MONEY retirement planning

Why I Want a Real Retirement, And You Should Too

Senior on sailboat
Monika Lewandowska—Getty Images

Working longer may improve your finances. But that doesn't mean it will make you happier.

Looking forward to retirement seems irrational these days. Rising life expectancies and the increasing funding problems for Social Security and private pension plans have led to the recommendation that we defer retirement past the traditional age of 65—perhaps into our 70s and beyond. It’s getting to the point where many in my generation have started to assume that they might never retire at all.

It’s true that delaying retirement into your 70s will likely improve your financial situation. Yet in an age when work has come to permeate most of our waking hours, it seems even more important to delineate at least a decade when you’re still healthy enough to both reap the benefits of that hard work and devote your time to other pursuits. And yet the concept of a real retirement has come to symbolize financial irresponsibility or laziness or both.

This was not always the case. Over the last century, the retirement age has gone through enormous fluctuations, mostly dictated by public and corporate policy, not personal preference. In the period of 1950 to 1955, the median age of retirement was 66.9 for men and 67.7 for women, according to the U.S. Bureau of Labor Statistics. But changes in defined benefit plans increasingly encouraged early retirement as a way to cut the work force, and by 1990-1995 the median retirement age had dropped to about 62 for both men and women.

But as defined contribution plans such as 401(k)s have overtaken traditional pension plans, employers no longer have as much sway over the timing of their workers’ retirements. Instead, that decision is more often dictated by savings rates and the financial markets that drive investment performance. Once again employment rates for Americans ages 65 to 69 and 70 to 74 have begun to rise, a trend only accelerated by the Great Recession. As of September, 60% of workers age 65 or older had full-time jobs, up from about 55% in 2007.

Meanwhile, for anyone born after 1960, the “full retirement age” (meaning the age you get full Social Security benefits) is now 67, and there are strong incentives to delay benefits until 70.

The consequences of working longer on our health and well-being are largely unknown, but researchers at the University of Southern California have recently examined data from 12 countries, including the U.S., and their preliminary results are telling. Contrary to conventional wisdom that working longer provides a buffer for mental health, retirement actually reduces depression, their analysis shows. What does increase the probability of depression, and reduces life satisfaction, is not being bored by not working, but health conditions that impact the ability to go about your daily activities. While household wealth, being married and one’s level of education are all positively related to life satisfaction, income alone does not seem to have a significant effect on depression or life satisfaction.

Granted, many of us still won’t have a choice about when we retire. We may not be able to afford to stop working when we want to, or we may get forced into early retirement by the loss of a job. But we may also want to take a look at whether the work-until-you-drop ethos has become more of a cultural commandment then a financial imperative—“I’d get bored if I didn’t work” is the new corollary to the often-uttered “I’m crazy busy.” It’s as if retirement has become so elusive that we’ve decided to tarnish the whole concept. But there is nothing wrong with looking forward to retirement if one has done a decent amount of saving and planning.

I love working, but two decades from now I think I would prefer to downsize rather than stay in the workforce an extra five or 10 years in order to maintain my standard of living in retirement. (From a purely balance sheet perspective, if continuing to work has adverse effects on well-being, then the fiscal savings from delayed retirement may be offset by increased health expenditures.) Medicine may be prolonging our life, but that doesn’t necessarily mean that it’s improved the quality of the later stages of that life. I want to make sure that I have not just the time also but the ability to enjoy more than just a few years when work is no longer the priority.

Konigsberg is the author of The Truth About Grief, a contributor to the anthology Money Changes Everything, and a director at Arden Asset Management. The views expressed are solely her own.

TIME Aging

How Moodiness and Jealousy May Lead to Alzheimer’s

Researchers say certain personality traits, like jealousy, worry, anxiety and anger, can double a woman’s chances of developing Alzheimer’s

We’re familiar with many of the brain-related factors that can contribute to Alzheimer’s disease—letting thinking networks go inactive, putting off exercise and healthy eating, having few social connections, enduring head injuries and genetic factors. But what about personality? Can the way you look at the world affect your risk of developing the neurodegenerative disorder?

Dr. Ingmar Skoog, professor of psychiatry and director of the research center on health and aging at the University of Gothenburg believes the answer is yes. In a paper published in the journal Neurology, he and his colleagues show that women with certain personality characteristics in middle age were twice as likely to have Alzheimer’s nearly 40 years later.

MORE: New Research on Understanding Alzheimer’s

“Getting Alzheimer’s disease is some sort of sum of a lot of different damages to the brain, and different things happening to the brain,” he says. “[Personality] is one of them.”

Specifically, a suite of features linked to what mental health experts call neuroticism showed the strongest connection to Alzheimer’s. Skoog and his colleagues tapped into a database of health information involving 800 women who were 38 years to 54 years old in 1968, when they filled in personality questionnaires and agreed to come in periodically to evaluate their cognitive functions. The personality evaluation placed women on a spectrum of neuroticism and extraversion; those showing more neuroticism included women who reacted more emotionally to events and experiences, worried more, showed lower self esteem and were more likely to express jealousy, guilt and anger. Those who were more extroverted showed high levels of trust, gregariousness and fewer emotional peaks and valleys.

MORE: New Insight On Alzheimer’s: What Increases Your Risk

At each of the four follow ups over the next 38 years, the women reported their stress levels—and women with higher neuroticism scores consistently showed higher levels of stress than those with lower scores.

Skoog believes that stress is the linchpin between the personality traits and Alzheimer’s dementia; previous studies have connected stress to dementia, and he says that the neuroticism characteristics are highly correlated to stress. “It seems like the personality factor makes people more easily stressed, and if people are more easily stressed, then they have an increased risk of dementia,” he says.

What’s more, when he controlled for the effect of stress, the association between neuroticism and Alzheimer’s disappeared, strengthening the idea that personality may lay a foundation for being more vulnerable to the effects of stress. Higher stress, particularly if it’s persistent as it is with certain personalities, can bathe the brain in hormones like cortisol. Those can damage blood vessels and cells in the brain that can then make Alzheimer’s more likely.

MORE: Scientists Are Getting Closer to a Blood Test for Alzheimer’s

The results hint that people can lower their risk of Alzheimer’s not just by keeping the brain active and improving social connections, as earlier work suggests, but by addressing stress-related personality factors as well. That, however, may require being aware of your later Alzheimer’s risk as early as during childhood, when personalities are forming. “Personality is something that occurs early in life, but you may be able to do something about it,” says Skoog. Especially when it comes to stress and how people respond to stress, interventions such as psychotherapy, for example, can help people to cope in healthier and less harmful ways.

He doesn’t believe that addressing stress and traits like jealousy and worry alone will protect a person from developing Alzheimer’s, but, he says, “it’s important to try to find as many factors as you can that contribute to common disorders. The more factors we can do something about, the more we can reduce risk quite substantially.”

TIME Aging

Norway Is the Best Place to Grow Old

163252583
Westend61—Getty Images/Brand X

But a third of countries are not meeting the needs of their growing aging populations

Growing old is a pleasure—if you’re in Norway, that is. A new report looking at the social and economic wellbeing of older people in 96 countries reveals that Norway is the happiest place to age, followed by Sweden, Switzerland, and Canada.

It’s not as much fun elsewhere. The report, called the Global AgeWatch Index, found that a third of countries are ill equipped to deal with increasingly large aging populations. The report says that in low and middle income countries, only a quarter of people over age 65 receive a pension. Countries on the low-end of the list lacked programs for free health care and chronic disease treatment, community centers and subsidized transport.

The report by HelpAge International and the University of Southampton shows that by 2050, 21% of the global population will be over age 60. While more people are living longer, if people are also living sicker or without support, that takes a serious economic toll. In the U.S. alone, 2012 data noted that Social Security, Medicare and Medicaid eat up about 40% of all federal spending and 10% of the nation’s gross domestic product.

The authors note that Norway claimed the top spot because it has well-developed organizations for the elderly, a long history of state welfare and strong social media campaigns that create public awareness of age-related issues. The worst country for the elderly is Afghanistan, according to the report, and the United States ranked seventh overall.

Here’s the entire Global AgeWatch ranking:

  • Norway (1)
  • Sweden (2)
  • Switzerland (3)
  • Canada (4)
  • Germany (5)
  • Netherlands (6)
  • Iceland (7)
  • United States (8)
  • Japan (9)
  • New Zealand (10)
  • United Kingdom (11)
  • Denmark (12)
  • Australia (13)
  • Austria (14)
  • Finland (15)
  • France (16)
  • Ireland (17)
  • Israel (18)
  • Luxembourg (19)
  • Estonia (20)
  • Spain (21)
  • Chile (22)
  • Uruguay (23)
  • Panama (24)
  • Czech Republic (25)
  • Costa Rica (26)
  • Belgium (27)
  • Georgia (28)
  • Slovenia (29)
  • Mexico (30)
  • Argentina (31)
  • Poland (32)
  • Ecuador (33)
  • Cyprus (34)
  • Latvia (35)
  • Thailand (36)
  • Portugal (37)
  • Mauritius (38)
  • Italy (39)
  • Armenia (40)
  • Romania (41)
  • Peru (42)
  • Sri Lanka (43)
  • Philippines (44)
  • Viet Nam (45)
  • Hungary (46)
  • Slovakia (47)
  • China (48)
  • Kyrgyzstan (49)
  • South Korea (50)
  • Bolivia (51)
  • Columbia (52)
  • Albania (53)
  • Nicaragua (54)
  • Malta (55)
  • Bulgaria (56)
  • El Salvador (57)
  • Brazil (58)
  • Bangladesh (59)
  • Lithuania (60)
  • Tajikistan (61)
  • Dominican Republic (62)
  • Guatemala (63)
  • Belarus (64)
  • Russian (65)
  • Paraguay (66)
  • Croatia (67)
  • Montenegro (68)
  • India (69)
  • Nepal (70)
  • Indonesia (71)
  • Mongolia (72)
  • Greece (73)
  • Moldova (74)
  • Honduras (75)
  • Venezuela (76)
  • Turkey (77)
  • Serbia (78)
  • Cambodia (79)
  • South Africa (80)
  • Ghana (81)
  • Ukraine (82)
  • Morocco (83)
  • Lao PDR (84)
  • Nigeria (85)
  • Rwanda (86)
  • Iraq (87)
  • Zambia (88)
  • Uganda (89)
  • Jordan (90)
  • Pakistan (91)
  • Tanzania (92)
  • Malawi (93)
  • West Bank and Gaza (94)
  • Mozambique (95)
  • Afghanistan (96)
MONEY Social Security

How Student Loans Are Jeopardizing Seniors’ Retirements

Senior overwhelmed with debt
Chris Fertnig—Getty Images

Old debts are haunting retirees, as the federal government goes after their Social Security checks for repayment.

It’s a rude awakening for a growing number of seniors: They file for Social Security, then discover that the federal government plans to take part of their benefit to pay off delinquent student loans, tax bills, child support or alimony.

This month the U.S. Government Accountability Office (GAO) released findings on the problem of rising student debt burdens among retirees—and how the government goes after delinquent borrowers by going after wages, tax refunds and Social Security checks.

Under federal law, benefits can be attached and seized to pay child support and alimony obligations, collection of overdue federal taxes and court-ordered restitution to victims of crimes. Benefits also can be attached for any federal non-tax debt, including student loans.

It seems the student loan crisis isn’t just for young people. The GAO found that 706,000 of households headed by those aged 65 or older have outstanding student debts. That’s just 3% of all households, but the debt they hold has ballooned from $2.8 billion in 2005 to about $18.2 billion last year. Some 27% of those loans are in default.

If you’re among the 191,000 households that GAO estimates have defaulted, your Social Security benefits can be attached and seized.

“When that happens, the federal government pays off the creditor, and now it’s a debt to the federal government,” says Avram L. Sacks, an attorney who specializes in Social Security law. “So they can go after you for the loans—and now that students are reaching retirement age, long-forgotten debts are coming back to haunt them.”

The amounts that can be seized are limited, and the maximum amounts vary. In the case of any federal non-tax debt, including student loan debt, the government can take up to 15% of your monthly Social Security check. That’s a painful bite for low-income seniors living primarily on their benefits.

The law prohibits any attachment due to a federal non-tax debt that reduces a monthly benefit below $750. (Federal tax debt is not subject to this limitation.) Retirement and disability checks can be attached, but Supplemental Security Income—a program of benefits for low-income people administered by the Social Security Administration—is exempt.

In alimony or child support situations, garnishment is limited to the lesser of whatever maximums are set by states or the federal limit. The federal limits vary from 50% to 65% depending on how much the debt is in arrears and on whether the debtor is supporting a spouse or child. In victim restitution cases, the limit is 25% of the benefit.

Benefits can be deducted through an “administrative offset” against the amount the government sends you or through garnishment. In the case of garnishment, banks are required to protect the two most recent months of benefits that have been paid into your account, and the bank must notify you within five days that benefits have been attached.

Sacks advises people who have had benefits attached to establish stand-alone bank accounts for their Social Security deposits. “It’s much more simple and safe, and makes it much easier to trace funds,” he says.

Sacks says the government has been going after benefits more often because of changes in federal law and court rulings that have widened its powers. He urges people in their pre-retirement years to make every effort to pay off delinquent debts.

“It can be painful, but consider going to legal aid or finding a non-profit debt counselor who can help negotiate repayment. The worst thing is to ignore it.”

The government can go after delinquent debt while you’re working—but that requires a court judgment. ” are a known asset over which the federal government has total control,” says Sacks.

He adds that people sometimes are blindsided by garnishment for unpaid debts they had forgotten about. If you’re not sure about a federal debt, contact the U.S. Department of the Treasury’s Bureau of the Fiscal Service (800 304-3107), which serves as a clearinghouse for debts.

If the bureau shows a debt that you dispute, contact the agency that is owed. Do the same if your benefits already have been tapped. “Don’t try to deal with the Social Security Administration,” says Sacks. “They don’t have direct responsibility for the attachment.”

Finally, Sacks notes funds not in the bank can’t be garnished. Most people don’t hang on to Social Security benefits for long—they’re used to meet living expenses. “I hate to urge people to keep money under the mattress, but money that’s been sitting in a bank account for more than two months is exposed to attachment.”

TIME Aging

‘Senior Moments’ Could Be Early Signs of Dementia: Study

494376943
Getty Images

Scientists hope that early identification of warning signs may help prevent memory problems from becoming so severe

So-called senior moments, like failing to recall your missing sunglasses are perched on your head, might not be just benign mishaps, but early harbingers of Alzheimer’s disease, reports a new paper.

The study, published in the journal of the American Academy of Neurology, suggests that self-reported worries about memory lapses are strong predictors of a later diagnosis of dementia. The research indicates that it takes about 12 years from initial signs of forgetfulness for the problem to become severe enough to be called dementia.

Of course, forgetfulness is a natural part of aging, and a spotty memory by no means guarantees that bigger problems are in the works, the researchers say. However, that does not mean concerns about errant sunglasses should necessarily be brushed off.

That’s because “there may be a significant window of opportunity for intervention before a diagnosable problem shows up,” Richard Kryscio, the study’s lead author and associate director of the Alzheimer’s Disease Center at the University of Kentucky, said in a statement. “Certainly, someone with memory issues should report it to their doctor so they can be followed.”

Right now, there are no definitive ways of preventing dementia, though early research suggests that a healthy lifestyle — including exercise, good eating habits and abstention from smoking — might help ward off the disease, the National Institutes of Health says. Antianxiety drugs have also recently been fingered as possibly increasing a user’s risk of developing memory problems later in life.

In the study, scientists at the University of Kentucky asked 531 people, average age 73 and without dementia, if they had noticed any changes in their memory in the past year.

People who reported such changes were about three times more likely to develop dementia than those who reported no such symptoms. In fact, of the 1 in 6 participants who developed dementia, 80% of those first reported memory changes.

Meanwhile, separate research published in Cognitive and Behavioral Neurology suggests that people with dementia may not remember specific events, like a visit from a relative, but do remember how those forgotten events made them feel.

“This confirms that the emotional life of an Alzheimer’s patient is alive and well,” Edmarie Guzman-Velez, lead author and a doctoral student in clinical psychology at the University of Iowa, said in a statement. “Our findings should empower caregivers by showing them that their actions toward patients really do matter.”

In the study, 17 people with Alzheimer’s disease and 17 healthy participants were asked to view 20 minutes of sad and happy movies. About five minutes after each movie clip finished, participants took a test on what they’d watched: though participants with dementia remembered much less about films than did the nondementia participants — one didn’t remember watching any movies — they still reported heightened levels of either sadness or happiness for up to 30 minutes after watching the films, according to the research.

In general, the researchers said, sadness lasted longer than happiness.

TIME Aging

You Asked: Do Brain Games Really Improve Memory?

Illustration by Peter Oumanski for TIME

Unhand the crossword: it's not your golden ticket to a lifetime of quick wit and perfect recall

Games sure seem like a good way to work your brain out, but don’t put your stock in Sudoku. “They target very specific cognitive abilities, but they don’t transfer to clarity of thinking, problem solving, planning—all the complex skills that really matter,” explains Dr. Sandra Bond Chapman, chief director of the Center for Brain Health at the University of Texas at Dallas and author of Make Your Brain Smarter.

When it comes to keeping your brain real-world strong, research has shown–over and over again–two activities to be worth your time. The first is aerobic exercise, says Dr. Karen Li, head of Concordia University’s laboratory for adult development and cognitive aging.

By bolstering your cardiovascular fitness and blood circulation, exercise nourishes your brain with the nutrients and oxygen it needs to perform optimally, Li says. But physical activity offers more than just brain fuel. “Some brain regions and functions seem to benefit more than others,” she explains–specifically the frontal lobe, responsible for high-level skills related to complex processes like multitasking. “That tells us aerobic exercise helps the brain work more efficiently.”

Whether you enjoy running, speed walking, gardening or hiking, “as long as you sweat a bit and your heart rate goes up, that’s what your brain needs,” Li adds. Chapman agrees. “Skip the Sudoku and get out and exercise,” she says. (The Centers for Disease Control and Prevention recommends all adults get at least 150 minutes of moderate-intensity aerobic exercise a week.)

Along with physical activity, your brain needs mental stimulation to stay hale and fit. And when it comes to mental stimulation, novelty is important, Li explains. Here’s why: The more you use your mind to perform a task—whether it’s cooking your favorite dish or driving to the supermarket—the less effort your brain requires to complete that task. “If you feel like your brain’s on autopilot most or all of the time, that’s an indication that you need to increase the challenge a little bit,” she says.

One of the best ways to do that is to stay socially active, Li says. “Following and contributing to a conversation requires a lot of mental prowess.” Visiting intellectually invigorating places, like museums or cultural centers, and learning new skills are also great ways to keep your brain in shape. Even mixing in some variety when it comes to your favorite activities—like trying out a new recipe or cooking technique—will keep your mind off autopilot.

But there’s a catch. “It’s important that you feel genuine interest in these activities,” Li says. Practicing a foreign language for 30 minutes a day is a good way to challenge your brain, but if you feel meh about one day speaking fluent French, your mind won’t benefit as much as it would from something that truly excites or interests you.

If museum visits or learning new languages doesn’t float your boat, Chapman offers an alternate way to fire up your idling brain. “Challenge yourself to think in top-down, complex ways as you go about your day,” she recommends. When you watch a television show or read an article (like this one), pause once you’ve finished to really dissect the information you’ve just encountered. “Zoom out, then zoom in,” Chapman says. Start as broadly as you can (this is a health article) and work your way down (about the brain) until you’ve gotten to the nitty gritty—things like themes or lessons you could take away from what you’ve just seen or read (surely, too numerous to list).

“People take in a lot of information—probably more than we ever have before—but it’s not making us smarter because we’re not spending much time making sense of it,” Chapman says. “Try to push yourself out of your mental comfort zone by asking what about the information matters.”

This is especially important for older retired adults who aren’t faced with the everyday intellectual challenges presented by work or school. “We’re all going to be living longer,” Chapman says. “Along with aerobic exercise, engaging your brain in complex ways is absolutely necessary to keep your mind sharp in the second half of life.”

TIME society

30 Is the New 50: Old Age Is Killing My Dating Life

183958962
Peter Dazeley—Getty Images

My career successes, my triumphs as a human being, are trumped by the fact my looks—and my ovaries—have a shelf life

xojane

This story originally appeared on xoJane.com.

“You know,” he says. “It’s tough for people our age.”

It’s 1 a.m. on a Monday, and I am currently on the phone having an argument with a guy I’d been on only four dates with, three of them good. One of them—the last—was less good, given he had gone MIA for the better part of three weeks and I had a sneaking suspicion he had a girlfriend.

We hadn’t slept together, but the kisses had been the type of kisses you walk away from with shaky knees and blind hope. There was something there, and we both knew it, which is why we were attempting to hash things out over the phone at some ungodly hour. Because at our age, we’re adults, and things matter more. The mistakes leave marks.

Alex is 38. I’m 30. Technically, there are no “people our age.” But I’m starting to feel that a 30-year-old woman might as well be a 40-year-old man, though infinitely less desirable, culturally speaking.

At 40, a man is well into hitting his stride, something the guy I’m arguing with is all too aware of, as evidenced when he professes on multiple occasions, “I’m an amazing guy.” “We’re killing it. KILLING IT,” he tells me, while explaining that he’s been caught up in his rapidly expanding architecture firm.

Alex sees his stock rising. For a man, age brings success, wisdom and the Hollywood-approved wrinkles of Robert Redford. And, while I too find that my career is on the up, it doesn’t matter, because time, for a woman, is hardly as kind as it is to a man. My career successes, my triumphs as a human being, are trumped by the fact that my looks—and my ovaries—have a shelf life. Biology and Sociology 101.

Interestingly enough, Alex and I, with nearly a decade between us, are two people on the same page in terms of what we are looking for in a relationship. In New York, men approaching their 40s begin to feel the weight of time more acutely, something women are confronted with the moment they start their first period. While boys are still sitting in the school parking lot burping up Cokes and Doritos, young girls are in some ways exposed to the long, faint shadow of their mortality, a life defined by precise timing and narrow windows—girlhood and fertility immediately presented to you as finite and limited. Everything has its end.

Men, on the other hand, start to engage with their bodies only decades later, when something goes wrong. A slow-healing broken arm, a herniated disc, high blood pressure: These are the wake-up calls, when aging men begin to wrestle with the thought of impending death, or at least not wanting to be an old dad. Overnight, their biological clocks start ticking. They want kids. They want a partner. Their timer has gone off. DING DING DING.

After decades after messing around, they’re ready to settle down. Which is precisely where Alex was at about a year ago with his ex-fiancée, who—kudos to Alex—was four years his senior and under the crushing pressure of having kids right away, lest the opportunity pass them by altogether—or, more precisely, pass her by. Alex couldn’t handle the idea of having kids right away and broke it off, because he had the luxury his fiancée did not: namely, time. And the ability to eventually, when he was ready, find someone 15 years younger to have children with.

Which brings us to the point when he finally—after nearly an hour on the phone explaining that he’s been so hot and cold because he’s too busy with work, because he’s very into expanding his business, because he’s shy—admits he’s been seeing some 20-something girl named Anouk for the past few months.

This, by the way, follows this part of the conversation by about 20 minutes:

Alex: Well, what do you want?

Me: I want to love someone and I want them to love me.

Alex: You? You think you’re lovable? You think someone can fall in love with you? You’re so guarded. How can anyone fall in love with someone so guarded?

Alex, of course, self-professed amazing person that he is, is not very well versed in Newton’s Third Law and its role in relationship physics. I was guarded because he did things that made me sense he had a girlfriend. Which he did. But that’s not his fault. Because Alex the Architect is amazing!

As though any amount of talking is going to make this better, Alex continues to tell me about Anouk, who doesn’t mind his going on dates with other women because he “doesn’t love her,” and who he is dating precisely because she’s not looking for anything at all.

It’s this logic that has most of my 30-something guy friends dating girls fresh out of college. Girls who, in my experience, are less impressive, less striving, less volatile, less successful, less intimidating, less questioning, less pressing, less complex, less damaged, less opinionated, less powerful, less womanly. They are less, and, to a guy not ready for anything—like most of the guys I have dated in New York—less is more.

A 30-year-old woman is an undertaking, and it’s the real reason Alex has been putting me on the back burner for the past two months, telling me that I’m amazing and that he’s interested and then disappearing to hang out with a 23-year-old instead. Age ain’t nothing but a number, until it’s a number someone else doesn’t want to deal with.

Jenny Bahn is a writer and editor (and former model) living in a yet-to-be-ruined part of Brooklyn. You can find her work on V Magazine, CR, The Style Con, Lady Clever, Harry’s, and, of course, on xoJane.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

MONEY retirement planning

Why Housing Costs Are the Biggest Threat to Your Retirement

House on top of cash
Caroline Purser—Getty Images

We should be looking at smaller "starter" homes as our "stay put" homes.

If there is one thing we have been trained to fear about retirement, it’s crippling medical bills that threaten to force us out of our homes and decimate our nest eggs. But it turns out that we might be better off worrying about our future housing expenses, as these costs are the single largest category of spending in retirement.

Moreover, the costs of maintaining a home remain stubbornly high as we age, according to a new analysis by the Employee Benefit Research Institute. For those 75 and older, housing expenses accounted for a whopping 43% of spending, even as other expenditures (except for health care) dropped.

Time was that retirees were supposed pay down their mortgages or drastically downsize their homes before retirement. But that behavior has changed, perhaps as a result of the refinancing boom or the housing crash—or both. According to the Consumer Finance Protection Bureau, more people are carrying mortgage debt into their retirement years, up from 22% in 2001 to 30% in 2011.

Even as the rate of homeownership has remained stable, the median amount owed on mortgages for people aged 75 and older increased 82% during that same decade, from $43,000 to $79,000. Delinquency in paying mortgages and foreclosures also greatly increased for seniors from 2007 to 2011.

The lesson in all this is that while financing one’s home can be hugely beneficial, mortgages can grow into significant burdens when you’re living on a fixed income. The time to stretch yourself financially on a home is not when you’ve already left the workforce and have no way to make more money.

It’s not just larger mortgages that saddle retirees—it’s everything that comes with homeownership, including property taxes, homeowner’s insurance, home repairs, housecleaning, gardening and yard services. At the same time, transportation, entertainment and travel expenses all tend to decline as a natural course of retirement.

It seems that people have an easier time forgoing vacations and restaurant dining than they do square footage and lawns, which is understandable. The comforts of home can bring great stability during a time of transition. But as we struggle to figure out how much money we will need in retirement, we might need to consider how to defray the expense of these patterns.

For those in mid-career, now is the time to get control of our mortgage costs. As a recent study by Pew Charitable Trusts shows, Gen X has lower wealth than their parents did at their age, in large part because they hold nearly six times more debt, including student loans, unpaid medical bills and credit card balances. And that’s despite having generally higher family incomes than their parents did.

Given these headwinds, we may want to rethink the American way of constantly trading up to larger houses through our 40s and 50s. The more we grow accustomed to more luxurious living, the harder it will be to downsize when it makes sense. Perhaps instead of looking at smaller houses merely as “starter homes,” we should be looking at them as “stay put” homes instead.

Millennials face a different challenge. After taking longer to get started in their careers, they will end up buying houses later in life, which means they risk carrying significant mortgages into retirement. They would benefit from not biting off more than they can chew—putting more cash down than the minimum, not buying more house then they can really afford, and making sure to max out out their 401(k)s or IRAs. Home equity can be an excellent investment, but only if it enhances rather than jeopardizes financial security—now and in the future.

Konigsberg is the author of The Truth About Grief, a contributor to the anthology Money Changes Everything, and a director at Arden Asset Management. The views expressed are solely her own.

MONEY Second Career

When You’re Bored Silly in Retirement

140918_RET_Boredom
Martin Diebel—Getty Images

After taking a break from your career, you may need a break from retirement. Here's how three retirees found their next act.

Ah, retirement! Playing golf whenever you like. Fishing when the mood strikes. Cocktails in the afternoon and barbequing on the patio. But what do you do when you try out retirement and you’re bored stiff?

Ask Ken Howard, 67, of Greer, S.C., who built a successful trash hauling business and sold it to Waste Management in 1997. “I was really looking forward to getting rid of all the everyday headaches that come from running a company,” Howard recalls. So he built a house on a golf course, but soon found that after “playing a good bit of golf I got bored.”

His retirement lasted about five months.

Howard then bought a car wash…and then another….and then another. He now has eight. He has also bought a septic pump business (largely run by his son and nephew) and owns a small real estate investment company.

“I still get excited about cutting a deal,” he says. “Doesn’t matter if it’s $200 or $200,000.” These days, Howard says, he spends a lot of time at his family’s lake house, “but when I am in town I’m usually at the office.”

Even Del Webb Got Bored

Former utility executive Jackie Hauserman, 72, took a retirement package in 1998 when her company, Centerior Energy, was bought. She moved from Ohio to Florida, first to Naples and then to Bonita Bay. Retirement didn’t take, so Hauserman got a real estate license in 2001, at 59, and has been selling for John R. Woods Properties ever since. “I have been really busy. It is fun,” she says.

Even Del Webb, developer of America’s most famous retirement community — Sun City, near Phoenix, Ariz. — couldn’t live the life of leisure. A 1962 Time cover story about him said: “Del Webb, the hulking, slope-shouldered, long-striding 63-year-old who hates to be called Delbert, could not stand the life in one of his own Sun Cities for more than a few days — or a few hours.” He preferred working.

Here’s the thing I’ve learned while researching my new book, Unretirement: Most people desire to live their third age doing something between full-time work and full-time golf. And many new retirees find themselves easily bored without working part-time, even if they don’t need a paycheck.

Certainly, that sentiment was repeatedly expressed at a recent talk I gave at Verrado, a new multigenerational development outside Phoenix, where residents found the initial joy of sleeping in and enjoying an early cocktail faded with time. All were now working part-time or looking for the right retirement job.

The Shock of the New

The swing from racing to embracing leisure to seeking work isn’t really surprising. Put it this way: You spend many years holding down a full-time job (or multiple part-time jobs), so freedom from bosses and job stress is liberating at first. Many people have a bucket list of delayed projects and postponed travel, too. But… Your career and the expertise you’ve built up over a lifetime are also a big part of who you are.

So putting it all behind you can be a shock.

“After awhile, you then wake up and something isn’t quite right,” says Joel Larsen, a certified financial planner at Navion Financial Advisors, in Davis, Calif. “Successful retirement means finding fulfillment and meaning. And a lot of fulfillment and meaning comes from being good at what you do.”

4 Myths of Aging and Retirement

His insight echoes the results from the recent Merrill Lynch survey, Work in Retirement: Myths and Motivations, Career Reinventions and the New Retirement Workscape.” Conducted in partnership with Age Wave, the demographic consulting firm, the survey disputes four popular myths about aging. They are:

  • Retirement means the end of work
  • Retirement is a time of decline
  • People only work in retirement because they need the money (the reality: meaning and purpose matter, too)
  • New career ambitions are only for young people

I’ve grown convinced that most people need to take a break from their careers — they need to retire — before they can Unretire. It takes a break to figure out the next stage.

Adopting a Fresh Perspective

“You have to get out of the work mindset and take a fresh perspective,” says Ellen Griggs, 59, an excellent example of someone who has taken deliberate steps toward Unretirement.

Griggs had a successful career in finance with some storied firms (Paine Webber and Strong Capital Management among them) as Chief Investment Officer, Chief Operating Officer, Client Advocate and Investment Consultant. In 2011, at 56, Griggs took a year off, traveling spending time with her family and working on a 160-year-old home on Cape Cod.

She also hooked up with Boston-based New Directions, a career transition organization focused on helping executives and professionals figure out what’s next. “During my career I had never been introspective about what I was going to do when I retired,” she says. With New Directions, “I got to kick the tires.”

She’s since ended up filling her days with a mix of for-profit and not-for-profit activities, including being a member of the philanthropic trust board at the Boston Medical Center and a board director at Evanston Capital.

How to Beat Boredom in Retirement

So, what should you do when playing golf isn’t enough and you want more meaning and purpose in retirement?

Reach out. Talk to your network of friends and former colleagues who know your skills and strengths; ask them what they think you should do next.

If you’ve decided what field you’d like to migrate into, part-time, attend a local industry meeting and find out how others made their transition. This is a low-cost way to glean information and make contacts.

Potentially even more powerful is hooking up with similarly challenged retirees who’ve decided to put their leisure days aside.

For instance, Experience Matters in Phoenix matches talented private sector workers looking for their next act with community-based nonprofits. Similarly, Shift is a Twin Cities-based organization with a goal of guiding midlife life transitions toward “purpose, passion and a paycheck.” And the Encore Fellowships Network is another path for experienced professionals who want to devote time at social-service organizations.

Another resource: your local community college. These schools are creating courses and meeting spaces for boomers looking for a next act. You can look up programs near you at the website for the American Association of Community Colleges’ Plus 50 program.

It’s a safe bet that in coming years, people will talk less about golf and leisure in retirement and more about preparing for a new stage of productive and creative work in their Unretirement.

Chris Farrell is senior economics contributor for American Public Media’s Marketplace and author of the forthcoming Unretirement: How Baby Boomers Are Changing the Way We Think About Work, Community, and The Good Life. He writes about Unretirement twice a month, focusing on the personal finance and entrepreneurial start-up implications and the lessons people learn as they search for meaning and income. Tell him about your experiences so he can address your questions in future columns. Send your queries to him at cfarrell@mpr.org. His twitter address is @cfarrellecon.

More from Next Avenue:

What Retirement Is Really Like

Avoid Living Unhappily Ever After in Retirement

Know Your Level of Activity for Retirement

TIME Aging

New Insight On Alzheimer’s: What Increases Your Risk

The two seemingly unrelated conditions may be driven by similar unhealthy states, including high blood pressure and diabetes.

The risk factors for the neurodegenerative disease affecting more than 5 million Americans aren’t all in the brain. And a new report from Alzheimer’s Disease International highlights the connection between the disease of the brain and heart disease, says Heather Snyder, PhD, director of medical and scientific operations for the Alzheimer’s Association. In the report, blood pressure, diabetes, and smoking are highlighted as risk factors for Alzheimer’s disease and dementia, which strike women far more than men. There’s other evidence that obesity and sedentary behavior might play a part.

Many people view Alzheimer’s as a disease over which they have no control. But while factors like age and genetics do contribute to its development, the latest data indicate that other factors, which can be modified, may also be important. For example, hypertension in middle age may increase dementia risk, and mid-to-late-life diabetes is also associated with increased risk for all kinds of dementia. Both can be avoided with changes in lifestyle and, if needed, medications.

“The best evidence right now for lifestyle factors that may reduce risk of Alzheimer’s and other dementias is for regular physical activity in combination with social and mental stimulation, and quitting smoking,” said Maria Carrillo, Alzheimer’s Association vice president of medical and scientific relations, in a statement. “Other lifestyle aspects that may contribute to healthy-brain aging are eating a brain-healthy diet, being mentally active, and being socially engaged.”

And more research may likely identify other risk factors as well. “It’s a complex disease,” Snyder says. “It’s the sixth leading cause of death–and the only cause of death [for which] we currently don’t have a way to stop or slow its progression.” Understanding Alzheimer’s connections to conditions like heart disease could be a first step in addressing that gap.

Your browser, Internet Explorer 8 or below, is out of date. It has known security flaws and may not display all features of this and other websites.

Learn how to update your browser