Since the first Baby Boomers have recently turned 60, retirement has been on the minds of everyone. The news is filled with advice for soon-to-be retirees. Today’s retirement though is not your father’s retirement. “The New Retirement” is all about new lifestyle changes and proper planning. A 2002 Harris Poll divded retirees into four categories.
- Ageless Explorers – youthful, empowered, and optimistic. Live life to the fullest. (27%)
- Comfortably Contents – want traditional retirement with relaxation and travel. (19%)
- Live for Todays – active and adventurous. (22%)
- Sick and Tireds – pessimistic, low expectations of retirement. May have poor health. (32%)
It’s the Ageless Explorers and the Life for Todays that are jumping head first into the new retirement. In 2002, it was found that 95% those aged 55 to 64 plan to work after retirement, and the majority want to continue to learn. People are also retiring earlier than ever. Over the past several decades, the number of years working has gone down and number of years in retirement has progressively increased.
Even with less working years, boomers’ financial outlook is good. Average income levels are projected to be higher than current retirees but there will be a widening gap between best and worst off households. The poverty level for boomer households in 2020 are expected to be 6%, half of the 2001 rate. With all this positive news, boomers have to watch out for increased health costs due to the boom in the older population. Boomers are the largest segment of the population with Health Savings Accounts, but more than half of Americans over 45 are more concerned about short-term financial issues than retirement or long-term healthcare.
Lifestyle
Aside from traveling, new retirees are moving abroad, or living in niche communities. Communities range from African-American and Gay/Lesbian communities to those for single residents to golf enthusiasts. Other people give up a permanent residence and travel the country in an RV. The boom in elder population is caused states to being to coax elders to move to their respective states. Even business that start to cater to the aging population can find this a lucrative age cohort.
People have been moving from big cities to small towns, and migrating to new and unexpected places. For years Florida and California were the top two states for retirees to move to. In 2000 Arizona replaced California in the top migration spots.
Work and Finances
AARP says that 80% of baby boomers plan to work after reitirement. They even hold a list of the top employers to work at for those over 50. The new retirement is all about reprograming your time and being active. Part of this is starting a new business like a bed and breakfast. Lots of new retirees are going back to school, earning second degrees, and starting new careers they’ve always dreamed of. New investment tools help make new life options available for new retirees. The Roth IRA and the Health Savings Account are new tools highly recommended to anyone saving for retirement and keeping a cushion for medical costs. With the decline of Medicare and 77 million baby boomers entering the system in 2011, saving for medical and not just lesiure should be top on the list. It is said that in retirement one needs 60 to 80% of ones current income since it costs money to make money.
For more on “the new retirement,” there is a great book with the same title. It’s very useful in the planning of your retirement.
The New Retirement: The Ultimate Guide to the Rest of Your Life by Jan Cullinane, Cathy Fitzgerald
1 Comment
29 Sep 2006 at 17:29
[...] When we stop working, we stagnate, and that is what we need to avoid. People often dream of what they will do when they retire, and they crunch pennies, buy mutual funds, invest in money markets, or buy real estate, all in the name of early retirement. They talk with the friends, family, peers, and co-workers of how they envision their retirement, and the dream of doing nothing, (if you have never seen the movie Office Space, I highly recommend it for tickling your funny bone – the main character hates his job and has a dream about doing nothing) or perhaps doing MANY things such as hiking, traveling, golfing, hobbies, etc. But take my word for it, doing nothing is great for about 5 hours, and then we want to DO something. Even hobbies and fun stuff will wear off, but then we are missing something……labor! We need to work. Share and Enjoy:These icons link to social bookmarking sites where readers can share and discover new web pages. [...]