coordinate the entire countywide under-ten soccer program.
Somewhere along the line, Ted bought a bright red hat, complete with prominent floppy ears. The kids, by whom he was now increasingly surrounded, started calling him “Teddy Ears.” A few years later, when the commissioners of the local kids’ basketball program voted him coach of the year, he was given a plaque that read, “To Coach Teddy Ears, the one man we couldn’t do without.”
Ted was lucky. Thanks to timely help from a wise son and the teachers at a good coaches’ clinic, he overcame his lack of preparation and eventually settled into a retirement role remarkably similar to the one he had dreamed of. Sadly, many retirees are not as lucky. For a variety of reasons, they are not able to recover from their pre-retirement failure to hone old skills, develop new ones, or make and nurture necessary personal contacts. As a result, they fail in their first attempts to realize their retirement dream, whether it be finding a new job, becoming a successful volunteer, or going to school. Of course, an initial failure or two probably won’t faze self-confident people. But many others, particularly those coping with one or more of the common problems of aging—such as declining health, depression brought on by the death of a family member, or simple shyness—settle into a recliner, turn on the TV, and give up.
Making an Action Plan
Okay, now it’s time to focus on your own retirement. Exactly what will you do? Yes, I’m challenging you to come up with a detailed list. Take a few minutes to sit down with a pen and paper and write down the things you anticipate being actively involved in. Don’t include solo activities such as reading, watching TV, walking, or jogging. While fine in themselves, these are not likely to keep you energized and interested for long. Go light on activities whose common denominator is buying things. Materialism is toxic to joy and fulfillment at any age, but this is even more true later in life when the old saying “you can’t take it with you” takes on real poignancy.
Make your list as specific as possible. For example, if you plan to participate in charitable activities aimed at helping immigrant children learn English, put down the details of who you will work with and what your helping activities will consist of. If you plan to learn a new skill, whether it be oil painting, how to develop an Internet site, Japanese calligraphy, or riding a motorcycle, where and when will you do it?
How long and detailed is your list? In my experience, too many people list a few general things such as travel and adult education courses and then get stuck. That’s not good enough. Unless you can answer this all-important question with a list of things you are excited to learn or try, you are at risk of being one of the millions of older people whom my friend Stan Jacobsen describes as “spending lots of time in their favorite chairs contemplating their bodies falling apart.” And Stan should know—he has already retired twice and each time found himself so bored he went back to work. (The last time, he landed as an editorial researcher at Nolo, where he helped me put this book together. See Stan’s story in Chapter 9.)
If you’re having trouble coming up with a fairly detailed plan, don’t panic. After all, since you haven’t retired yet, you have time to do some creative thinking and preparing. To help you get started, the rest of this chapter focuses on the main activities successful older people embrace to use their time well.
According to one poll, 24% of retirees said they retired too soon while only 8% wished they had retired earlier. (Los Angeles Times, April 3, 2000.) This neatly dovetails with a 2003 Census Bureau report finding that since 1980, the number of Americans 65 and older who either have a job or are actively looking for one has grown 50% to almost 4.5 million. It also fits with my own experience that many people who enjoy the bustle and creativity of the workplace find that continuing to work at least part-time after reaching retirement age offers the best opportunity to stay busily involved in life. And of course, planning to work a few extra years beyond retirement age (assuming you are pretty sure you can pull it off) can also go a long way toward helping solve any money problems you run into. (See Chapter 9, Where Will Your Money Come From After Age 65?) The extra income will probably eliminate or greatly reduce your need to tap your savings until you cease working altogether. This, in turn, means that your investments will be busy earning additional interest or dividends.
How important are earnings after age 65? For Americans between 65 and 74, paychecks are the second largest source of income after Social Security, amounting to 25% of all income, according to the Department of Labor. Earned income is particularly important for single older women, a group particularly likely to have inadequate savings. And it isn’t only people in their 60s who increasingly choose to continue to work. According to the Bureau of Labor Statistics, in 2000 13.5% of people 70 to 74 were working or looking for work, up from 11.3% in 1990; the figure for those over 75 was also up, from 4.3% in 1990 to 5.3% in 2000. Perhaps even more indicative of the trend towards staying at least partially employed after 65 is the fact that many retirement communities now offer units with home offices.
But money is far from the only motivation for working after normal retirement age. Lots of people enjoy the intellectual stimulation, social interactions and, most important for many older people, the sense of self-worth that accompanies having a job. (See the conversation with Ernest Callenbach, which follows this chapter.) I don’t believe it’s a coincidence that my friends in their 40s and 50s who are in jobs with no mandatory retirement age seem far more relaxed about their prospective retirement than are other friends who face fixed retirement dates. Knowing that they can continue to work until they decide to give it up affords them a sense of security and control others lack.
As Roderick Duncan, a septuagenarian California Superior Court judge who continues to accept temporary assignments a few days per week puts it, “When I’m on the Family Court bench, I can really make a difference in people’s lives in a way that’s impossible in the rest of my life. I both feel competent and have fun, largely because I know I’m doing something that contributes to the greater good. For example, when I handled the contested guardianship of a one-year-old whose parents had been killed, my job was to do just one crucial thing: decide what was best for the child. Nothing else—just what made most sense for one tiny human being. Being a judge is always an important job and, for me, on many days, a wonderful life-affirming role to be in, one that I know I can’t match by taking the dog for a walk.”
Can they push you out just because you’re old?
For a good summary of the federal Age Discrimination in Employment Act (ADEA), see Your Rights in the Workplace, by Barbara Kate Repa (Nolo). Also, the American Association of Retired Persons (AARP) publishes several good pamphlets on age discrimination. You can check out AARP’s AgeLine Database at www.aarp.org. It contains a searchable database that includes references to books, journal and magazine articles, and videos. You can also write to AARP, 601 E Street, NW, Washington, DC 20049, or call 800-424-3410.
How Age Discrimination Laws Protect
Your Right to Continue Working
Federal law prohibits age discrimination in hiring, discharges, layoffs, promotions, wages, and other areas of employment. (The Age Discrimination in Employment Act, or ADEA (29 U.S.C. §§ 621-634).) The key ADEA rule—which applies to workplaces with more than 20 employees—is that, subject to several big exceptions, no worker can be forced to retire. Unfortunately, the exceptions include:
• executives or policy makers if they would receive annual retirement benefits worth $44,000 or more
• certain police and fire personnel
• tenured university faculty
• federal employees in the fields of law enforcement and air traffic control
• anyone in a job, such as piloting an airplane, where age is a bona fide occupational qualification. However, an employer that sets age limits on a particular job must be able to prove the limit is necessary because a worker’s ability to adequately perform that job does, in fact, diminish after the age limit is reached. Fortunately, this is difficult for most employers to do.
It’s one thing to look forward to working for a few years or more after 65, and quite another to pull it off. Leaving aside Supreme Court justices, popular authors, and others who feel little pressure to retire, and despite laws prohibiting age discrimination, the great majority of older Americans have no assurance that work they want to do will be available to them. Certainly this is true when it comes to keeping active in their long-term or “career” jobs. Even in this age of low unemployment, American employers have become increasingly adept at orchestrating employee buyouts, push-outs, and restructurings in an effort to rid themselves of more expensive older workers. Faced with the threat that they will be laid off with no compensation, millions of Americans “voluntarily” accept a lump sum payment to leave the workplace early. The result is that most people who will reach retirement age in the next two decades, but want to continue working, will have to find a new job or occupation. And face it, even when employers are supposedly beating the bushes for workers, after age 55 it isn’t always easy to find a job that is both interesting and even moderately well-paying, something that goes far to explain why a person’s interest in continuing to work later in life is likely to vary considerably with the job on offer. According to a 2001 national study (“American Attitudes Towards Pensions and Retirement”), 71% of self-employed workers hoped to continue to work either full- or part-time after their normal retirement age, but only 53% of salaried workers and 42% of hourly workers wished to remain in the workforce.
If you hope to establish a new career—or even find a part-time job more challenging than clerking at a discount store or working at an airport rent-a-car center—it’s a good idea to plan well in advance. While your retirement job needn’t be in your current field, obviously it should make use of skills you already have or can fairly easily acquire. And so much the better if it’s something you can do part-time and—should you want to relocate—isn’t tied to a particular geographical area.
Assuming you come up with a new career idea that meets at least some of these criteria or otherwise seems sensible, I strongly recommend that you take the time to test whether it’s really likely to work. Just because you think you would enjoy teaching, working in a plant nursery, consulting, or caring for small children doesn’t mean anyone will hire you to do it, or if they do, that you really will find it satisfying. Unless you have hands-on experience in your prospective new field and know there will be a job waiting for you, your post-retirement work plans are little more than a fantasy. And as we all know, fantasies come true a lot more often in Disney movies than they do in real life.
Here is an example of someone who clearly understood the barriers to transitioning to a new career and creatively worked to overcome them. Betty, an English teacher, planned to retire in her middle 50s after 30 years in the classroom. With her house paid for, a decent teacher’s pension, and modest savings, Betty felt she could scrape by without working, as long as she faced no major financial emergencies. But to afford a few amenities—especially to fulfill her dream of seeing much of the world—as well as to increase her savings cushion, Betty wanted to continue working, at least part-time, in a field that truly interested her. As a single mother who had worked hard to support and raise her children, and in the process necessarily limited her own social life, Betty was also conscious of the need to make new friends and develop fresh interests.
Betty’s dream was to work in book publishing. From the time she was a small girl, she had been drawn to books and everything to do with writing, editing, and producing them. She not only read books by the armload, but their authors’ biographies and acknowledgments (and even the copyright information on the back of the title page). It was as if she wanted to inhale the publishing process.
Instead of waiting until after retirement to explore the publishing field, Betty started investigating local opportunities as soon as her youngest child was in college. Since she lived in a fairly populous area, it turned out there were a surprising number of small publishers within easy driving distance. Over a few months, Betty was able to arrange informational interviews with half a dozen. She then got to know a couple of her favorites better when they accepted her invitation to participate in career day activities at the junior high where she taught.
In the course of this practical research, Betty quickly saw that there was a continuing demand for people who were skilled at using a computer to do graphics and page layout. Since this seemed both challenging and fun, she signed up for an introductory desktop publishing course at the nearby community college. When Betty found herself looking forward to every class, she knew she had made a good choice and invested in a relatively inexpensive Macintosh computer, page layout software, and several how-to books so she could practice at home.
After six months of classroom and self-study (and still two years before her retirement), Betty felt confident enough of her new skills to call the two publishers she liked the best to inquire about part-time freelance work over the summer. She cannily proposed charging what she knew was a modest fee, and both quickly found projects “to try her out.” One involved incorporating the revisions necessary to update a guidebook to local bed and breakfasts, the other laying out a “favorite recipes” book commissioned by a local children’s shelter as part of a fundraising campaign. Both publishers were more than pleased with Betty’s work and told her she could have more whenever she wanted it. To celebrate, Betty took her two children (the older one had just finished college) to a local bookstore, where the books she had helped produce were on display. She was proud to point to her name on the back of the title page under the small heading “Graphics and Production.”
It’s easy to see Betty’s wisdom in investing time, energy, and a little money in developing the skills and contacts necessary to work in a field she had felt drawn to all her life. Planning like Betty’s is particularly wise for anyone who intends to change fields. But even if you plan to work at an occupation closely related to what you did much of your adult life, you can usually benefit from careful preparation. For example, say you’re a successful small business owner who plans to sell your business and become a home-based consultant, providing marketing advice to other small business owners in the same field. Although you may know virtually everything about how the underlying business works, chances are you’ll nevertheless need to hone other skills. This might include developing or improving your writing (perhaps grown rusty after many years of delegating such work to subordinates), learning how to use a computer quickly and easily, and coming up with cost-effective ways to market your services—something that every consultant must do.
Learn How to Sell Yourself
Many people who work for corporations, government entities, or academic institutions haven’t a clue when it comes to marketing their services to a wider world. If this describes you—and especially if you plan to work as a self-employed consultant or service provider—you’ll need to develop this skill. One good approach is to arrange to work with someone who is already successfully running a small business you respect.
A second is to systematically create and maintain a network or potentially helpful business friends and colleagues well before you retire. With a few years of planning and thought, you should be able to develop a powerful contact list of people you can tap to help market your new business. One technique that may help you establish credentials as an expert is to contribute articles to professional journals and websites respected by people in your field.
Similarly, anyone who wants to turn a hobby—for example, designing gardens—into a business will usually need to master a basketful of small business skills. Many years spent learning about plants and how to create lovely landscapes won’t be preparation enough. Among the many additional things any landscape garden entrepreneur will need to know are how to market his or her services, purchase plants wholesale, hire help for heavy digging and lifting, charge and bill for services, and collect overdue accounts.
The Exciting New Career of Professor Grout
Alan, a smart guy from a poor family, ended up with a limited education and spent most of his working life as a maintenance man and then maintenance supervisor for a local school. He didn’t hate his work, but after 30 years, he didn’t love it either. Alan’s dream had always been to run his own business.
At age 55, with his kids out of the house, Alan decided that if he was ever going to change his career, it was time to begin. But without a lot of money to invest in buying or starting a business, and no obviously bankable skills, he was at a loss as to what his new work should be. Alan’s personal epiphany came one day as he was fixing some broken tiles in the kitchen of the teacher’s lounge at John Quincy Adams Elementary School. It suddenly dawned on him that tile grout was always falling apart, and what the world truly needed was more people expert at replacing it.
After checking out the local tile scene, Alan found that while lots of general contractors did tile work and several local tile layers specialized in custom work, most preferred bigger jobs such as tiling new bathrooms and kitchens. Not many, it turned out, really wanted to patch a few broken tiles or replace degraded, old grout. Alan got busy. He purchased every type of grout concoction on the market, scavenged a bunch of broken tiles from the dumpster behind a building supply warehouse, and began to practice. Before long, he was a master at matching and patching old tile and ready to market his new service.
His first ad in a penny-saver newspaper yielded five calls. Within a year, Alan, who now called himself Professor Grout, had retired from the school district (he was eligible for a decent pension) and was happily and profitably embarked on his new career.
Volunteering for a Good Cause
An active, maybe even passionate, involvement with an altruistic activity can be a hugely positive way for people to approach their later years. Among the benefits are staying busy, feeling needed and valued, making new friends (especially younger ones), and the personal satisfaction inherent in doing something you believe in. At a time when many surveys find that one-third of retired people feel bored or alienated, doing valuable work in the nonprofit sector can be a powerful antidote.
It’s almost a cliché that Americans will organize to support almost any good cause and more than a few slightly wacky ones. As a result, about 11% of the nation’s entire economic activity takes place in the nonprofit sector, much of it dependent—at least in part—on the unpaid work of volunteers. Oddly, it seems to be something of a secret that “senior power” is a powerful reason why so many nonprofit groups achieve so much. If you doubt this, take a look at any local educational, religious, environmental, or health care group—even the volunteer fire department. You’ll probably see that much of the behind-the-scenes leadership, as well as the bulk of volunteer help, is provided by retired people.
When you consider how stretched for time so many younger adults are as they try to work and raise a family, it should be obvious that much of the good work our communities have come to rely on wouldn’t get done without the energy and commitment of older people. But time and commitment aren’t the only help that older adults offer. Commonly, their most important contribution is competence. For example, a retired bank manager or accountant can bring a level of financial savvy to a growing community crime prevention group that the organization could never hope to buy. And when a church or hospital needs a new building, it will almost always search the roster of volunteers in hopes of finding a retired contractor or other person familiar with the many pitfalls of construction to help guide them.
The fact that nonprofit work is usually unpaid doesn’t alter the fact that, like any other work, success depends on competent people conscientiously and creatively applying themselves. As such, it’s often a great fit for retired people who have no compelling need to earn more money but want to stay actively involved in community concerns.
Occasionally, people become involved in nonprofits because of the status they think they will gain as a result of membership on the board of directors or other responsible position. Although doing good works and gaining the respect of your friends and the larger community can lift your sense of well being, participating primarily for this reason is almost always a mistake. Serious involvement in the nonprofit sector is hard work, and recognition—if it comes at all—is usually only in the relatively small circle of people who truly care about the activity.
Older Americans Do Well by Doing Good
Here’s what one researcher concluded about older volunteers with the U.S. government’s Foster Grandparents and Senior Companions programs:
“In addition to evidence that seniors can contribute in important ways through service, there are indications that the seniors greatly benefit themselves by serving. In fact, the engine driving senior service may well be less airy altruism than a strong and straightforward desire for structure, purpose, affiliation, growth and meaning ….
“Research on benefits to Foster Grandparents … found that participants’ mental health and social resources improved over the three years, while those on the waiting list declined in these areas. Among the study’s other findings: 71 percent of the Foster Grandparents reported they ‘almost never’ felt lonely, compared with 45 percent of the waiting list group. Also, 83 percent of participants reported being ‘more satisfied’ with their life, compared with 52 percent of those waiting to become Foster Grandparents.”
(“Seniors in National and Community Service,” a report prepared for the Commonwealth Fund’s Americans Over 55 at Work program by Mark Friedman.)
In thinking about my own not-so-far-off retirement, one question that interests me is whether volunteering for a good cause provides pretty much the same personal benefits as does working in the private sector—except, of course, a paycheck—or is likely to be more fulfilling. After talking to many people who have done both, my tentative answer is this: When it comes to staying busy, providing structure or discipline to one’s life, and being absorbed in problem solving, there is often little difference between for-profit and nonprofit work. But especially for those retirees whose jobs haven’t been particularly fulfilling, there are several powerful reasons why working with nonprofits can prove more satisfying than soldiering on in a boring job:
• Doing interesting work: Nonprofits often allow retired people to do work that they find more interesting and satisfying than would be possible working for a company busily trying to make money. After all, there aren’t too many corporations whose main goals are to preserve a rain forest, record the oral histories of elderly Estonian immigrants, or teach low-income children to read. By contrast, the nonprofit sector offers an array of fascinating activities that should be sufficient to inspire even the most jaded imagination. And at bottom, it’s this sense of honest involvement that separates the happy toiler from the clock-watcher.
• Looking to the future: Almost by definition, nonprofits aim to improve the quality of life. Working with an organization dedicated to making at least a little slice of the world better seems to help some participants cope with the inevitability of their own death. The fact that your good work will live on after you die can make your life more meaningful. As psychologist Erik Erikson put it, “I am what survives me.”
Doris Helps Preserve a Marsh
While working on this chapter, I attended a board meeting of the Save San Francisco Bay Association, an environmental group I volunteer with. As part of a discussion of preserving wetlands, Doris Sloan, a retired University of California professor and long-time environmental activist, recounted how recently she had looked out the window of a jet as it descended toward San Francisco airport.
She explained that when a large green wetland on the north shore of San Pablo Bay came into view, she remembered that, ten years before, it had been slated for a development containing up to 10,000 homes. Doris then reminded the Save the Bay board members that the group’s work—along with that of other Bay Area environmentalists—had been essential to preserving this biologically rich and diverse stopping place for migrating birds. Doris movingly summed up her feelings by saying, “When I looked down at that big, beautiful spot of green, I felt good all over.”
• Paying one’s karmic debts: Working with nonprofits gives people the chance to indirectly repay those whose efforts have smoothed their own way. Whether it be a grandparent, teacher, older friend, or helping organization, we all know and cherish the memories of people and groups who did something extra to enrich our own lives or help us achieve something that might otherwise have been out of our reach. Helping others lets us pass on the love and support once given us.
• Meeting interesting people: Work with nonprofits may lead to more rewarding friendships than are likely to occur in the private sector. I say this not because the job site isn’t a good place to make new friends; to the contrary, it’s one of the best. But nonprofit groups, which by definition tend to attract like-minded people, can be even better. Or as a friend who spends lots of free time supporting girls’ sports said, “Where else can I find people interested in talking about the best way for a fast pitch softballer to throw a rise ball?”
Just as it is obvious that preparation is necessary to get a good job in the private sector, planning ahead can be key to succeeding as a volunteer. At first you may think this is silly—after all, you’re not asking to be paid, only to help out. Think again. As Ted, the retired electrician who wanted to help with kids’ sports programs, found out the hard way, not all volunteers are welcomed. Increasingly, many nonprofits use the same sorts of management and training techniques as do for-profit enterprises. And an increasing number of nonprofits hire paid staff to accomplish most key tasks, with the result that only skilled and experienced volunteers are needed—and even they are too often relegated to tasks such as stuffing envelopes or staffing fund-raising tables.
But even professionally staffed nonprofits still need help from at least a small cadre of skilled volunteers—some of whom will likely be retired—to sit on their board of directors and key advisory committees. But these people are usually drawn from those who have been active in the field for many years or who contribute cash to the cause. The unfortunate result is that retired volunteers who don’t have a history of working in a particular field or deep pockets may have a difficult time finding satisfying work. This is especially likely to be true if, as is common with older people, the volunteer is a little shy or insecure or is physically limited. All of which goes to explain why in 2002, the U.S. Department of Labor found that volunteer rates were lowest for senior citizens and those in their early 20’s.
Nonprofits don’t throw out their veterans
In too many parts of American life, even middle-aged people are often needlessly and callously cast aside. For example, corporations and governmental entities usually force (or bribe) their senior executives into retirement at or well before age 60 or 65, just when many are enjoying their most productive years. Happily, this “prefer-the-young” mentality often doesn’t extend to nonprofits. Especially when volunteers have been involved for many years, most nonprofits bend over backwards to find them useful work well into old age. Unfortunately, because people wait until after they retire to volunteer, they have less time to find a useful role and this type of bonding may not occur.
You may think I’m exaggerating. After all, no matter what your age, isn’t it possible to begin working with a helping organization by performing a simple task, such as answering the phone or doing office work? Don’t be so sure. The group you want to work with may have paid clerical staff. And rapid technological change is squeezing out what used to be regarded as unskilled tasks in the nonprofit sector only slightly more slowly than in corporate America. In many nonprofits, people who can’t skillfully operate a computer can’t be of much help.
Even if you do find a nonprofit that needs you to stuff envelopes, there is no guarantee this will lead to more interesting work. A 1998 study by the UPS Foundation found that 41% of people who regularly volunteered stopped because the nonprofit organization did not make good use of their time and talents. Close to 60% reported they would volunteer more hours if their time were better used.
The lesson in all of this is much the same as it is for those interested in continuing to work for pay: to find a fulfilling role in the nonprofit sector, it’s best to prepare in advance. Volunteering well before you retire gives you plenty of time to look for a group that will be able to make good use of your existing skills, and also affords you a chance to determine whether you are really suited for a particular type of work and to look elsewhere if you aren’t. You may learn that you need additional education or training to do volunteer work that will be truly satisfying.
Finding a good nonprofit you can truly bond with is sometimes harder than you might guess. For example, one friend, Joan, who had planned for years to help out with a marine animal rescue project, retired early so she could begin this exciting work. She was hugely disappointed to discover that being around cold saltwater caused her arthritis to flare up so badly that she couldn’t continue. And for various reasons, her efforts to volunteer with several other wildlife organizations didn’t work out. After consulting the staff at a local volunteer center, Joan finally found a good match—helping out in, and eventually running, the animal lab at a children’s science museum. Looking back at her experiences, Joan feels she was lucky things worked out so well. “I can see I was naive about my future plans. Being active in animal rescue and teaching kids about animals on a daily basis not only involves a big time commitment, but also involves a level of planning, management, and physical stamina that I was unprepared for. I realize now that I didn’t understand how much I would have to grow to be able to handle it. I was lucky to get inspired help from our volunteer center—otherwise my lack of preparation might have doomed my whole plan.”
Similarly, Rob, a law librarian, thought that after retirement he would like to help average people learn legal survival skills. But a few years before retirement, when he volunteered as a counselor at a legal aid office, he found that dealing with lots of anxious, impatient people caused him so much stress he couldn’t sleep. After reluctantly facing up to the fact that he wasn’t willing to live with this much personal anxiety, but still wanting to use his legal experience to help people, he looked for other places to volunteer. After a couple more good ideas turned into near misses, Rob asked a group of volunteer lawyers who helped low-income people accomplish their own legal tasks if they needed research help. It turned out they badly needed someone to organize their library and help research legal issues—tasks Rob could do and still get his rest. In fact, Rob was so excited about embracing what he now jokingly calls “my second career” that he retired from his first one a few months early.
Pursuing Personal Interests
The last thing some recent retirees consider is continuing to work, in either the profit or nonprofit sector. For them, retirement offers a chance to finally have the time to do many of the interesting things they have put off all their lives. If this describes you, I have an important question to ask: Outside of your work and family, what truly fascinating activities do you currently spend a significant amount of time on?
If, like many people in midlife, your answer is that you haven’t had time to follow up on old interests or develop consuming new ones, but plan to do both after you retire, please pay attention. You are at high risk of having a difficult—perhaps even an unhappy—retirement. The reason is simple: Few people who have not developed and cultivated authentic interests during their middle years are able to do so in their 60s, 70s, or 80s. Many people in this category end up bored and disappointed in their retirement, whether they are scraping by on a yearly income of $25,000 or luxuriating in five times that amount.
I’m convinced that if middle-aged people allow too many years to pass without developing new interests or renewing old ones, they may never again be able to tap into their creativity. Much like the 12-year-old left to her own devices on a beautiful summer day, who plaintively calls to a parent, “I’m bored,” retirees who have forgotten how to be interested in new things don’t seem to know how to relearn this incredibly important skill. Sure, after retirement they finally have plenty of time to develop exciting new interests or rediscover an old one, but all they seem to be able to do is go to the doctor and watch TV.
Think back. Chances are good when you were in your teens and 20s, you were interested in all sorts of things. I can remember periods in which I tried on new hobbies, artistic endeavors, and sports at the rate of at least two a month. But as we age and our responsibilities increase, most of us become less interested in new things and gradually lose interest in some of our old pastimes. We may remember fondly when we wrote poetry, climbed rocks, or took painting classes, but we are no longer so adventurous.
How long has it been since you’ve had a genuine new interest? And how much time has passed since you dabbled in an old one? If you can honestly answer yesterday, last week, or even last month, chances are good you are still deeply curious about all sorts of things and make the time to do at least some of them. And it follows that there is a high likelihood you will revel in the extra time your retirement years provide. After all, now you really do have time to make that boat, hike to the top of Mt. McKinley, develop your watercolor skills, or write your book. By contrast, warning flags should be flying if you are currently in your 40s or 50s and do not participate in at least several interesting activities. Or put another way, if besides working you do little more than consume passive types of entertainment while fantasizing that you’ll become more active when you retire, your fantasies are likely to turn out to be just that.
Especially if at any time during your life you thought of yourself as a creative person (painter, musician, poet, or whatever else), I urge you to make a real effort to rediscover or enlarge upon these impulses. The reason is simple: Older artists often do well, commonly experiencing a sustained burst of exciting creativity after 65. And because art is almost by definition of great interest to its creator, artists tend to remain vital and purposeful in their own eyes, which of course is one of the keys to continuing to be respected by others.
Brett Learns New Things
My friend Brett Davis is a successful, seemingly typical middle-aged, college-educated American. In his 40’s, with an executive-level job, Brett is married with two teen-aged sons and lives in a pleasant East coast suburb. But one habit sets him apart. Each year Brett challenges himself to master a significant new skill. Brett’s list of recent accomplishments includes learning to ice skate, play the guitar, and scuba dive. He also started a Toastmaster’s chapter to engage in an organized program of public speaking. He explains his determination to learn new things like this.
“It’s easy to get so comfortable with life that you forget how to ask new questions or do new things. To stay open and interesting, it’s my goal to periodically get outside my comfort zone, even if it means looking foolish. In fact I believe we humans learn best and have the most fun when we give ourselves permission to be dumb. For example, several years ago I attended our company’s annual skating party. As a nonskating son of Texas, I nevertheless took to the ice and predictably flopped, fell, and clowned to everyone’s delight. Over the next year I had the fun of being the butt of lots of friendly ribbing. But without telling any of my coworkers I also enrolled in a skating class. At the next year’s event, I didn’t just surprise my colleagues with my newfound ability to stay on my feet—they nearly fell down themselves when I started skating backwards. The look on their faces was worth every bump and bruise it took to get there.”
Continuing Your Education
We humans are an extremely curious lot—hence the success of all sorts of large organizations dedicated to bringing us news. And it isn’t only current events we are eager to learn about. In every human community the world over, we make it a high priority to teach our children the most important events of the past, going all the way back to the Big Bang (or was it a whimper?).
We hope you enjoyed this material. The rest of the book is available for purchase.