MONEY Medicare

How to Avoid Losing Out on Medicare If You’re Still Working at 65

Older workers need to watch out for these Medicare enrollment mistakes.

For anyone who plans to keep working after they turn 65—and that’s a growing number of people—planning for Medicare can be complicated. Last week’s column discussed the dizzying array of enrollment periods and other sign-up timetables for people who turn 65 and sign up for Medicare. In this column, I’ll explain the tricky transition from employer insurance to Medicare.

Roughly a third of Americans aged 65 to 69 remain in the work force—a rate 50% higher than only a decade ago. So the adage that everyone must get Medicare when they turn 65 is not true for more and more older Americans.

If you continue to work and have employer group health insurance, you probably do not need to sign up for Medicare. Also, if you lose employer coverage and do get Medicare, and then get a new job with employer health coverage, you usually will not need to keep Medicare. This often surprises people who think they must remain covered by Medicare for the rest of their lives once they get it the first time.

That said, there are exceptions and caveats to that general rule. So to avoid potential stumbling blocks, consider these three key guidelines:

Small business workers may need to sign up. If you’re about to turn 65, and you work for an employer with fewer than 20 workers, yes, you probably need to sign up. In these small-employer plans, Medicare becomes what’s called the primary payer of covered insurance claims for employees 65 and older. Your employer plan is the secondary payer.

If you fail to enroll, Medicare can deny you primary health insurance for many months. And when you finally do sign up, you often face premium surcharges that will last the rest of your life, which could cost you thousands of dollars. As a I mentioned last week, the initial enrollment window for Medicare lasts for seven months—three months before turning 65, the month you turn 65, and three months after your birthday month.

Check your employer’s Part D plan. For people working for larger employers, you don’t face this enrollment rule. However—and there are almost always howevers when it comes to Medicare—there’s a technical requirement for avoiding Medicare coverage, which could be a potential stumbling block to coverage.

Medicare requires that a person’s employer drug coverage be “creditable”—meaning that it must be at least as good as a Medicare Part D prescription drug plan. If that’s not the case, the person would need to sign up for a Part D plan. If you don’t, you will face lifetime premium surcharges for failing to do so on a timely basis.

How likely is it that your drug coverage would not be credible? Honestly, I have never gotten a reader question or spoken to anyone whose employer drug coverage was found to fall short. But if it did, the employee likely would not know until it was too late. Since it is a rule, employees approaching 65 should get confirmation from their human resource manager that your drug coverage passes this test.

Consider signing up for Part A anyway. Even if you do not need to enroll for Medicare at age 65, you should probably sign up for Medicare Part A, which covers hospital expenses and short-term stays in nursing homes. Part A premiums are waived for people whose work records qualify them for Social Security. Normally, this requires working 40 quarters in jobs where Social Security payroll taxes are paid.

Medicare Part A is a secondary payer in this scenario, which means it can help out with expenses not covered by employer group insurance. It does carry a steep-sounding deductible of $1,260 for each covered stay. But the cost of even brief hospital stays easily can soar to many multiples of this deductible, making Part A a nice benefit to have.

Signing up for Part A does have a big downside. By doing so, you will no longer be eligible to contribute to a tax-advantaged health savings account (HSA). If you have an HSA now, you will need to compare the potential benefit of Part A coverage with the loss of your ability to contribute to the account. If you choose to give up contributing to your HSA, however, you will still keep any accumulated funds for as long as you wish. And that money won’t be taxed if you spend it on qualified medical expenses.

Philip Moeller is an expert on retirement, aging, and health. He is co-author of The New York Times bestseller, “Get What’s Yours: The Secrets to Maxing Out Your Social Security,” and is working on a companion book about Medicare. Reach him at moeller.philip@gmail.com or @PhilMoeller on Twitter.

Read next: This Is the Biggest Mistake People Make When Signing Up for Medicare

MONEY retirement planning

This Popular Financial Advice Could Ruin Your Retirement

two tombstones, one saying $-RIP
iStock

The notion of "dying broke" continues to appeal to many Americans. That's too bad, since the strategy is ridiculously flawed.

You may have heard of the phrase “Die Broke,” made popular by the bestselling personal finance book of the same name published in 1997. The authors, Stephen M. Pollan and Mark Levine, argue that you should basically spend every penny of your wealth because “creating and maintaining an estate does nothing but damage the person doing the hoarding.” Saving is a fool’s game, they claim, while “dying broke offers you a way out of your current misery and into a place of joy and happiness.”

I love a good contrarian argument, but for whom did this plan ever make sense? Perhaps people like Bill Gates who have so much money that they decide to find charitable uses for their vast fortune. But for the rest of us, our end-of-life financial situation isn’t as nearly pretty, and we’re more likely to be in danger of falling short than dying with way too much.

In a recent survey, the Employee Benefit Research Institute found that 20.6% of people who died at ages 85 or older had no non-housing assets and 12.2% had no assets left at all when they passed away. If you are single, your chances of running out of money are even higher—24.6% of those who died at 85 or older had no non-housing assets left and 16.7% had nothing left at all.

Now, perhaps some of those people managed to time their demise perfectly to coincide when their bank balance reached zero, but it’s more likely that many of them ran out of money before they died, perhaps many years before.

And yet the “Die Broke” philosophy seems to have made significant headway in our culture. According to a 2015 HSBC survey of 16,000 people in 15 countries, 30% of American male retirees plan to “spend it all” rather than pass wealth down to future generations. (Interestingly, only 17% of women said that they planned to die broke.)

In terms of balancing spending versus saving, only 61% of men said that it is better to spend some money and save some to pass along, compared to 74% of women. Perhaps that’s why, as a nation, only 59% of working age Americans expect to leave an inheritance, compared to a global average of 74%.

There are so many things wrong with this picture. The first is that Pollan and Levine’s formula of spending for the rest of your life was predicated on working for the rest of your life. “In this new age, retirement is not only not worth striving for, it’s impossible for most and something you should do you best to avoid,” they wrote. Saving for retirement is certainly hard, and I don’t believe that all gratification should be delayed, but working just to spend keeps you on the treadmill in perpetuity.

Besides, even if some of us say we’re going to keep working all our lives, that decision is usually dictated by our employer, our health and the economy. Most of us won’t have the choice to work forever, and the data simply don’t support a huge wave of people delaying retirement into their 70s and 80s. And as I have written before, I don’t buy into the current conventional wisdom that planning for a real retirement is irrational.

But perhaps the most pernicious aspect of the “Die Broke” philosophy is that it takes away the incentive to our working life—to get up in the morning and do your best every day, knowing that it’s getting you closer to financial security—and the satisfaction that goes with it. In the end, I believe what will bring us the most happiness is not to die rich, or die broke, but to die secure.

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.

Read next: This Retirement Saving Mistake Could Cost You $43,000

MONEY retirement planning

1 out of 3 of Workers Expect Their Living Standard to Fall in Retirement

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Getty Images

But you don't have to be among the disappointed. Here's how to get retirement saving right.

One third of workers expect their standard of living to decline in retirement—and the closer you are to retiring, the more likely you are to feel that way, new research shows.

That’s not too surprising, given the relatively modest amounts savers have stashed away. The median household savings for workers of all ages is just $63,000, according to the 16th Annual Transamerica Retirement Survey of Workers. The savings breakdown by age looks like this: for workers in their 20s, a median $16,000; 30s, $45,000; 40s, $63,000; 50s, $117,000; and 60s, $172,000.

Those on the cusp of retirement, workers ages 50 and older, have the most reason to feel dour—after all, they took the biggest hits to their account balances and have less time to make up for it. If you managed to hang on, you probably at least recovered your losses. But many had to sell, or were scared into doing so, while asset prices were depressed. And even you did not sell, you gave up half a decade of growth at a critical moment.

Despite holding student loans and having the least amount of faith in Social Security, workers under 40 are most optimistic, according to the survey. That’s probably because they began saving early. Among those in their 20s, 67% have begun saving—at a median age of 22. Among those in their 30s, 76% have begun saving at a median age of 25. Nearly a third are saving more than 10% of their income.

Workers in their 50s and 60s are also saving aggressively, the survey found. But they started later—at age 35. And with such a short period before retiring they are also more likely to say they will rely on Social Security and expect to work past age 65 or never stop working.

Interestingly, the younger you are the more likely you are to believe that you will need to support a family member (other than your spouse) in retirement. You are also more likely to believe you will require such financial support yourself. Some 40% of workers in their 20s expect to provide such support.

By contrast, that expectation was shared by only 34% of those in their 30s, 21% of those in their 40s, 16% of those in their 50s and 14% of those in their 60s. A similar pattern exists for those who expect to need support themselves—19% of workers in their 20s, but only 5% of those in their 60s.

Workers are also looking beyond the traditional three-legged stool of retirement security, which was based on the combination of Social Security, pension and personal savings. Those three resources are still ranked as the most important sources of retirement income, but workers now are also counting on continued employment (37%), home equity (13%), and an inheritance (11%), the survey found.

Asked how much they need save to retire comfortably, the median response was $1 million—a goal that’s out of reach for most, given current savings levels. Strikingly, though, more than half said that $1 million figure was just a guess. About a third said they’d need $2 million. Just one in 10 said they used a retirement calculator to come up with their number.

As those answers suggest, most workers (67%) say they don’t know as much as they should about investing. Indeed, only 26% have a basic understanding and 30% have no understanding of asset allocation principles—the right mix of stocks and bonds that will give you diversification across countries and industry sectors. Meanwhile, the youngest workers are the most likely to invest in conservative securities like bonds and money market accounts, even though they have the most time to ride out the bumps of the stock market and capture better long-term gains.

Across age groups, the most frequently cited retirement aspiration by a wide margin is travel, followed by spending time with family and pursuing hobbies. Among older workers, one in 10 say they love their work so much that their dream is to be able stay with it even in their retirement years. That’s twice the rate of younger workers who feel that way. Among workers of all ages, the most frequently cited fear is outliving savings, followed closely by declining health that requires expensive long-term care.

To boost your chances of retiring comfortably and achieving your goals, Transamerica suggests:

  • Start saving as early as possible and save consistently over time. Avoid taking loans and early withdrawals from retirement accounts.
  • In choosing a job, consider retirement benefits as part of total compensation.
  • Enroll in your employer-sponsored retirement plan. Take full advantage of the match and defer as much as possible.
  • Calculate retirement savings needs. Factor in living expenses, healthcare, government benefits and long-term care.
  • Make catch-up contributions to your 401(k) or IRA if you are past 50

Read next: Answer These 10 Questions to See If You’re on Track for Retirement

MONEY Longevity

The New Rules for Making Your Money Last in Retirement

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Murat Giray/Getty Images

In today's longevity economy, retirement as we know it is disappearing. Here's what to do now.

Are you ready to live to age 95—or beyond?

It’s a real possibility. For an upper-middle-class couple age 65 today, there’s a 43% chance that one or both will reach at least age 95, according to the latest data from the Society of Actuaries.

Living longer is a good thing, of course. But there’s a downside—increasing longevity may mean the end of retirement as we know it.

Problem is, a long lifetime in retirement is a huge financial challenge. As Laura Carstensen, head of Stanford Center on Longevity, said in a recent presentation, “Most people can’t save enough in 40 years of working to support themselves for 30 or more years of not working. Nor can society provide enough in terms of pensions to support nonworking people that long.” Instead, Carstensen argues, we need to move toward a longer, more flexible working life.

Carstensen is hardly alone here. Alicia Munnell, head of the Center for Retirement Research at Boston College and a co-author of “Falling Short: The Coming Retirement Crisis and What to Do About It”, has long warned about the nation’s lack of retirement preparedness. Following the Great Recession, Munnell has pounded away at the reality that continuing to work is the only feasible strategy for many people if they wish to have any hope of affording even modestly comfortable retirements.

For many retiring Baby Boomers, the notion of working longer has appeal—not only for the additional income but as a way of staying involved and giving back. That’s what spurred Marc Freedman, founder of Encore.org, to encourage older workers to use their skills for social purpose. Chris Farrell, a Money contributor, captures this movement in his recent book, “Unretirement: How Baby Boomers are Changing the Way We Think About Work, Community, and the Good Life.”

Still, to afford a longer life, Americans will have to rethink their savings and withdrawal methods too. Right now, most retirement calculators default to no more than a 30-year time horizon. What if you want to keep your retirement income going past age 95? Fidelity’s planners suggest three alternatives that can help:

*Stay on the job longer. Say you are a 65-year old woman who earned $100,000 a year, and you have a $1 million portfolio. You’ll also receive a $30,000 Social Security benefit ($2,500 a month) and you plan to withdraw an initial $50,000 a year from your portfolio. All told, you’ll have $80,000, or 80% of your pre-retirement income. If inflation averages 2%, and the portfolio grows by 4%, your savings will likely last for 25 years, or until age 90. After that, odds are the money will run out.

But if you instead work four more years, until age 69, and keep saving 15% of your income, your portfolio will grow to $1,240,000. That would be enough to provide income for eight more years—until age 98.

*Postpone Social Security. Another move is to work two more years and defer claiming Social Security till age 67, which means your monthly benefit will rise from $2,500 to $2,850. That would replace 35% of her income, instead of 30%, and her portfolio would need replace just 45% of your pre-retirement earnings vs 50%. By age 67, your portfolio will total $1,110,000, which will deliver retirement income till age 98.

*Consider an annuity. You could purchase an immediate annuity, which would give you a lifetime stream of income. The trade-off, of course, is that your money is locked up and payments will cease when you die (unless you add a joint-and-survivor option, which would reduce your payout). Many advisers suggest using only a portion of your portfolio to buy an annuity—you might aim to cover your essential expenses with a guaranteed income stream, which would include Social Security.

A 65-year-old woman who invested $200,000 in an immediate annuity with a 2% annual inflation adjustment would receive guaranteed monthly payments of about $870 a month, or $10,440 a year, according to Income Solutions. Added to Social Security, this income would replace roughly 40% of a $100,000 salary, which will allow the rest of the portfolio to keep growing longer.

But make no mistake. This is a big decision, and many investment experts oppose locking up money in an annuity, given today’s low interest rates. But longevity investing raises the appeal of guaranteed streams of income, and annuity payouts will become more attractive if and when interest rates slowly rise toward historical norms.

Philip Moeller is an expert on retirement, aging, and health. He is the co-author of “Get What’s Yours: The Secrets to Maxing Out Your Social Security,” and a research fellow at the Center for Aging & Work at Boston College. Reach him at moeller.philip@gmail.com or @PhilMoeller on Twitter.

Read next: The Suddenly Hot Job Market for Workers Over 50

MONEY Careers

The Suddenly Hot Job Market for Workers Over 50

Barclay's bank
Dominic Lipinski—PA Wire/Press Association Images

More companies are recognizing the value of mature workers—and they're starting to hire them.

Things are finally looking up for older workers.

The latest data show the unemployment rate for those over age 55 stands at just 4.1%, compared with 5.7% for the total population and a steep 18.8% for teens. The ranks of the long-term unemployed, which ballooned during the recession as mature workers lost their jobs, are coming down. Age-discrimination charges have fallen for six consecutive years. And now, as the job market lurches back to life, more companies are wooing the silver set with formal retraining programs.

This is not to say that older workers have it easy. Overall, the long-term unemployment rate remains stubbornly high—31.5%. And even though age-discrimination charges have declined they remain at peak pre-recession levels. Meanwhile, critics note that some corporate re-entry programs are not a great deal, paying little or no salary and distracting workers from seeking full-time gainful employment.

Still, the big picture is one of improving opportunity for workers past age 50. That’s welcome news for many reasons, not least is that those who lose their job past age 58 are at greater health risk and, on average, lose three years of life expectancy. Meanwhile, older workers are a bigger piece of the labor force. Two decades ago, less than a third of people age 55 and over were employed or looking for work. Today, the share is 40%, according to the St. Louis Federal Reserve.

AARP and others have long argued that older workers are reliable, flexible, experienced and possess valuable institutional knowledge. Increasingly, employers seem to want these traits.

This spring, the global bank Barclays will expand its apprenticeship program and begin looking at candidates past age 50. The bank will consider mature workers from unrelated fields, saying the only experience they need is practical experience. The bank says this is no PR stunt; it values older workers who have life experience and can better relate to customers seeking a mortgage or auto loan. With training, the bank believes they would make good, full-time, fairly compensated loan officers.

Already, Barclays has a team of tech-savvy older workers in place to help mature customers with online banking. The new apprenticeship program builds on this effort to capitalize on the life skills of experienced employees.

Others have tiptoed into this space. Goldman Sachs started a “returnship” in the throes of the recession. But the program is only a 10-week retraining exercise, with competitive pay, and highly selective. About 2% of applicants get accepted. It is not designed as a gateway to full-time employment at Goldman, though some older interns end up with job offers at the bank.

The nonprofit Encore.org offers mature workers a one-year fellowship, typically in a professional capacity at another nonprofit, to help mature workers re-enter the job market. Again, this is a temporary arrangement and pays just $25,000.

But a growing number of organizations—the National Institutes of Health, Stanley Consultants, and Michelin North America, among many others—embrace a seasoned workforce and have programs designed to attract and keep workers past 50. Companies with internship programs for older workers include PwC, Regeneron, Harvard Business School, MetLife and McKinsey. Find a longer list at irelaunch.com. And get back in the game.

Read next: These Workers Landed Cool and Unusual Retirement Jobs—Here’s How

MONEY The Economy

Americans Don’t Want to Climb the Income Ladder — Just Hold On to It

Americans' financial confidence is at its best in years, according to researchers, but people are lowering their expectations nonetheless.

MONEY Second Career

These Workers Landed Cool and Unusual Retirement Jobs—Here’s How

senior fixing tractor
Zuma Press—Alamy

If you're willing to think outside the box, you'll find fun jobs that provide income and adventure.

Retirement surveys say that many people plan to work part-time in retirement—for the income, the enjoyment or both. But an Unretirement job doesn’t mean you have to be a Walmart greeter (not that there’s anything wrong with that).

Instead, think out of the box and create, or find, a part-time position that’s fun, too.

Tinkering in Unretirement

Don Carlson, a former engineer in Columbia, S.C. who spent over three decades in the auto industry, loves working with machine tools, making and repairing things. So when he retired from Ford, Carlson launched a part-time business restoring old tractors. He’s since evolved it into fixing things mostly for fun—recently, he breathed life into an old manual sewing machine. “Most of what I do is for friends now,” says Carlson. “I get energy doing it.”

Tractor restoration is in line with lots of other unusual jobs I’ve learned that people are embracing in their Unretirement. People like Peter Millon, 69, who lives in Park City, Utah and waxes and repairs skis for racers part-time. Or John Kerr, 76; his encore career is a Yellowstone Park ranger.

Retired, But Not Retired

On a public radio broadcast I was on, a Wyoming, Minn. caller named Rick said that after he retired from being a school counselor and decided he wasn’t ready “for the rocking chair,” he picked up a job as a driver. He loves it, especially the flexibility. “I am retired, but I’m not retired,” he said.

How’s this for an Unretirement job pitch? “If you consider yourself ‘Older & Bolder,’ you are retired or planning on retiring, and are looking for a seasonal or temporary job in a great place, the following employers are interested in you. Keep in mind, each has varied accommodations; some have RV spaces, some offer private rooms, and others have rentals nearby. Are you ready for your encore career?” It’s from the website Coolworks.com.

Part-Time Work at a National Park

Cool Works posts mostly seasonal jobs, typically paying minimum wage or slightly higher. They can be enticing for people who’d love to spend time in a national park or another exotic locale, though. When I checked out Cool Works’ job postings on February 25, the openings included: line cooks, night auditors and gift store manager in the Grand Teton National Park; multiple seasonal management opportunities in Mount Rainer and tutoring kids with the Carson and Barnes Circus.

“You can do all kinds of things,” says Kari Quaas, human resources and recruiting specialist at Cool Works.

Reading through the postings reminded me of an interview I did a few years ago with Frank and Sandie, then empty nesters in their 50s. They forged a new life for themselves, living three months of the year alongside Grand Lake in the Colorado mountains (an RV parking space and utilities were free in exchange for campsite maintenance work) and another three with the RV Care-A-Vanners on the road, building Habitat for Humanity homes. The rest of the time they lived and worked in Arizona, Frank at a pharmacy and Sandie as a craft store cashier.

Out-of-the-box Unretirement jobs like theirs can often be nomadic, short-term gigs with beautiful surroundings and so-so pay. Participants often draw on some kind of a pension or have dramatically downsized their possessions and material wants (or, more realistically, have combined savings with frugality). The lure is the adventure and the income helps make the job practical.

Caretaking For Someone’s Home

Home-caretaking is another possibility for those intrigued by the vagabond life. Caretakers, sometimes called housesitters, mostly look after residences and other properties of wealthy homeowners usually while they’re away. Other opportunities open up when a relative dies, leaving a home to someone living far away and the beneficiary needs someone to temporarily watch over the property.

Free board is always part of the caretaking deal, but there’s generally only compensation if you’re watching a well-off owner’s place, says Gary Dunn, publisher of the Caretaker Gazette. He adds that owners tend to prefer older caretakers and many favor former members of the military, police officers and firefighters.

Jobs for Retired Brains

For some other out-of-the-box ideas, I checked in with Art Koff, 79, founder of the website Retired Brains, which focuses on work. Koff mentioned a number of unusual possibilities, such as traveling-assistance companion, shuttle driver for car dealers and golf cart management.

Koff’s own story is a great example of picking up fascinating work after a first career. He spent 40 years in the high-pressure ad business and retired in his late 60s. “I wondered, ‘What to do?’ says Koff. “I couldn’t imagine not having something to do.” So he started Retired Brains. “I am working 50 hours a week, but I really enjoy what I’m doing every day,” he says. “It’s a quasi-public service business. It pays for itself, but I’m not in it for the money.”

Mention the catchphrase “working longer” to many boomers and the immediate image that comes to mind is spending more years stuck in a cubicle or working at a big-box retailer. But the Unretirement narrative shows that more and more retirees are shucking the big box for something out-of-the-box.

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. Send your queries to him at cfarrell@mpr.org. His twitter address is @cfarrellecon.

More from Next Avenue:

Splitting Work and Fund in Retirement

Still Working After 75—and Loving It

Why You’ll Be Able to Work Longer Than You Think

MONEY Social Security

Why We Make Irrational Decisions About Social Security Benefits

piggy bank and hourglass
iStock

Everyone tends to over-weigh a sure gain compared with a slightly riskier gain, even if the expected value of the certain gain is lower.

Financial professionals often recommend that you wait until full retirement or even later before applying for social security benefits. An individual who’d receive $1,000 per month at full retirement age would get a mere $750 by claiming early at age 62. And that same person could get as much as $1,320 per month by waiting until age 70. For many Americans, it appears to make a lot of sense to wait.

As a general rule of thumb, if you expect to live beyond your late 70s, waiting until at least full retirement might be the smart choice. According to the Social Security Administration, a man reaching 65 today can expect to live until 84.3. And a woman turning 65 can expect to live until age 86.6. Given that one out of every four 65-year olds today lives past age 90, you’d assume that most folks would hang on until full retirement before applying for benefits.

That assumption would be wrong, however. In practice, many Americans seem to be ignoring the data. According to The New York Times, 41% of men and 46% of women choose to take their benefits at 62 — the earliest age possible. Why aren’t they listening to the experts?

Your Social Security and your brain

Obviously, there are some very rational reasons for claiming your benefits at 62. For example, you might have some serious health concerns. Or you may just really need the money. Sometimes real life is more complicated than insurance data and actuarial tables.

There might be another powerful reason that people aren’t even aware of, however. According to psychological research, we are all hardwired to lock in certain gains, even if such a decision has a lower expected value. In other words, our psychology could be leading us to make suboptimal financial choices when it comes to social security.

The price of certainty

The underlying principle involved here, which was highlighted in the work of Daniel Kahneman and Amos Tversky, is called the “certainty effect.” This idea is actually quite easy to understand. Essentially, everyone tends to over-weigh a sure gain compared with a slightly riskier gain, even if the expected value of the certain gain is lower.

Here’s an illustration of how it works. Suppose there are two options. Option 1 gives you a chance to win $9,500 with 100% certainty. Option 2, on the other hand, provides you with the opportunity to win $10,000 with 97% certainty, though there’s a 3% chance you will win nothing.

Even though the expected value of Option 2 is higher ($9,700 compared to $9,500), the “certainty effect” would predict that more individuals would choose Option 1 than Option 2. According to Kahneman:

People are averse to risk when they consider prospects with a substantial chance to achieve a large gain. They are willing to accept less than the expected value of a gamble to lock in a sure gain.

A team of academics recently tested this theory, and reported their findings in a paper titled “Risk preferences and aging: The ‘Certainty Effect’ in older adults’ decision making“. They discovered that “older adults were more likely than younger adults to select the sure-thing option when it was available — even if it had a lower expect value.” In other words, they not only found evidence supporting the “certainty effect,” they found that older adults were moresusceptible to it than younger ones. The overall conclusion of the study is very instructive:

… [W]hen it comes to the important decision whether to claim social security benefits at the earliest retirement age (i.e., 62 years old) and receive a sure but lower-dollar payout (i.e., up to 20% less) versus a higher-dollar payout a few years later at full (between 65–67 years old) or after full retirement age (at 70 years age at the latest, with a benefit increase between 4% and 8% for each year after full retirement age until age 70) at the risk of not being alive, older adults might sub-optimally go for the sure payout at the earliest possible age rather than delaying their retirement benefits; thus, permanently reducing their benefits.

Clearly, our instincts can inadvertently lead us astray on financial matters. As Jason Zweig notes in his classic book Your Money and Your Brain, “[I]nvestors habitually are their own worst enemies, even when they know better.” When deciding when to apply for social security benefits, it might be wise to remember how our brains are wired. Otherwise, you could be leaving a lot of money on the table.

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MONEY Second Career

Why You’ll Be Able to Work Longer Than You Think

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Klaus Tiedg/Getty Images/Blend Images

Innovations in technology, medicine and workplace design will allow more boomers to work well into retirement.

As I go around the country talking to people about my book Unretirement and its thesis (that today, retirement often includes part-time work, often with a purpose), I frequently hear people say: “I don’t think I’ll be able to work in retirement.”

They’d like to stay employed, they say, but that’s an unrealistic expectation considering the accumulated ravages of time and increased infirmities. I think that, in many cases, they’re being pessimistic.

Medical advancements (including ones we’ve yet to see) and workplace-design innovations at growing numbers of employers are making it easier to work into your 60s and 70s, albeit not for everyone.

Boomers Coping With Maladies at Work

Now, I’m no Pollyanna about aging. To be sure, getting up from my office chair is a slow maneuver these days, typically accompanied by a groan or two (maybe three). My knees were never good, but it takes longer for them to recover after a business flight. And I realize that plenty of leading-edge boomers are coping with some combination of maladies on the job—fading eyesight and hearing, maybe a limp, a bad back, arthritic hands.

That said, the assumption of widespread work-denying disability is greatly exaggerated. According to the Centers for Disease Control and Prevention, 76% of people 65 and over rated their health as good, very good, or excellent. What’s more, the disability rate for people 65 and over dropped from 35% in 1992 to 29% in 2009, notes Steven Wallace, professor at the UCLA School for Public Health.

At the workplace, smart design, technological advances and organizational accommodation have done quite a bit to address physical issues faced by older workers.

Reconfiguring the Office Computer

John Smith, 55, appreciates how technology has helped him stay employed. Born with cerebral palsy, Smith works part-time evaluating websites and education programs for the Institute on Community Integration at the University of Minnesota, whose mission is bringing people with all kinds of disabilities into the community.

Smith worked there full-time before his life-changing accident a decade ago, when he fell and badly injured his spinal cord; he’s now confined to a wheelchair. His employer lets him use a trackball rather than a mouse to navigate his computer and the computer has software features built into Microsoft Windows that take into account his difficulties with the keyboard. Smith’s power wheelchair lets him raise his seat to be almost on eye-level when speaking to someone standing up.

“I have no doubt that technology is going to keep getting better and will allow me to increase my productivity for many years to come,” says Smith.

“One of the last bastions of widespread discrimination is the belief that to be disabled means being unable to work,” says Marca Bristo, 62, President and Chief Executive Officer of Access Living, a Chicago-based nonprofit that provides housing, in-home assistance, advocacy and other services for the disabled. In 1977, she broke her neck diving into Lake Michigan and became paralyzed from the chest down. “Most people can work, even those with severe disabilities,” she says.

Case in point: Kate Williams, 72, program manager for employment immersion at the Lighthouse for the Blind and Visually Impaired in San Francisco. Though blind due to a rare degenerative disorder, Williams trains and mentors people for jobs in finance, industry, government, nonprofits and other sectors of the economy. Adaptive technologies like Braille-enabled computers and voice recognition software (think Siri) help Willliams’ clients in many tasks.

“I think there is a job for everyone,” she says. “You just have to go after it.” Williams was awarded a 2014 Purpose Prize by the social venture Encore.org.

Hip Surgeries and Driverless Cars

The march of technology is making the formerly impossible now possible for many older workers. Advances in hip and knee replacement surgery already let them remain productive and active. (The idea for this column came from walking through the skyway with a colleague who casually mentioned that he had both his hips replaced. I never knew.)

David Lindeman, Director of the Center for Technology and Aging at the University of California, Berkeley, believes the coming-soon driverless car will have a dramatic impact on how people think about disabilities and prospects for employment. “For everyone with mobility limitations it will be a game changer,” he says.

Unretirement skeptics shouldn’t underestimate the power of good design—specifically “universal design”—for stretching out work lives, too. The universal design movement takes into account aging in the office with specially-created, utilitarian and aesthetically pleasing door handles, lighting and work surface heights.

The approach is an integral part of the corporate campus of office design and furniture maker Herman Miller in Zeeland, Mich. There, the doors have levers rather than knobs, because levers are are easier on aging hands. Desk drawers have easy-grip pulls.

Here’s the thing: Smart ergonomics isn’t just useful for older or disabled workers. “Whether it is chronic aging or acute injury, whatever we do to accommodate those particular situations, they’re going to be useful for everyone,” says Gretchen Gscheidle, director of insight and exploration at Herman Miller.

Will Employers Meet the Challenge?

Of course, technology and smart design only succeed at extending work lives if organizations embrace them. Companies like Walgreen, AMC and Hershey stand out for their concerted efforts to recruit workers with disabilities.

One question other employers need to answer: Will they hire and hang onto employees like Smith, Williams and Bristo?

Bristo sometimes gets frustrated at the slow pace of change. Her husband reminds her during those moments: “Just wait until the baby boomers get older.” That’s when change will speed up, he tells her, as employers realize they need the skill and experience of their older workers.

Yes, some older workers deal with more disabilities than others. That doesn’t mean they should be excluded from Unretirement—far from it.

Chris Farrell is senior economics contributor for American Public Media’s Marketplace and author of the new book Unretirement: How Baby Boomers Are Changing the Way We Think About Work, Community, and The Good Life. He writes twice a month about the personal finance and entrepreneurial start-up implications of Unretirement, and the lessons people learn as they search for meaning and income. Send your queries to him at cfarrell@mpr.org or @cfarrellecon on Twitter.

More from Next Avenue:

Working After 75 and Loving It

Rehiring Retirees as Boomerang Workers

Purpose Prize Winner Helps the Blind Get Hired

MONEY Second Career

Why Elite Colleges Are Targeting Baby Boomers for New Career Programs

Stanford college
Linda A. Cicero—Stanford News

Harvard and Stanford have launched programs for high-level execs seeking to change careers. Other universities are looking to jump in.

Stanford University welcomed 25 unusual students onto its campus this month—all in their 50s and 60s.

They are the inaugural fellows of a new program, the Distinguished Careers Institute (DCI), designed for people who want to follow more than one career path in their lifetimes and who want to go back to a college setting for more training. It is the forefront of a new movement for universities to look beyond typical 19-year-old undergraduates.

“People are finding that their initial careers might last 20 or 30 years, and then they need to prepare for new work that might last another couple decades,” says Dr.Philip Pizzo, the founder of the program and a pioneering oncologist who is a former dean of Stanford’s School of Medicine.

DCI is similar to a Harvard University’s Advanced Learning Initiative, launched in 2009. Both are one-year programs that focus on elite “C-suite” leaders looking to transform the second half of their careers, and both are expensive. DCI costs $60,000, not including housing; tuition and other costs of the Harvard program are similar.

Pizzo, who just turned 70, arguably is launching his own next act with the institute after a distinguished career in medicine that includes stints at the National Institutes of Health and Harvard University.

He is hoping to start something of a movement. Pizzo says he will start talking with other university leaders later this year about what Stanford is learning at DCI and encourage others to embrace its principles.

“We’re an elite program, but not elitist,” he says.

Another group, the non-profit San Francisco-based group’s “EncoreU” initiative is pushing universities to focus on older students making career changes, and it will convene a group of college presidents this fall to talk about how to make it happen.

LIFE ON CAMPUS

Jere Brooks King is a typical mid-career education fellow. She enrolled in Stanford’s DCI program after a 35-year career in sales and marketing roles at high technology companies, punctuated by early retirement from Cisco in 2011 at age 55. She turned 59 just before DCI’s kick-off this month.

King, who has served on the boards of several non-profits and industry associations, is using the DCI fellowship to expand her knowledge of board governance. She hopes to apply that expertise working with entrepreneurial start-ups focused on technology and social innovation.

“It’s really exciting to explore the latest thinking on campus around the connection between technology and social innovation,” she says. “I’m getting the chance to hear from venture capitalists interested in social innovation, and see what students are doing with their own ventures.”

DCI fellows pick an area of academic focus from nine areas, ranging from arts and humanities to engineering, healthcare or social sciences. They also participate in weekly discussion seminars and intergenerational mentoring and leadership sessions.

What kind of reaction are the DCI fellows getting from Stanford undergraduates?

“We think we fit right in, and we’ve been welcomed warmly,” says King. “But I’m sure we stand out, because we all look like someone’s parent—or grandparent.”

Read next: How to Jump from a Second Career to a Dream Encore Job

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