April 27, 2004 – ACPInternational – DC Chapter Meeting

What Do We Know about Retirement?

Retirement is a very recent concept and the first company retirement plans were designed in the late 1940s – early 1950s.

‘Boomers’ redefined work to require it to be meaningful and are expected to redefine retirement as they see work as critical to their core identification.

A 2002 AARP study of ‘boomers’ indicated over 70% expected to continue working into their 70s or later. A 2003 AARP study of “pre-retirees” (over age 55) indicated that 95% expected to work after age 65. Of current retirees, nearly 80% say they feel youthful and see this period as one of continued learning and growth.

Early retirement is often driven by health issues or job loss. Many voluntary early retirees have returned to work in the past few years. Those who had traditional careers with a limited number of organizations are most likely to retire earliest voluntarily.

Men and women have very different patterns of preparing for retirement and retiring. But the change is rocky for both.

Marital satisfaction significantly drops during retirement transition period (av:10 yrs) but then usually rebounds.

Those who retire as they planned it, with good health, and who were actively involved in non-work activities before retirement are most satisfied with their retirement. Those retirees who regularly engage in active, meaningful, productive activities in retirement are the happiest.

Very few people move to a different geographic area for retirement or once retired. The ties to family and community and known patterns are important – and they are also important protectors of health. Increasingly, those who do move, do so to retirement communities within their local area. On the other hand, the number who move to be near children is decreasing. Colleges are beginning to build retirement communities near/on campus to attract alums.

Retirement is not one event!

Retirement for most people is marked by changes:

  • staying in current work but with reduced hours
  • formally retiring followed by a return to work
  • moving into related work, full or part time
  • moving into long-deferred but preferred work
  • moving into self-employment in artistic or creative areas
  • moving into volunteer work
  • moving into seasonal work

Many people move into and out of “retirement” over a period of 10-12 years.

Preparing for Retirement

Most preparation is financially-oriented. Many people still assume that they will retire in one step and “vacation” for the rest of their lives.

Financial experts recommend 70-100% of pre-retirement income is needed to retire comfortably. Studies show that even after learning of the differences between what one plans for retirement and what one can afford to do, only 42% adjust their savings or retirement date to meet their stated needs.

The percentage of 40+ year old workers who have done any planning for retirement income needs has declined to less than one-third.

Single/divorced women issues:

Majority of women: work as long as physically possible. Biggest issues often are financial due to low wages during their work life and health concerns.

Professional women: less studied but most work until 64 or older and have concerns primarily about coping with illness with less family support.

Single mothers/second wives who have worked full-time are the group most likely to retire early.

Married couples – common issues:

Of those over 50 years old: 45% have never discussed when to retire, 40% have not discussed where to live, and 45% have not tried to assess how much money is needed.

Couples of about the same age: men are more likely to want to retire first since they have worked full time longer, while many wives have taken time out and are now enjoying the relationships, power, and money of their own jobs.

Marriages with larger age differences usually have much more difficulty with this changing pattern over longer periods of time.

Men with significant jobs are more likely to want to move after retirement so as to not have to face the reminders of lost power.

Financial Aspects of Retirement – The Bad News

Only 20% of workers know when they are eligible for full Social Security benefits.

  • If you were born after 1937, you cannot retire at 65 with full benefits. * And the early retirement penalty percentages are also increasing with this change. Until 2000, early retirement was available at 62 with 80% of SS. This is declining to 75% as the full retirement age change is phased in and then to 70% as full retirement hits 67.
  • If you work until 70, Social Security increases your benefit by 6.5-8% over the ‘full’ retirement benefit available at 65/66.

Social Security: you control when you decide to take this money. Advice conflicts – some studies show

  • if you are not working and take it at age 62, you will earn more than waiting to 65/66 as long as you die by 77. Or,
  • if you can wait until 70 to start benefits, you will be significantly better off if you live past 80.

Most workers assume they will spend 20 years in retirement (actual average as of 2002 was 19 years for men and 24 for women); yet, only 25% of those between the ages of 40-59 have saved $100,000 or more in total, excluding home equity.

Pensions cover 22% of all workers. Thus, these people have double the assets of those with other types of retirement savings and are much more likely to have a comfortable retirement.

How People Increase Income – Before and During ‘RETIREMENT’

Develop a sideline business if not self-employed and shelter that income in a Keogh or individual 401k.

Sell expertise via writing, speaking, or consulting and shelter this income.

Develop a phased retirement plan within their organization.

Develop a skill that is in demand in case of job loss before desired retirement time.

Arrange for a consulting or part-time job with current organization to create one’s own phased retirement plan.

Build a part-time business via contacts developed while working.

Provide a service needed within the industry one worked in.

Become an interim executive.

Become an international consultant in developing countries that need expertise. Several organizations offer these services under US foreign aid plans.

Work part-time in one’s current industry or one of interest.

Find on-call work, like substitute teaching or meeting assistance.

Move into the service industry: full time, part time or on a temporary basis.

Find seasonal work, like working in a national park or income tax preparation.

Turn a hobby into an income stream.

Develop a new business based on experience and interests.

Buy a franchise.



  • The Creative Age by Gene D. Cohen, M.D., Ph.D.
  • What Do You Want to Do When You Grow Up by Dorothy Cantor
  • Don’t Stop the Career Clock by Helen Harkness
  • Aged by Culture by Margaret Morganroth Gillespie
  • Emotional Longevity by Norman B. Anderson, Ph.D.
  • The Third Age by William A. Sadler, Ph.D.
  • Aging Well (from Harvard Study of Adult Development) George E. Vaillant, M.D.
  • Purpose and Power in Retirement by Harold G. Koenig, M.D.
  • The Bonus Years: Women and Retirement by Phyllis Hall


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