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Second-Career Plans Scuttled by Illness
Tweet Share on Facebook June 17, 2008 Comment (1)Spencer Johansen, 50, a small-town police chief in Lexington, Ill., wanted to open a barbershop once he became eligible for his pension at age 55. But his plans changed in August 2006 when he was diagnosed with early-onset Alzheimer's disease. For now, he is continuing his work as police chief and wears a Palm organizer on his belt while in uniform to help him remember appointments. A neuropsychologist keeps close tabs on the progression of his disease. But Johansen knows he will be forced to retire when he becomes unable to do his job. "I guess it's not a rosy picture of retirement," he says. "There's no way to prepare for the possible diagnosis of any disease."
Johansen will take in half his current income from disability insurance payments and Social Security disability when he retires. But that will do little to finance college for Johansen's youngest daughter, who will be a freshman at Lincoln Land College in Springfield, Ill. He also recently moved into the four-bedroom home of his wife's family so he and his wife could sell their house.
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Cutting Back on Work to Take Care of Mom
Tweet Share on Facebook June 16, 2008 Comment (1)Janie Scott, 60, an occupational therapist in Columbia, Md., has scaled back her work hours and accepted lower-paying jobs so that she can spend more time taking care of her mother, who has mild cognitive impairment, in Naples, Fla. Her caregiving requires Scott to travel south at least once a month, which not all employers are willing or able to accommodate. "I can't have a five-day-a-week, traditional job," she says. "Because of [my mother's] health situation, the work that I do needs to be very flexible."
Now Scott accepts teaching and writing assignments related to occupational therapy, such as instructing fall-prevention classes at her local senior center one day a week and writing book chapters. "It's a real challenge to find work that is relevant to my years of experience," she says. Scott knows it's important to have a high income in the years leading up to retirement so that her Social Security checks will be larger, but she's having trouble finding work that pays at the level she's accustomed to that is also flexible enough for frequent visits to see her mother.
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Forced into Early Retirement from Corporate America
Tweet Share on Facebook June 13, 2008 CommentJohn Watson, 56, was an international telecommunications manager for DuPont in Wilmington, Del., until he was forced into early retirement three years ago. "There's a homeostasis when you've got a job and a paycheck and you're comfortable, and you just kind of assume it's not going to happen to you," Watson says. "It really comes without warning." Although it wasn't his choice,Watson was given one year's salary and 90 percent of his pension to retire. He's eligible for health insurance through his wife, Janice, who still works at DuPont. After leaving the company, Watson searched for a new job with a comparable salary. "I sent out 23 résumés and got turned down 23 times," Watson says. But, he admits, "I wasn't too anxious to go back to work for corporate America."
Instead, Watson started his own cabinetmaking and custom furniture business, Watsons Woodworking, in his 2 ½-car garage. "I think it is an incredible freedom compared with corporate America, where you are constrained by meetings and teleconferences," says Watson of running his own business. "My hope was that I will make enough money to fill in some gaps for the next five or 10 years."
Watson doesn't bank as much dough as he did during the DuPont days, but he enjoys the creativity of cabinetmaking. And he has some advice for those who find themselves unexpectedly retired: "If you are in a couple, try to live off one salary, so if one person loses a job, you can recover quickly and you can go with the flow."
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Unplanned Retirement
Tweet Share on Facebook June 13, 2008 CommentThe title of this blog is Planning to Retire. But retirement is something that can happen while you are making other plans. Over three quarters of people who were 51 to 61 years old in 1992 lost their jobs, became widowed or divorced, developed new health problems, or were confronted with frail parents or in-laws within a decade, according to an Urban Institute analysis. Any of these circumstances can take a bite out of retirement plans, if not force workers to scrap them altogether.
Each day for the next week I'm sharing the story of someone who retired earlier than planned. If you'd like your unplanned retirement story featured in an upcoming post, please write me at retire@usnews.com and include your phone number. Or you can discuss your story in the comments section.
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Working After Age 62 Can Affect Social Security Payouts
Tweet Share on Facebook June 12, 2008 Comment (35)Dear Planning to Retire,
I make about $45,000 per year. Should I start drawing Social Security even if I have to give half of it back? I just turned 63. I still am working and will probably work for another two years.
If you collect Social Security and earn a certain amount of money by continuing to work, some and possibly all of your benefits can be withheld. But you don't lose those benefits forever. At your full retirement age—for you it's age 66—your benefits will be recalculated to a higher amount. But, in your case, because you are earning well above the earning test limit, the amount is the same as what you would have earned simply by delaying claiming, according to calculations by Hugo Benitez-Silva, an associate professor of economics at the State University of New York at Stony Brook.
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No Surprise: Boomers Don't Want to End Up in a Nursing Home
Tweet Share on Facebook June 11, 2008 Comment (3)If I ever got sick, I think I'd like to be at home with my family. The other option for long-term care is, of course, paid caregivers. But if baby boomers of means have their way, they will be taken care of by a combination of the two, a new survey found.
Some 49 percent of adults between 50 and 70 years of age want to be taken care of at home by both family and professionals, according to a Lincoln Retirement Institute and Mathew Greenwald & Associates online survey of 1,011 adults with household incomes of at least $75,000 or total household financial assets of over $250,000 (not including the value of a home or other real estate). The rest of the boomers preferred long-term care at home with professionals only (35 percent), a nursing home (8 percent), and at-home care with family only (7 percent).
Tell me, who would you like to take care of you in your final days?
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Slashing Expenses Can Make Your Nest Egg Last Longer
Tweet Share on Facebook June 10, 2008 CommentRetirees don't have to commute, dry clean expensive work clothes, or live in a pricey suburb or city just because it's near work. So right off the bat, you can downsize a few major expenses. And if you're lucky, the kids are out of the house and supporting themselves, so you might be able to get by with a smaller house or condo. Here are some other ways retirees are cutting back in retirement to save money, according to a Thrivent Financial and Action Market Research telephone survey of Americans age 60 to 74.
- Giving fewer or smaller gifts to family members (37 percent)
- Traveling less or closer to home (37 percent)
- Shopping more often with coupons or at sales (36 percent)
- Eating out less often or at less expensive restaurants (32 percent)
- Living in a smaller house (18 percent)
- Walking, bicycling, or taking public transportation (15 percent)
- Moving in with children (3 percent)
Source: Thrivent Financial, 2008.
Retirees, how are you cutting back?
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Baby Boomers: Still Too Scared of Stocks
Tweet Share on Facebook June 9, 2008 Comment (4)All retirement savers face this conundrum: Equity investments could lose principal during a bad year. But the interest on risk-free savings vehicles like certificates of deposit may not keep up with inflation. Most baby boomers are choosing to err on the side of caution, according to an online survey.
Many more workers age 50 plus say they understand and feel comfortable with savings vehicles like savings bonds and certificates of deposit, where there is little risk involved, than with more volatile investments like stocks and real estate, according to a Transamerica and GfK Roper Public Affairs and Media online survey of 2,015 working adults. Some 46 percent of the older adults are not very willing to put money into investments with any risk associated with them, which makes for much lower returns, Transamerica found.
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Retirement Goals Rated
Tweet Share on Facebook June 9, 2008 CommentIt's nice to dream about where you might live in retirement, all the great books you'll finally have time to read, and the new hobbies you'll pursue. But when Transamerica and GfK Roper Public Affairs and Media asked 2,015 adults over age 50 about their top priorities as they transitioned into retirement, most were concerned with just getting by. The results:
Top Retirement Goals
1. Having a steady monthly income (90 percent)
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The Presidential Candidates on Retirement
Tweet Share on Facebook June 6, 2008 Comment (2)Retirement security might not be a voting issue the way the Iraq war, healthcare, and the economy are for many people. But Darden Business School professor Ronald Wilcox, a former Securities and Exchange Commission economist and author of Whatever Happened to Thrift? Why Americans Don't Save, and What to Do About It, recently blogged about the presidential candidates positions on retirement. The highlights:
Barack Obama supports a savings-match program for lower-income Americans that would give a 50 percent match for the first $1,000 of savings to people who make less than $75,000 annually. He also proposes a federally mandated IRA plan that would require small businesses to allow employees access to a government-sponsored retirement savings plan.The savings-match program proposed by Hillary Clinton (she hasn't officially withdrawn yet) would match funds dollar-for-dollar up to $1,000 for families earning under $60,000. She's also for an "American Retirement Account" plan, which would allow all Americans to contribute up to $5,000 to an IRA on a tax-deferred basis, regardless of their employment situation.
