Before taking the leap into retirement, we need to give a lot of thought to how prepared we are for 20 or more years without a paycheck. The most important question, of course, involves income and expenditures, those we can anticipate and those that are harder to predict, such as long-term care. And will there be enough left over to pay for some of the fun things we have been looking forward to? Fortunately, numerous websites, publications, and retirement calculators are available to help us with these questions.
Although some people really do not want to retire and others say they cannot afford to, most of us look forward to some years of leisure after decades at work. In the end, most of us will retire, even though that might occur at a later age than it did for our parents. Recent statistics from the Bureau of Labor Statistics show that in 2013, one in three Americans aged 65 to 69 were working or looking for work, up from one in five in 1990. By age 75, however, only about 13 percent of older Americans remain in the workforce.
The longer people work, the more time they have to save for retirement and the less they need to put aside, since each additional year on the job is one less year of retirement to fund. Still, we should have some idea of how many years in retirement we need to finance. This critical question is one of the hardest to answer. Life expectancy at 65 is about 19 years. But that is an average, and we aren't all averages. Some of us will live fewer and some many more than 19 years. Women typically live longer than men and whites longer than African Americans, although there are many exceptions. Centenarians are still few and far between, but their numbers are increasing. Will you live until you are 100? Can you afford to? How about to your late 80s or early 90s, which more of us are likely to reach? If married, how long might your spouse survive you?
We don't know all that much about the actual decision-making process that workers go through as they ponder the pros and cons of retiring. The Society of Actuaries Post-Retirement Needs and Risks Committee recently gained insights into retirement decision-making from eight focus group discussions with people who had retired within the past several years.
These retirees had given some thought to how long they might live when considering whether to apply for Social Security earlier or later. Often they conducted what is known as a "break-even" analysis of how long it would take if they delayed applying for Social Security to collect what they would have gotten had they signed up earlier. Yet even when they thought they would live beyond the break-even point, they tended to go for earlier benefits, so it is not clear just what impact their life expectancy had on their decision-making.
The focus group retirees were asked specifically how long they expected to live. Although they often looked at family history, a good but not perfect indicator, they still viewed the answer as unpredictable -- a toss of the dice. Yes, genes are important, but these retirees saw themselves as different from people in their parents' or grandparents' generation when it came to health and lifestyles, so parents' longevity might not be what counts. Moreover, even if a parent's longevity is likely to be a good predictor of one's own, you have people like the retiree whose father died at 76 and whose mother was still alive at 91. Where did that leave her?
People usually aren't eager to talk about when they think they will die, which may be one reason that we don't generally see a question about expected age of death in retirement surveys. When it is, "don't know" is a common reply.
The ongoing Health and Retirement Study (HRS), launched in 1992, has asked about the probability of living to certain ages, and recent research published by the Center for Retirement Research (CRR) at Boston College finds a link between people's expectations of living to those ages and their expected retirement age.
The CRR report by Mashfiqur Khan, Matthew Rutledge, and April Yanuan Wu shows that people who are more optimistic about living longer expect to work longer. They are also more likely to end up actually working longer, although the relationship between actual retirement age and what the researchers refer to as "subjective life expectancy" is not as strong, undoubtedly because the best laid plans or expectations are often derailed by poor health, job loss, or caregiving responsibilities.
Will more people be working longer as they live longer? The CRR report concludes that along with increases in actual life expectancy, "subjective life expectancy needs to increase as well" if we aim to extend working life, which would enhance ultimate retirement income security. Annuities like Social Security can help ensure that we won't end up with no income no matter how long we live, but we can outlive savings and lump-sum pension and 401(k) distributions. For those of us who do look forward to retirement, figuring the best balance between continued employment and years out of the labor force is a challenge. Age of death may be uncertain, but for most of us, it is probably wiser to think later rather than sooner.
Employment Update: The year did not end on a particularly high note for older workers. The unemployment rate, which had fallen sharply in November, rose somewhat in December for the aged 55-plus workforce. Still, at 5.1 percent, the rate was well below the 5.9 percent it was a year earlier.
Several larger corporations such as Starbucks, Target and Land's End are able to offer even their part-time employees benefits such as health coverage and paid vacation time (head over to ABC for a full list).
For those with an entrepreneurial spirit and computer know-how, the Internet offers opportunities to bring in some cash from home -- at any hour of the day or night. Take Jose and Jill Ferrer, a retired couple profiled by AARP for supplementing a freewheeling retirement with their website, Your RV Lifestyle. By highlighting certain products related to RV living, the pair earns $700 a month, AARP reports. "And we know the potential is there to grow our website business further," Jill Ferrer says. Other ideas: Etsy.com allows the crafty to turn a profit from their hobbies.
Personal care and home health aid topped the Bureau of Labor Statistics' list of the fastest growing occupations in America. The time commitment may vary (between 10 and 30 hours per week, according to SmartMoney), but the median annual wage is around $20,000 for both occupations, according to the BLS.
Bartending is not just for twentysomethings -- and for social butterflies, this part-time gig offers opportunity to rake in extra cash, not to mention tips, with a minimal initial financial investment (a 40-hour certification course at the New York City Bartending School costs a little less than $600, for example).
Age discrimination is less of a problem in government agencies, reports The Fiscal Times. In fact, agencies such as the Department of Veterans Affairs and the Transportation Security Administration actively seek older workers. Visit USAJobs.gov to search for available positions.
If you've got an artistic flair or an interest in theater, makeup artists can make up to $40 an hour, and only work 20 hours a week on average, AOL Jobs reports. Disclaimer: qualifications may include formal training in cosmetology or theater, and a license is required to practice in several states.
What better way to scratch that globetrotting itch? If you're up for an on-the-go lifestyle, flight attendants also earn up to $40 an hour, making it a very well-paid part-time job.
The nonprofit sector can offer more than volunteer opportunities for retirees, and may be particularly appealing to those who "thought they wanted to change the world ... [but] put that on the back burner for 20 or 30 years while they climbed the corporate ladder," as Tamara Erickson, author of "Retire Retirement: Career Strategies for the Boomer Generation," told The Wall Street Journal. To get started, Idealist.org offers listings for available paid positions in addition to volunteer opportunities: applicants with years of experience under their belts are sure to be met with open arms. Even cooler, Encore.org offers paid Encore Fellowships to "match skilled, experienced professionals at the end of their midlife careers with social-purpose organizations" -- while earning a small stipend for part- or full-time work, midlifers can get their foot in the door to a fulfilling retirement job.
The pay may not be great, but if you're an arts lover, a history buff or a sports enthusiast, the perks certainly are!
"I studied hypnotherapy and cognitive behavioural therapy 3 years ago and now I have my own business, couldn't be happier" -- Huff/Post50 reader Lee Adley It's certainly a challenge, but as our amazing readers -- and the many men and women featured on our page -- can attest, going back to school and pursuing something totally different can be well worth the investment of time, money and energy.