Jan Cullinane - The New Retirement

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The Ultimate Guide to The Rest of Your Life

Third Edition

Jan Cullinane

Copyright © 2022 by Jan Cullinane. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

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Library of Congress Cataloging-in-Publication Data

Names: Cullinane, Jan, author.

Title: The new retirement : the ultimate guide to the rest of your life / Jan Cullinane.

Description: Third edition. | Hoboken, New Jersey : Wiley, [2022] | Includes index.

Identifiers: LCCN 2022010301 (print) | LCCN 2022010302 (ebook) | ISBN 9781119838159 (paperback) | ISBN 9781119838173 (adobe pdf) | ISBN 9781119838166 (epub)

Subjects: LCSH: Retirement—United States—Planning.

Classification: LCC HQ1063.2.U6 C85 2022 (print) | LCC HQ1063.2.U6 (ebook) | DDC 646.7/9—dc23/eng/20220314

LC record available at https://lccn.loc.gov/2022010301

LC ebook record available at https://lccn.loc.gov/2022010302

Cover Design: Wiley

Cover Image: © Westend61/Getty Images

To Roger, my sounding board, cheerleader, and supporter extraordinaire .

by Kerry Hannon

– Best-selling author of Great Pajama Jobs, Never Too Old to Get Rich, and Great Jobs for Everyone 50+, career/retirement strategist

Demographic transformation and population aging are occurring at a blistering pace around the world. Increasingly, our lifespans are topping 100 years, and this will become increasingly commonplace in the years to come.

That's the backdrop for my curmudgeonly views on retirement. I am not a fan. At least not in the way it has been approached in the past.

I guess you'd have to say I'm the anti-retirement expert. I routinely remark: Let's retire the word retire .

I say this for myriad compelling reasons. In large measure, it's spurred by deep-seated financial concerns. A striking number of Americans have little saved for retirement and do not have access to an employer retirement plan to help them sock away funds for their future financial security.

The ability to choose to retire is tangled in thorny financial choices and more than a little crystal ball gazing.

How much longer will you be able to work from a health perspective and in an ageist workplace culture that resists retaining older workers? How will you pay for healthcare after you leave your employer's plan? Importantly, how will you create a life in this chapter that balances your budget and allows you to embrace new challenges and meaningful experiences?

For many people, the decades that lie ahead, should they step out of the workforce in their 60s or are not financially prepared, are a daunting prospect.

For nearly two decades, I have been concerned, speaking, and writing about the looming elder poverty crisis in this country. That crunch is evolving as Baby Boomers retire and are faced with longevity without the savings to support the years ahead, including surging medical costs, particularly at the end of life. My mother died recently on the cusp of turning 92, and I can assure you, her annual living and healthcare costs in her last few years were staggering.

Experts at Fidelity have estimated that about 15% of the average retiree's annual expenses will be used for healthcare-related expenses, including Medicare premiums and out-of-pocket expenses.

According to the Fidelity Retiree Health Care Cost Estimate, an average retired couple age 65 may need approximately $300,000 saved (after tax) to cover healthcare expenses in retirement.

Clearly, that figure comes with provisions that depend on when you step out of the workforce and your health, luck, and so on.

But a successful retirement involves far more than whether you will outlive your money or whether you have saved adequately. To me, work in some fashion engages the mind and provides a social connection and network that is vital to healthy aging.

This doesn't necessarily mean full-blown work scenarios. Part-time, seasonal, contract or consulting positions, a side entrepreneurial gig, can all serve as a financial safety net.

That income is the fourth leg of the retirement stool along with retirement savings, personal savings, and Social Security. Meantime, work can also provide future retirees the ability to delay tapping Social Security retirement benefits.

Social Security's rules essentially give you an 8% bigger benefit for each year you postpone claiming benefits after your full retirement age (currently 66 to 67), until age 70. Put another way, if you're now 66 and wait until 70 to start claiming, you'll see 32% larger benefits than if you filed at your full retirement age.