The Holy Trinity of Retirement

Category: Retirement Planning

January 17, 2018 – Many important things in life rely on a three sided approach. Christianity has as the Holy Trinity the Father, the Son, and the Holy Spirit. A pyramid relies on 3 faces for stability. Less seriously, our brother likes to say that a good gumbo relies on the holy trinity of vegetables: green peppers, celery, and onions (we would add okra). We think there is a good case to be made that a good retirement relies on three key supports as well.

3 Pillars of Retirement
1. Health. Far too many people yearn for and plan for a great retirement, only to have those hopes shattered by a serious change in their health. Sometimes that happens before they retire, other times it happens not along after their working days end. Instead of enjoying golf, tennis, hiking, fishing, or whatever – you find yourself living a sedentary lifestyle, often with crushing medical expenses and painful treatments. Having a serious health change can also affect many other aspects of life too, such as where you live, and how you plan to stay busy in retirement.

The problem is that no one ever thinks bad medical news will happen to them. But too many times, one day you are healthy; the next day a stroke, heart attack, cancer, or serious joint issue totally changes your life.

What you can do
In most cases, there is not much you can do about it. But you can at least be prepared with steps like these:
Build an expense cushion. Plan on putting extra money into your retirement savings because almost everyone has big medical expenses as they get older, and they are usually much worse than anyone plans for.
Stay healthy. If you are obese, smoke, drink more than your doctor advises, or don’t exercise regularly – look out. Chances are you are headed for a medical problem that could wreck your retirement. Likewise you need regular physical exams and to follow doctors’ recommendations.
Consider long term health insurance. These plans can offer peace of mind and stability.
Consider the availability of good health care when choosing a place to retire. If you end up with a serious condition, you might have to move to get good and convenient care.

2. Finances
It is really hard to do the things you want to do, or even survive comfortably, if you don’t have enough money in retirement. Travel, recreation, and a nice place to live all cost money. Not to mention ordinary bills for medical insurance, health care, transportation, food, and taxes that must be paid. As certified financial planner Ellen Siegel said in a recent MarketWatch Retirement Weekly article, “Retirement will cost you more money than you think. Get real about it. Get a bigger nest egg than you think you’ll need because you will spend it.” More critical than that, according to Mark Hurlbert of MarketWatch, we now have to plan for much longer retirements than we used to. The median 65-year old male today can expect to live to 89 – and because that is the median, half of us will live longer than that!

Just like planning to stay healthy, getting ready financially for retirement requires an early start. Hopefully you have been taking advantage of every retirement savings plan you could, and will retire with adequate resources. But if you think you are going to come up short, here are a few things you can do to try to recover:

– Start saving now with renewed vigor
– Delay retirement
– Plan to work at least part-time once you retire
– Downsize and move to a less costly area or home
– Drastically reduce your expenses, the sooner the better
– Get creative about how to do the things you want without spending a lot of money

3. Planning
One of our favorite things to say about retirement is that it offers a “do-over on life”. No matter how your life has worked out so far – where you lived, what your job was, what you did in your spare time – retirement gives you the opportunity to completely start over.

The problem most people have with actualizing their retirement possibilities is that they don’t invest time in planning. Typically they want to retire, but when that day finally arrives they just let it happen. Events overtake them, instead of vice versa. Robert Siegel, who recently retired as the long-time host of the NPR show “All Things Considered”, recently discussed what he was going to do in retirement with Terry Gross. He likened feeling like Benjamin in “The Graduate”; everyone keeps asking what he is going to do with his life, but he has no idea. Meanwhile “helpful” advice like “Plastics”, or in Robert’s case, “Podcasts”, keep pouring in!

There are so many things to plan for in your retirement we can only scratch the surface in this article. Here are some of the top planning items to consider (see more resources below):
– Where to live
– What kind of community
– What to do to stay busy
– Work or not
– Family and friends considerations
– Retirement and your spouse or partner
– Volunteering

Planning needs to start early and often for the best results. Our free eBook, “The Baby Boomers Guide” is a good place to start. It has checklists and questionnaires to help you and your partner think through some of the key issues.

Bottom line
Getting to a rewarding retirement is not something you just fall into. It involves planning, keeping your health, and having the financial resources to be comfortable and do what you want. If you do it right, it could be the best time of your life! Good luck.

Comments? What do you think the pillars supporting a great retirement are?
Please share your thoughts in the Comments section below.

For further reading:
10 Retirement Tools You Really Need
What the Retirement Experts Should Have Said About Retirement Planning
QUIZ: Are You Ready for Retirement?




Posted by Admin on January 16th, 2018

13 Comments »

  1. All very important…I’d include building up/maintaining a strong social support network. Vital for a successful retirement for most people.

    by Jan — January 17, 2018

  2. I would add a fourth pillar, Retirement Self-Education. For most of my final 15 years of employment, I was a retirement and benefits counselor. It allowed me to guage the retirement readiness of the employees I dealt with on a day-to-day basis. It was rewarding to work with employees who took an active interest in retirement planning. Conversely, it was depressing to see that some employees paid little attention to retirement matters until it was too late.

    Employees can get sick, get injured, divorced, laid off, fired and die. Very few people are prepared for things that could end their employment suddenly and force them into retirement before they are ready. Unfortunately, many company Human Resources offices are understaffed and can devote little effort into educating employees on benefits and retirement matters. Often, employess have to deal with outsourced third party companies on these issues and those companies may not exactly be experts on your company’s benefits or retirement plans.

    A good example is my wife. She was a corporate executive and last year she was offered an early retirement package with only a 2 week decision period to accept or take her chances in a reduction-in-force. She wasn’t planning to retire for several more years and only had basic knowledge of her company’s retirement benefits. The materials her company furnished to her for decision making purposes were confusing and lacked detail. To obtain answers to most questions, she had to deal with outsourced companies who could only offer generalized advice. My expertise was in the government sector and I lacked knowledge about her private sector benefits like deferred compensation and stock options. Together, we obtained the information she needed to make an informed decision but it wasn’t easy, especially under the short time frame. I was amazed that this large corporation did not offer any kind of pre-retirement seminar, either in person or online, to assist the affected employees in their decision making.

    Retirement self-education is crucial in the retirement process. Pay attention to any annual benefits and retirement summaries that you company provides. If you don’t understand something, seek answers. Know exactly when you can qualify for retirement and how the retirement benefit is computed. Know what benefits you can take into retirement with you, especially health insurance. Keep informed about changes to Social Security, Medicare and retirement plan contribution limits. Keep your life insurance beneficiary designations up to date and review your life insurance coverage to determine if it is adequate. Determine if long-term-care coverage is right for you. Seek help from a financial planner regarding transfering 401k plans to an IRA and the tax implicatons of traditional and Roth IRA withdrawals, including required minimum distributions (RMD).

    Retirement is a process and not just a destination. The sooner you start the process, through self-education, the better will be the result.

    by LS — January 17, 2018

  3. LS, you are absolutely right on! My husband & I are facing a longer wait until Full Retirement Age and when he started to think seriously about long term disability for Parkinson’s we started to look at the policies and paperwork. Most of the benefits stop at age 65 – they never changed them when the FRA changed. So, I made some phone calls during work hours (who knew the HR people only worked until 3pm???) Anyway, they passed me around to the insurance company, who passed me back to corporate HR – which was in a different city. Everyone I spoke to said, “Gee, no one has ever asked about that before!” Sheesh! They seemed genuinely surprised and I did my best to be nice about it but still get answers. So, we are stuck with benefits only until age 65 but I am hoping that the younger employees will push for these benefits to be available until FRA. Its all about the bottom line, baby!

    He made an effort to work as long has he was effective and as a result, we managed to purchase our retirement home while he still had verifiable income. So far, everyone at his company has been very helpful and supportive!! HR lined out how to take sick-time and family leave as well as apply for the disability insurance and the federal SSDI. The only dept. to put us off was “retirement.” It seemed to us, they just could not be bothered and they had more “important” things to do. Employees usually have a face-to-face “debriefing” when they leave the company but we just could not wait for them and moved out of state while we could. There have been several conference calls but the whole disability vs retirement issue is still not clear. DH plans to defer his pension until after the disability benefits end but the company doesn’t seem to comprehend that. We’re still working on it!

    So, make those phone calls NOW, while you are thinking about it!! We tried to plan ahead but you can’t always cover everything that could possibly happen. As it turns out, we are now in a good spot – loving our new home and community!

    by Holly — January 17, 2018

  4. The financial planners and government keep telling us to keep working. Government keeps telling us we will make 8% a year by delaying our retirement till age 70. Then corporations don’t want older employees for various reasons and come up with packages to encourage them to go. If they don’t go, sooner or later they make it miserable for that person and they leave and with no package. Maybe the government should offer some kind of tax incentives to corporations to keep/hire older people instead of getting rid of them in their mid 50’s. It seems we should prepare our workforce for job loss in their 50’s and how to deal with this financial catastrophe if it happens. People of that age are not usually thought of as cream of the crop anymore. There are a lot of prejudice against older people. Instead of thinking of them as a wealth of information they are thought as having bad technical skills, old fashioned thinking, and non flexible thinkers. I lost 2 great jobs in my 50’s due to staff reduction and a company that left the State. Received two packages and unemployment. The last job I lost at age 58 was it. Never could find anything without moving to another State. So had to go on Social Security at age 62 1/2 to have some income.

    by Louise — January 17, 2018

  5. All three above tiers, and Jan’s addition of a good social network tier, are critical for a good retirement. To keep those four tiers upright and healthy, planning a sustainable lifestyle is the foundation. The keyword is sustainable. If my finances or health take a hit, I must adjust my lifestyle to whatever comes along. Sometimes a member of my social network may need assistance. Even in retirement, I plan to put aside savings and live below my means. When something happens, I’ll be more prepared, even on my limited income.

    by Elaine in AZ — January 17, 2018

  6. Hi Louise:

    My Church job was eliminated and I have been out of work since Dec.1, 2017. They gave me two months salary, and two months health insurance and I cashed out my unused leave of 80 hours. My insurance runs out on Jan 31 so I have signed up with Christian Healthcare Ministries, they have been in business since 1981 and have over 300,000 members. Many people use them for their secondary insurance with Medicare Part B. I know that I may do so, we’ll see 18 months from now when I qualify. I am 63 and I hate to take SS early, and I am on the job search, but I do not want to deplete my emergency fund. I am wondering if those who are not contributing to SS feel that they should go ahead and collect. If I am not contributing due to lack of work, does that mean my benefits will go down–if I live off of a reduced income and savings until I am FRA at 66? It seems to me that the policies in place are penalizing older workers who need to contribute more to their savings for retirement–obviously ageism is rampant in the workplace, yet nothing is done. It seems unfair that I had to sign a document that stated I would not sue the Church for ageism to get my small severance. I asked the Rector and the vestry to consider if their wives did not have their financial support and then the only means of support was eliminated. More should be done for the 50-64 age group. I am thankful that it did not happen to me sooner.

    by Jennifer — January 18, 2018

  7. One more thing…this church retired a Sexton who had lived at the church–he was 66, but had made a low salary at the church and had been there 17 years. They told him they could give him a retirement party or he would be fired. After that he had very little motivation to do a good job and he still had not found a place to live by December 31 when they expected him to move out of his church apartment. The Rector told me that the Director of Administration would be the next one to go–he is 73, but financially well off. He has been with the church for 25 years and was a retiree from the US Postal system. Bottom line, when they want to get rid of you–they will and there is very little one can do about it.

    by Jennifer — January 18, 2018

  8. I agree whole heartedly with Louise and Jennifer! Happened to my husband too at age 64 – his position was eliminated and he had worked for the same company his whole career! Cruel, heartless and unforgivable! We had based our retirement plan on his retirement at 66, FRA. Some fast shifting and moving of investment funds, taking SS two years earlier than planned, moving out of state to a much more friendly cost of living all contributed to making it work out ok for us. In hindsight, I would advise younger folks to plan to hit your retirement goal numbers at 60 rather than 66 – corporate America really has a loathing for older workers! Be prepared rather than surprised!

    by SandyZ — January 18, 2018

  9. SandyZ said it right…”Be prepared rather than surprised.” However, life has a way of surprising us over and over again. For a lot of workers they graduate from college and have that to pay for. Then they get married and along comes kids. Then the need for a home arises along with the needed cars to get back and forth to work and tote the kids here and there. Then just the general expense of living. All of a sudden the kids are ready for college and Mom and Dad want to pay for it. They do. Then all of a sudden they discover they are in their 50’s and haven’t saved much for retirement. Oops, then they try to save but jobs disappear, layoffs, companies moving and some people have low paying jobs that make it hard to save to begin with. Not sure what the answers are but like they say, pay yourself first. Then, maybe living a more frugal life of not keeping up with the Jones and needing the latest gizmo, TV, phone or designer duds. A lot of it is up to us to cut out the crap and get down to the meat and bones and live within our means. If we could all see the future we would be better prepared when we got there.

    by Louise — January 18, 2018

  10. Wish we had a thumbs up feature! The article and all of the postings are great. I discovered Medicare was primary in my employer’s insurance too, and that at 65 many benefits such as corporate life insurance disappeared. That information is NOT in the employee benefit booklet. Hidden (or not so hidden) age discrimination is certainly alive and well in corporate America. The only thing the EEOC has done is trained employers on how to hide it well.

    And as far as retirement planning…I wish that I had saved all that money that our family spent on useless items. As I clean out stuff, I’m constantly amazed on why I thought I needed another tablecloth, another camera just to get one more feature, another Christmas decoration, and so many other things. Hindsight is 20-20, but I hope my kids are learning from our mistakes.

    by Kate — January 19, 2018

  11. From Jean:
    I’d add another – A positive Attitiude! When I look at family, friends, and former colleagues those who were always upbeat and positive seem to have the resiliance to deal with whatever happens while those who were always ” Debbie Downers” are totally miserable in their retirement and blame everyone from their children to the company they retired from to the goverment for their problems. My most upbeat neighbor who has had some serious health setbacks came back from the grocery store and was smiling ear to ear telling me about an encounter she had had with a child at the store. For those who find negative thoughts creeping in it might help to find a way to joy !

    by Admin — January 19, 2018

  12. These are all good, helpful thoughts.

    A small footnote to Jan’s outstanding suggestion that we build/maintain strong social networks. More than any other stage of our lives, the seniors who seem happiest are those with friends spanning every generation and age group.

    by JCarol — January 20, 2018

  13. Great suggestions everyone. There is a lot to successful preparation for a happy retirement. Echoing Jan’s and JCarol’s message, recent study by researchers at Northwestern University found a link between brain health and positive relationships. They discovered that one thing a group of SuperAgers over 80 all had in common were satisfying, trusting relationships. Another study found all kinds of good effects from friendship – in fact it is better than exercise and equivalent to quitting smoking for your health.

    by Admin — January 21, 2018

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