Happy About Being a Baby Boomer: Facing Our Newfound Longevity

Happy About Being a Baby Boomer Facing Our Newfound Longevity By Catherine Kitcho 20660 Stevens Creek Blvd. Suite 210...

Author: Catherine Kitcho

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Happy About Being a Baby Boomer Facing Our Newfound Longevity

By Catherine Kitcho

20660 Stevens Creek Blvd. Suite 210 Cupertino, CA 95014

Happy About Being a Baby Boomer: Facing Our Newfound Longevity Copyright © 2007 by Happy About® All rights reserved. No part of this book shall be reproduced, stored in a retrieval system, or transmitted by any means electronic, mechanical, photocopying, recording, or otherwise without written permission from the publisher. No patent liability is assumed with respect to the use of the information contained herein. Although every precaution has been taken in the preparation of this book, the publisher and author(s) assume no responsibility for errors or omissions. Neither is any liability assumed for damages resulting from the use of the information contained herein. First Printing: December, 2007 Paperback ISBN: 1600050638 (978-1-60005-063-3) Place of Publication: Silicon Valley, California, USA Paperback Library of Congress Number: 2007940450 eBook ISBN: 1600050646 (978-1-60005-064-0)

Trademarks Quicken® and QuickBooks® are registered trademarks of Intuit, Inc. All terms mentioned in this book that are known to be trademarks or service marks have been appropriately capitalized. Happy About® cannot attest to the accuracy of this information. Use of a term in this book should not be regarded as affecting the validity of any trademark or service mark.

Warning and Disclaimer Every effort has been made to make this book as complete and as accurate as possible, but no warranty of fitness is implied. The information provided is on an “as is” basis. The authors and the publisher shall have neither liability nor responsibility to any person or entity with respect to any loss or damages arising from the information contained in this book.

Dedication For David, my favorite Boomer

Acknowledgements This book was inspired by many of my fellow Boomer friends, who gave me ideas, critiques, source material and encouragement. I specifically want to thank Jacqueline Marcell, my expert in all things related to Alzheimer’s disease and caregiving, for her excellent advice and guidance. Thanks also to my dear friend Evie Butcher, who cheered me on through the various evolving versions as my work on the book progressed and who educated me on the nuances of the mortgage world. A special thanks to all the people who filled out the surveys for the Personal Stories chapter; I appreciate the time you took from your busy schedules. Finally, to my mother: good timing! Without you, I wouldn't have been a member of this wonderful and inspiring generation of people.

A Message From Happy About® Thank you for your purchase of this Happy About book. It is available online at http://www.happyabout.info/babyboomer/newfound-longevity.php or at other online and physical bookstores. • Please contact us for quantity discounts at [email protected] • If you want to be informed by e-mail of upcoming Happy About® books, please e-mail [email protected] Happy About is interested in you if you are an author who would like to submit a non-fiction book proposal or a corporation that would like to have a book written for you. Please contact us by e-mail [email protected] or phone (1-408-257-3000).

Other available Happy About books include: • The Home Run Hitter's Guide to Fundraising http://happyabout.info/homerun-fundraising.php • Happy About Tax Relief: The OIC Solution http://happyabout.info/oic.php • Overcoming Inventoritis: http://happyabout.info/overcoming-inventoritis.php • Happy About People-to-People Lending With Prosper.com: http://happyabout.info/prosper/ • Happy About Online Networking: http://happyabout.info/onlinenetworking.php • Confessions of a Resilient Entrepreneur: http://happyabout.info/confessions-entrepreneur.php • Memoirs of the Money Lady: http://happyabout.info/memoirs-money-lady.php • 30-Day Bootcamp: Your Ultimate Life Makeover: http://www.happyabout.info/30daybootcamp/life-makeover.php • The Business Rule Revolution: http://happyabout.info/business-rule-revolution.php • Happy About Joint Venturing: http://happyabout.info/jointventuring.php • Happy About LinkedIn for Recruiting: http://happyabout.info/linkedin4recruiting.php • Foolosophy: Humor is the Key to a Healthy Mind http://www.happyabout.info/foolosophy.php • Happy About Working to Stay Young http://www.happyabout.info/working-to-stay-young.php

C o n t e n t s Introduction

A Letter to My Fellow Boomers . . . . . . . . . . . . . . . . xi An Enlightening Journey. . . . . . . . . . . . . . . . . . . . . . xi Rock On . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .xiii

Part I Facing Our Truth. . . . . . . . . . . . . . . . . . . .1 Chapter 1

Longevity and Life Expectancy. . . . . . . . . . . 3 My Generation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Life Expectancy and Longevity. . . . . . . . . . . . . . . . . . 5 Life Expectancy for Boomers . . . . . . . . . . . . . . . . . . . 5 Other Significant Statistics . . . . . . . . . . . . . . . . . . . . .7 Facing our Longevity . . . . . . . . . . . . . . . . . . . . . . . . . 8

Chapter 2

Why Should We Care? . . . . . . . . . . . . . . . . . . 9 The Domino Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Keeping the Status Quo . . . . . . . . . . . . . . . . . . . . . . 10 The Meaning of Retirement . . . . . . . . . . . . . . . . . . . 11 Reality Check . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Longevity Brings New Risks . . . . . . . . . . . . . . . . . . . 13

Chapter 3

The Health Care Crisis . . . . . . . . . . . . . . . . . 15 Health Care Trends . . . . . . . . . . . . . . . . . . . . . . . . . 16 Anti-aging . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Wellness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Diseases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Health Care Costs . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Health Insurance Options Pre-65 . . . . . . . . . . . . . . . 19 Health Insurance Options Post-65 . . . . . . . . . . . . . . 21 Caregiving . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Long-term Care Insurance . . . . . . . . . . . . . . . . . . . .22 Our Longevity Years. . . . . . . . . . . . . . . . . . . . . . . . . 23

Happy About Being a Baby Boomer

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Part II Paying for Our Extended Lives. . . . . . . 25 Chapter 4

Do the Math . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Calculating Longevity Cost. . . . . . . . . . . . . . . . . . . . 28 A Message to the Financially-Adept. . . . . . . . . . . . . 29 Using Quicken to Calculate Longevity Cost . . . . . . . 29 Categorizing your Expenses . . . . . . . . . . . . . . . . . . 30 Expenses That Change as You Near Retirement . . 32 Medical Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Other Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . 36 What-If Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 A Word about Retirement Calculators . . . . . . . . . . . 37 Step-by-Step Guide for Using Quicken to Calculate Longevity Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

Chapter 5

Longevity Lifestyles . . . . . . . . . . . . . . . . . . . 45 How are we doing? . . . . . . . . . . . . . . . . . . . . . . . . . 45 Where will you live? . . . . . . . . . . . . . . . . . . . . . . . . . 46 Downsizing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Geography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 Moving . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Cutting Back. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Marriage Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 Two to Tango . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 Gifting and Charities. . . . . . . . . . . . . . . . . . . . . . . . . 51 Complex Decisions . . . . . . . . . . . . . . . . . . . . . . . . . 52 Adjustments to Your Longevity Cost . . . . . . . . . . . . 52

Chapter 6

Finding the Money. . . . . . . . . . . . . . . . . . . . . 53 How Wealthy Are You? . . . . . . . . . . . . . . . . . . . . . . 53 Income from Working . . . . . . . . . . . . . . . . . . . . . . . . 54 Social Security Benefits . . . . . . . . . . . . . . . . . . . . . . 57 Savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 401(k)s and IRAs . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Other Investments . . . . . . . . . . . . . . . . . . . . . . . . . . 60 Real Estate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 Reverse Mortgages . . . . . . . . . . . . . . . . . . . . . . . . . 61 Other Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 Pensions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 Inheritances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 Adding it Up . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

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Contents

If Your Projected Income is Greater than your Longevity Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 If Your Projected Income is Less than your Longevity Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 Paying for your Newfound Longevity . . . . . . . . . . . . 66

Part III Decisions and Inspiration . . . . . . . . . . .67 Chapter 7

Boomers March Forward . . . . . . . . . . . . . . . 69 Setting an Example for the Next Generation . . . . . .73

Chapter 8

Personal Stories . . . . . . . . . . . . . . . . . . . . . . 75 Susan and Evan: Married and Child-free . . . . . . . . . 76 Barbara: Unmarried . . . . . . . . . . . . . . . . . . . . . . . . . 76 Dan and Laura: Married with Children . . . . . . . . . . . 77 Cynthia and Ed: Married and Child-free . . . . . . . . . . 78 Steve and Greg: Domestic Partners. . . . . . . . . . . . . 79 Gina: Unmarried . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 Linda and John: Married and Child-free . . . . . . . . . . 81 Sarah and Jack: Married with Children. . . . . . . . . . . 82

Appendix A

Longevity Plan Example . . . . . . . . . . . . . . . 85 John and Jane Doe . . . . . . . . . . . . . . . . . . . . . . . . . 85 Longevity Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 Adjusting the Income Sources . . . . . . . . . . . . . . . . . 91 If You Have a Surplus. . . . . . . . . . . . . . . . . . . . . . . . 91

Appendix B

References . . . . . . . . . . . . . . . . . . . . . . . . . . 93

Author

About the Author. . . . . . . . . . . . . . . . . . . . . . . . . . . . 95

Your Book

Create Thought Leadership for your Company . . . . 97 Why wait to write your book? . . . . . . . . . . . . . . . . . . 98


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I n t r o d u c t i o n

A Letter to My Fellow Boomers I wrote this book because I wanted to send a great big wake-up call to all of my fellow Baby Boomers. We are going to live longer than we ever planned, and there is a good possibility for many of us that we will outlive our retirement savings (a truly scary thought). That is the first major message I am sending. The second major message I am sending is that the time for action is NOW. I have provided many tools and checklists in this book that will help you make the critical decisions to put your plan into place. Starting with calculating your Longevity Cost, and then examining possible sources of income, health issues, and lifestyle issues, I outline the methods, facts, and options to guide you through the process. Throughout the book, I provide both the questions and key information you will need to answer those questions for yourself and your own situation. Consider this book a resource for facing your newfound longevity and developing an action plan for the remainder of your life.

An Enlightening Journey I learned a lot while researching and writing this book. Like many of you, I didn’t think much about retirement; I thought I’d just figure it out at some point in the future, maybe around the age of 62. That point in the future always seemed so distant, but now it’s less than a decade away. On top of that, there have been a great number of articles written in the last five years about


xi

increasing longevity, and the projected life expectancy numbers were quite astonishing to me. I went from feeling rather secure with my retirement investments and savings to being really worried about having to pay for my basic cost of living for 10 or perhaps even 20 more years than I thought. Would I have to keep working the rest of my life just to be able to fund my longevity? As I did the research, I pieced together the necessary information to answer that question for myself. I also formulated a list of decisions that I would have to make together with my husband about where we will live, the lifestyle we want, how we will spend our time, and how we’ll pay for medical care. I learned some fascinating facts (and I had some interesting reactions): • You may have to pay income tax on Social Security benefits. (What?! Isn't that double taxation? When did that happen?) • Three months before your 65th birthday, you MUST sign up for Medicare Part A, regardless of other health insurance you may have. And you have to pay the government premiums to get Medicare Part B. (But I thought all of that was free!) • Nearly half of the people in the U.S. over age 85 have Alzheimer's disease. As longevity increases into our 80s and beyond, we are at greater risk. (Upside: greater longevity means living longer. Downside: greater chance of living a lot longer with a debilitating disease; how will we pay for care?)

xii

Introduction

• The leading cause of death among both men and women in the U.S. is heart disease. (Which way to the gym? I promise to go 6 days a week, really this time.)

Rock On I know that as Boomers we will get through this just as we got through our first four or five decades. I close with some of the fond sayings of our youth, as we ponder the new meanings they have for us now: • Don’t trust anyone over 30. – Don’t trust anyone over 100. • Sex, drugs and rock ‘n’ roll! – Sex now requires drugs (and planning), but we still can rock ‘n’ roll! • Hell no, we won’t go! – Hell no, we won’t go (quietly) into old age! • Peace and love. – Peace and love, for the rest of our days. Your fellow Boomer, Catherine Kitcho Born on December 31, 1949


xiii

Part I Facing Our Truth In order to begin thinking about the remainder of our lives, we Baby Boomers need to understand a few facts and trends. We need to come to grips with our projected life expectancy, which will be greater than we ever planned. Our increased longevity will affect us in ways we may not have thought about: our lifestyle, what we do, our finances, and our well-being. Because of our newfound longevity, we will also have many growing concerns about our health and the cost of paying for our health care as we live those extra decades. This first part of the book looks at these issues so we can start to formulate some answers to these key questions: How long will we live? How does it impact us? What will it be like to live those extra decades?

C h a p t e r

1

Longevity and Life Expectancy

My Generation I’m a diehard Baby Boomer and proud of it. I was born that way, and always will be. Our Baby Boomer generation has visibility because of our vast numbers. Nearly 80 million of us were born in the U.S. between 1946 and 1964, and as of July 2005, there were still 78.2 million of us left1. We are the pig in the python, the bump in the graph—a demographic group like no other before or since. We grew up filling up or spilling out of our school classrooms, then went on to expand college enrollments across the country and increase the size of the workforce. We did our part to increase the Gross National Product and have excelled at consumption. And now when we thought we’d be able to chuck it all and retire right on time, we face a new reality: we’re going to live decades longer than we thought. Aaargh! It’s just not fair. Our parents told us we’d be able to retire at 62 with a nice pension, and if we were lucky, we’d have maybe 8 or 10 more years left after that to live the life of leisure. So, many of us planned everything that way. We spent with 1. “Oldest Boomers Turn 60!” press release January 3, 2006, U.S. Census Bureau. http://tinyurl.com/y3n58o


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reckless abandon, we climbed the corporate ladder, burned out, and now we want to slow down and enjoy life. Oops. Fun may suddenly be gone from our to-do list. So what’s Plan B? Some Boomers considered (or may still consider) themselves to be immortal, and never thought about retirement because they simply weren’t going to be old! If you are in that group, then you will be in for even more of a shock over the next few years. Like it or not, we all will die at some point, sooner or later. We may die five years from now or thirty years from now, but in the meantime we are aging and growing older. Time does not stand still for Boomers. We all must come to grips with the fact that our senior years have arrived. As Baby Boomers, I think we all carry around a vision of ourselves as a much younger person: maybe a 29-year-old face frozen in time. And then one day we look in the mirror, we take the time to really get a good look, a close-up look in the mirror, and we say, “Who the hell is that?” Our appearance is the first rude awakening. The second rude awakening is when our bodies start to let us down. We go about our normal daily routine (like eating, working, exercising, sleeping), and then something suddenly starts hurting. Where did that come from? I wasn’t even doing anything to strain my body in any way! It’s getting so that every morning at breakfast my husband and I sit there and discuss our Ache and Pain Report. The third and rudest awakening is when other people start treating us like senior citizens. When you go to a movie theater or a fast-food restaurant and the young clerk automatically charges you a “senior” rate, then you know there is no turning back. There are lots of examples: when the bag boy offers to help you carry a tiny bag of groceries to your car, or the salesperson in the department store steers you toward “mature” clothing, or you overhear your neighbors’ kids refer to you as the “old lady” or “old guy” next door. Okay, now that we’ve realized our senior years are here, we must deal with the fact that we will be living with our changing appearance and aging bodies for several more decades. How long might we have to live like this? Let’s look at some stats.

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Chapter 1: Longevity and Life Expectancy

Life Expectancy and Longevity People tend to use the terms life expectancy and longevity interchangeably. Someone with longevity has a longer than expected life span or life expectancy. However, someone may also have a short life expectancy due to genetic or medical factors. In the title of this book, I use the word longevity because I believe that we as Boomers are going to live longer than we expected. When it comes down to discussing statistics, though, we need to use the terminology of those who compile the numbers—and statisticians look at life expectancy. The U.S. Government Administration on Aging defines life expectancy as follows: The statistical projection of the length of an individual’s life based upon probabilities and assumptions of living conditions, medical discoveries and advances, natural disasters, and other factors. Morbidity statistics compiled by the government track presumed causes of death over time, producing trend data that can be factored into life expectancy tables2. There are two types of life expectancy tables: those that estimate life expectancy at birth, and those that estimate remaining life expectancy at a specific adult age (such as 65). We will use the latter tables in this discussion because those who have survived childhood are more likely to have an expanded life span. After you reach 65, your remaining life expectancy increases once again. In other words, the older you get, the longer you’re likely to live.

Life Expectancy for Boomers The U.S. government does a lot of detailed analysis of population and health trends. In a 2006 report,3 the Centers for Disease Control forecasted that life expectancy would continue to increase. Over the course of the

2. “Life Expectancy, Aging Internet Information Notes,” U.S. Administration on Aging. http://tinyurl.com/2bxr9w 3. “Health, United States, 2006”, U.S. Dept. of Health and Human Services, Centers for Disease Control and Prevention, National Center for Health Statistics, p. 60 and Table 27. (hereafter cited as “Health”) http://tinyurl.com/yonvk7


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last century, remaining life expectancy at age 65 increased from 12 to 17 years in men and from 12 to 20 years for women. Most of that increase happened after mid-century due to improved access to health care, advances in medicine, and better health habits—which is precisely the time that we Baby Boomers were born. The majority of Boomers received polio vaccinations when we were children, and now polio is almost completely eradicated in this country. Multiple classes of antibiotics were developed to help fight bacterial diseases. We know a lot more about how to prevent and treat the symptoms of the common cold and influenza, even though there still is no cure for either one. So, we benefited from these medical advances and health improvements the whole time we were growing up. Here are the specific life expectancy projections in years, based on death certificate data as of 2004 (Health, Table 27): Men: 82.1 (whites 82.2, African-Americans 80.2) Women: 85.0 (whites 85.0, African-Americans 83.6) Contrast those numbers with our life expectancy when we were born (1950-1960): Male: 65.6-66.6 (whites 66.5-67.4, African-Americans 59.1-61.1) Female: 71.1-73.1 (whites 72.2-74.1, African-Americans 62.9-66.3) These numbers were lower because they reflected the rates of infant and child mortality. But when we were growing up, this was the estimated life expectancy and became our long-term vision. We didn’t need to think about what might happen to us when we were in our eighties because we weren’t going to live that long. The actual statistics surprised everybody; even our parents are living longer than they ever expected. Well, we’d better get used to it. Barring a personal catastrophe or untimely disease or accident, we’re going to be living into our eighties and perhaps beyond.

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Some of you may live even longer than 82 or 85. If your parents or grandparents lived long lives, the pattern sometimes repeats with subsequent generations. You may live well into your 90s, or even make it to 100. Conversely, genetics may have the opposite effect and your parents or grandparents may have had diseases that caused an earlier death, which may mean greater risk for you. There is absolutely no way to predict what your exact life expectancy will be. For the purposes of this book, I have used these life expectancy averages. If you do your planning using the age 82 or 85 life expectancies, chances are that you’ll be on the right track for making some decisions and doing some thoughtful planning. Did you ever picture yourself as an 85-year-old? I know many people in their 80s and I always think that I will never look that old, or move that slowly, or be that wrinkled. They (mostly Boomers) say that 60 is the new 40, and therefore 80 is the new 60, concluding that we will never really look that old. But it’s definitely going to happen! We will all get to a point when we won’t have nearly as much energy, we will have constant aches and pains, we may have to stop driving a car, and we may become dependent on others. These extra years are not going to be nearly as much fun as our last few decades.

Other Significant Statistics We may also be more likely to face our longevity alone. Among Baby Boomers, a whopping 30% of men and 34.6% of women were single or divorced in 2005, a greater percentage than previous generations4. Remember back in our twenties, when we wanted to live together with our boyfriend or girlfriend (“shack up”) and told our disapproving parents “two can live more cheaply than one”? That still holds true, but now we may not have someone to shack up with! We’re more likely to be divorced from the person we wanted to shack up with. Whether one’s single status is due to choice or circumstance, many single people will have a pretty high cost of living, and for a lot longer.

4. “S1201 Marital Status”, U.S. Census Bureau, 2005 American Community Survey. http://tinyurl.com/37lca7


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As single people age, they will need to be more dependent on others for their basic care, and may have to pay for services that a spouse or partner would normally provide. In addition, social activities may become more difficult for singles to maintain, which could contribute to loneliness, isolation, and a decline in well-being. There will also be more women Boomers than men during the next few decades, based on U.S. Administration on Aging projections. In 2020, when about one-half of the Boomers will be over 65, there will be 9.3 million females and 8.28 million males5, for a female-to-male ratio of 1.13. Not only will there be more women, but female life expectancy is also higher. I foresee many “Golden Girls” communities cropping up, with fewer men around!

Facing our Longevity Now that we’ve looked at the statistics, it’s time to face the likelihood that we will be living 22 to 25 more years, on the average, and it could be longer. The sooner we realize this fact, the sooner we can begin to plan how we are going to deal with it all. In the next chapter, I address the reasons why we need to take a close look at how longevity will affect us.

5. “Older Population of the United States, Male and Female Population Estimates/Projections and Sex Ratio, 1990-2050”, U.S. Administration on Aging. http://tinyurl.com/2wg2n6

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C h a p t e r

2

Why Should We Care?

The Domino Effect Our new longevity affects everything that we do or planned to do with our remaining years. The good news is that we will have more time to pursue things that we always wanted to do or to travel or to live in some exotic location. With advances in medicine and anti-aging approaches, we have a better chance of living those extra years in good health. However, the downside is that we still may be faced with the same diseases that increasingly afflict our elderly now, such as Alzheimer’s disease and related dementias. The other downside of our newfound longevity is finances. None of us wants to outlive our retirement savings, but that’s already starting to happen with the generation before us; their life expectancy has risen slightly as well. We will have to be able to afford the basic cost of living for a lot longer than any of us planned. The first and primary goal is to make sure we can pay for basic living costs. We should also consider putting aside some more money in the event of a debilitating disease requiring long-term care. Then and only then can we begin to think about other things we’d like to do in our


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retirement years, such as travel, education, recreation, making charitable contributions, gifting to relatives, and leaving something of an inheritance for our heirs. It’s like a row of dominos. Here is how the dominos would fall: • You will be living much longer • Because you’ll live longer, your health care costs will increase • It may cost more for basic living in those extra years than it does now • Your retirement savings may be drained to pay for basic living and health care • That leaves less or no money for travel, recreation, or education (for yourself) • That leaves less or no money for charities, family, or heirs

Keeping the Status Quo One might argue that this situation is no different than what we have all been doing for the last three or more decades. Whether we live our lives according to a detailed master plan or live just one day at a time, we somehow make do. We’ve all been through periods when our lives were up or down, and we made adjustments and just moved on. Many of us have had severe health scares, and we have had to make adjustments to our lifestyle. One of my Boomer friends had emergency quadruple bypass surgery at age 56; another Boomer friend was diagnosed with aggressive breast cancer when she was 53. After long recoveries, both of them have made many changes in their daily lives and continue to move forward, grateful to be alive. Maybe we’ve lost jobs and have had to find another one, while in the meantime draining our savings accounts or borrowing money or working part-time to get by. Perhaps we’ve suffered tragedies when we have lost loved ones.

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Chapter 2: Why Should We Care?

And I don’t know anyone who hasn’t dealt with family crises: divorces, separations, nasty family feuds, or estrangement from siblings or parents. So if we’ve made it so far, why not just keep going on, one foot forward at a time, and take our chances that everything will work out? The simple answer is this: you are in the final chapter of your life. It may be a long chapter, but you will run out of time. You’ll have to ask yourself what you want to accomplish with the years you have left. If you have included grand plans to do the one or two things you always wanted to do in life, then that’s great. However, first you have to make sure you will have enough money to continue living, and then you can pursue the other things you may want to do before you die.

The Meaning of Retirement Many of us Boomers define retirement as something our parents or grandparents did when they reached 62 or 65. They abruptly stopped working, started drawing Social Security benefits (often as their sole source of income), pursued leisure activities or gardened or sat around watching TV, or if they were very lucky, traveled. Somehow that scenario just doesn’t seem to fit Boomers, and is certainly not something that we plan to do only five or six years from now. As the TV commercial says, Boomers may redefine retirement. But what is the new definition? The traditional meaning is a point of time when one stops working, in other words, retires from their job. What a person does with their time after that point varies widely, and largely depends on their health and financial situation. Using that definition, Boomers may not be able to retire and will have to continue working in order to pay for our increased longevity. Or maybe the new definition is that we will continue working at some level (whether we have to or just want to) and pursue other activities that we have “reserved” for our later years; in other words, a mix of work, leisure, recreation, travel, and/or education.


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We may choose to receive Social Security benefits at the government-designated retirement age or defer them until age 70, and we may view Social Security benefits as just one part of our income stream during our later years. Whatever we choose to do, it changes the way we have to plan for our retirement years; we can no longer use the old models. Because of our increased longevity, we will have to find the right mix and figure out how we can support ourselves as we live out the rest of our lives.

Reality Check We have to accept the fact that we can’t just go with the flow and hope that it all works out. We must face our longevity and figure out how to pay for it and how we want to live. It will cost money to live those extra years and our health may not always be good. It’s going to be a personal decision as to how comfortable we want to be and what we are willing to give up. Or to put it more bluntly, we’ll have to put ourselves first and then worry about other people. If we can’t afford to sustain ourselves for those extra years, we won’t be able to sustain anyone else who might be hoping for a piece of the pie. That’s the cold reality of this situation. It’s going to require planning and a lot of decision-making to do this. Some of you may have already thought through a plan for your retirement years, but may not have adjusted it for increased longevity. If you’ve worked with a financial planner or investment broker, they may have helped you develop a detailed plan with your forecasted longevity built into it. But not everyone is as diligent; it’s estimated that only 19% of Boomers have even done any retirement planning6. There’s a lot of room for improvement! Whatever your own circumstances, whether you have no formal plan or a detailed one that’s in place, the remainder of this book will help you evaluate the impact of your newfound longevity and provide guidelines on how to make the decisions that will help you figure out how to pay for it.

6. “FDIC Outlook: Are Baby Boomers Financially Prepared for Retirement?”, Federal Deposit Insurance Corporation, 2006. http://tinyurl.com/oxxvv

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Chapter 2: Why Should We Care?

Longevity Brings New Risks More than 60% of people over the age of 80 have a form of debilitating dementia. The rate of such disease is on the increase, and one of the reasons is that life expectancy has just risen. We didn’t hear a lot about these diseases until recently because people didn’t live that long. Now we’re in a situation where the physical body is healthy and can last longer, but brain diseases like dementia can go on for many years before causing the body to shut down. That makes for a grim existence, not to mention the cost of health care and paying for a facility such as a nursing home for 5 years or more. Would you have enough money saved to pay for that possibility? A big part of the overall longevity domino effect relates to this and other health issues. Because of our increased life expectancy, we will very likely have to live more years in declining health, even in the best of circumstances. The next chapter addresses health care trends and some of the considerations for us during the remainder of our lives.


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C h a p t e r

3

The Health Care Crisis

Now that you’re clear about the importance of having a plan for longevity, let’s discuss health issues and the costs involved for health care (short-term and long-term) as well as insurance needs. You need to be prepared to pay more for health care in general as you age. Even though we are living longer, we still need to take care of our aging bodies and minds. The odds of contracting debilitating diseases are much greater with each decade. And we will have to foot the bill for medical costs and health insurance because it is highly unlikely that we will have any type of universal health care in the U.S. before we die. Anyone who has heard about or seen the movie Sicko by Michael Moore knows about the financial hardships that people can face by a corrupted and broken health care system in the United States. We have no choice but to deal with it and have a plan; we must hope for the best but prepare for the worst.


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Health Care Trends Not a day goes by that we don’t hear about another issue with regard to health care. Some of it is good news, such as new treatments or research findings to help combat disease or slow the aging process. Some of the news is not so good, such as rising health care costs with no end in sight, or higher instances of diseases that still don’t have a cure. These are some of the trends that will affect us in the next few decades.

Anti-aging More than any other age group, Baby Boomers seem to be keenly interested in how to retain our youthfulness. From exotic new anti-aging medications or supplements to calorie restriction programs to old-fashioned healthy eating and exercise, we are trying to become masters of our bodies and minds. Hell no, we won’t go into old age like our parents did—without a fight. The jury is still out on just how effective these newer anti-aging products and programs are, but many reports have praised the benefits of healthier eating and regular exercise programs, such as yoga, Pilates, and all forms of cardiovascular exercise. The overall effects of this anti-aging crusade are twofold. The good news is that we will likely be healthier than our parents were at the same age, and as a result may suffer from fewer diseases and therefore have lower health care costs. The bad news is that we will live even longer and have to come up with more money to pay for it. Some of the anti-aging treatments are purely related to improving appearance, and not necessarily to improve overall physical health. Tremendous advances have been made in dermatological treatments to combat wrinkles, age spots, and sun damage. There are many affordable options available now such as injections like Botox, laser treatments, and chemical peels to augment or replace more traditional plastic surgery techniques. This terminology is now common vocabulary, and anyone who’s seen an episode of Extreme Makeover knows all about these methods. Many would argue that this relentless pursuit of a youthful appearance is pure vanity, but those who have undergone such treatments generally experience increased self-esteem, improved attitude, and in many cases, blend in better with younger co-workers. Essentially, even these so-called vanity

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Chapter 3: The Health Care Crisis

treatments can improve mental health and maybe even make a difference as to how much longer Boomers can continue working at their jobs.

Wellness Our generation’s interest in health and well-being has invigorated existing health practices or in many cases, spawned whole new industries. On our watch, we started aerobics, expanded the adoption of yoga, popularized the organic food movement, introduced meditation, became interested in alternative medicine like acupuncture, and boy do we know how to diet! Those trends created the need for exercise clothing and shoes, diet and nutritional supplements, health clubs and personal trainers, marathons, sport drinks, health spas, and countless exercise classes (once called “physical education”). As a result, the average Boomer is probably more educated about how to care of himself or herself than previous generations. Now, if we can only stick with it!

Diseases Baby boomers face the same big two diseases of our previous generations: the Big H (Heart Disease) and the Big C (Cancer.) But due to our increased life expectancy, we are faced with a third: the Big A (Alzheimer’s disease and other forms of dementia). All three diseases are expensive to treat, can be debilitating and have a relatively high fatality rate. Our parents’ parents probably never were diagnosed with Alzheimer’s because few people lived past the age of 75, when the risk greatly increases. According to the Alzheimer’s Association,7 in 2007, the number of people with Alzheimer’s disease includes 5.1 million Americans. Among the U.S. population who are 75-84 years of age, 19% of them have Alzheimer’s and among those older than 85, 42% of them have Alzheimer’s.

7. “Alzheimer's Disease Facts and Figures 2007”, The Alzheimer's Association, 30 pgs. http://tinyurl.com/336nqk


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According to Jacqueline Marcell, eldercare advocate, national speaker and author of Elder Rage,8 “Our parents’ parents weren’t diagnosed with Alzheimer’s disease, because the average lifespan at the turn of the last century was only 47—and Alzheimer’s typically strikes much later. Now with advances in medicine, the average life expectancy is nearly 82 for men and 85 for women, with the fastest growing segment of the population being the 85+ group!” Since one out of every eight persons by the age of 65 gets some form of dementia (Alzheimer’s accounts for 60-65% of all dementias), and nearly one out of every two by the age of 85 is afflicted, it is easy to see the huge crisis coming. With 78 million Baby Boomers (born 1946-1964) heading into old age, there just aren’t going to be enough people and resources to care for everyone suffering—typically for 8 to 9 years. Ms. Marcell believes “the answer is in routine testing for the earliest signs of dementia at yearly physicals, starting at age 60, so treatment can begin as soon as possible. With current medications (Aricept, Exelon, Razadyne, and Namenda), symptoms can be slowed down and masked, keeping patients in the early independent stage longer, buying precious time for medical science to produce even better medications—and hopefully even a cure.” We’ve seen lots of advances in medical research to combat these diseases in the last three decades, and there are some medications and treatments that can help prevent heart disease as well as those that can help treat cancer if detected in its early stages. At present, however, there is no cure for Alzheimer’s. With the significant advances in genetics research, scientists are also learning more about the role that heredity plays in disease, and have developed tests that can help measure risk factors for various diseases. For example, there are tests that can be done on women to detect genetic markers for breast cancer. In diagnosing heart health, doctors use incidence of family heart disease as one of the risk factors in determining whether to administer drugs for controlling cholesterol. 8. “Elder Rage”, by Jacqueline Marcell, 2000, 346 pgs., plus additional information, articles and links about Alzheimer's disease and caregiving at her website. http://elderrage.com

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Which one of the big three diseases are we most likely to contract? History might be a guide. The U.S. Centers for Disease Control tracks disease statistics, and in a 2002 study,9 heart disease was the leading cause of death in the United States, at 29% overall (51% of the deaths were women). Other causes of death were listed in the National Vital Statistics Report for 2002,10 and following heart disease was cancer, at 23% of the population. The total for Alzheimer’s disease was 2.6%.

Health Care Costs You may be doing all the right things required to maintain your health: eating properly, shedding excess weight, getting regular checkups and reducing stress in your life. Even with that, however, disease may strike at any time when your genes catch up with you or your luck runs out. There’s also the possibility of injury. Regardless of your state of health, your costs will increase. Even if you’re just getting checkups, costs will increase as well, such as those for tests and doctor visits. Fees are rising, prescription drugs prices are steadily increasing, and you, the patient, must foot the bill on your own or through your insurance. According to the U.S. Department of Health and Human Services, health care spending is likely to increase 6.8% per year through year 2016 when spending will be more than $12,000 per capita.11 We will all be paying more for health care as we grow older.

Health Insurance Options Pre-65 As we head toward our final decades, health insurance will become even more important. Prior to age 65, you can continue whatever type of health insurance makes sense for you and for your health. Cost of health insurance has become a huge issue, and all projections claim there is no end to increases in premiums in the foreseeable future. 9. “Heart Disease Facts and Statistics”, U.S. Centers for Disease Control, 2007, pg. 1. http://tinyurl.com/36vb6g 10. “National Vital Statistics Reports” v. 53, no. 17, March 7, 2005, Table E, U.S. Centers for Disease Control. http://tinyurl.com/2jcex2 11. “National Health Expenditure Projections 2006-2016”, Centers for Medicare and Medicaid Services, U.S. Department of Health and Human Services, p. 1-18. http://tinyurl.com/3axvy4


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Depending on your situation, you may have several options, including keeping your current insurance, continuing your insurance through COBRA if you leave your employer, finding private insurance, or using a health savings account. Remember that things will change when you hit 65, so you first need to focus on the time period from now until then. If you have coverage through your employer, you may have a pretty good plan in place, so it may make sense to keep it. However, if you lose your job, leave your job to start a business, or decide to stop working at that company, what are your options? You can opt to extend your insurance benefits under the provisions of the Consolidated Omnibus Budget Reconciliation Act, or “COBRA.” Under the terms of COBRA, you have the right to continue the benefits of your group health plan for up to 18 months after leaving your job. Your employer must have 20 employees and have a group plan in place in order for you to qualify. There may also be other restrictions; it’s best to check the FAQs at their website first.12 You will have to pay the full premium of the insurance, so if your employer was paying part of the premium, you will be paying more under COBRA. The Government claims that this will still be cheaper than getting an individual policy, but that may not necessarily be the case. It pays to check rates to see what you can find. A Boomer friend of mine left her job to start her own business, and opted for a less expensive catastrophic insurance plan because the COBRA premiums were too high for her budget. Some people may have an individual insurance policy, which is common for those who are self-employed or if their employer does not offer health insurance. If you already have such a policy, it may make sense to keep it until you turn 65 as long as it’s affordable. When premiums go up as you hit specific age intervals (such as at age 50, 55, and 60), you may have the option to choose a higher deductible in order to lower your premiums.

12. “FAQs about COBRA Continuation Health Coverage,” U.S. Department of Labor, Employee Benefits Security Administration. http://tinyurl.com/op5p

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If you choose to change health plan providers or apply for first-time private coverage, it can be quite difficult to qualify, even if you don’t have major health problems. Something as minor as having a mole removed or taking antidepressants can be grounds for insurance providers to deny coverage. Also, if you’ve had private coverage for years and then have a major illness or surgery, your insurance provider can also just cancel your coverage any time they please. The older you get, the more difficult it is to change companies or get new insurance. And if you do qualify, your rates might be outrageous, forcing you to opt for catastrophic coverage that covers hospitalization only, with high deductibles. Not a lot of good news here! Another option that has developed in the last three years is the Health Savings Account (HSA). This is like a savings account to be used for health expenses, and the savings are tax-free.13 In order to do this, you must already have a “catastrophic,” or high deductible health insurance plan, and the deductible must be $1050 (for an individual) or $2010 (family policy). There are also maximum out-of-pocket expenses per year that apply. You can set up a health savings account with banks, credit unions or an insurance company.

Health Insurance Options Post-65 As you near your 65th birthday, you will need to sign up for Medicare benefits. Medicare is somewhat confusing, but basically everyone gets part A (hospitalization) and you have a couple of options regarding part B (doctor’s visits, laboratory and other expenses). If you’ve ever worked, you will receive the part A benefits for free. There have been some changes made in Medicare in the last 5 years, and part B is now based on income. Individuals who make less than $80,000 per year must pay monthly premiums of $93.50. For those with annual income over $80K and less than $160K, the premiums are $105 per month.14

13. “Health Savings Accounts”, U.S. Department of the Treasury, Office of Public Affairs, multiple articles and reports. http://tinyurl.com/u652t 14. “Medicare and You 2008”, U.S. Department of Health and Human Services, Centers for Medicare and Medicaid Services, p. 1-116. http://tinyurl.com/2zt6xq


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Over time, Medicare benefits have not increased with inflation. Therefore, most people purchase some type of supplemental or “Medigap” coverage for everything else. Like all health insurance policies, the premiums and coverage vary all over the map. Medigap premiums can vary from $800 to $3500 per year, with an average of $1500 per year. The laws regarding Medicare are always subject to change, and many people believe that as larger numbers of Baby Boomers apply for Medicare, the benefits may be reduced or the premiums will go up due to the sheer volume of people that will be in the system. Cross your fingers that the coverage will be there when we need it!

Caregiving Who will take care of us as we age? The “first responder” caregivers for people are usually their children. For a great number of Baby Boomers who are single, or married couples who are “child-free”, that is a huge concern. Even for Boomers who have children, however, they may live a great distance away; it is quite common for families today to be geographically dispersed. Unless you have really good friends or other relatives such as siblings living nearby, you are at the mercy of paying for care that might otherwise be somewhat provided by family. My husband and I are blessedly child-free (no regrets) and are in that category. We have purchased long-term care insurance policies in case something happens to either of us. We don’t have close relatives living nearby, so we have other contingency plans in place.

Long-term Care Insurance If anyone has had a parent or older relative who were placed in a nursing home for a long period of time, you know firsthand what a huge expense it is at a time when you have few other options for the person’s care. My father was in a nursing home for the last two years of his life, suffering the ravages of both Parkinson’s Disease and dementia. Medicare only covered the first 90 days of his stay. After that, it was up to my mother to pay the $4000 monthly fee. Luckily for my parents, they had planned ahead and set aside enough money to prepare for this possibility. Many others aren’t so lucky, and must sell their homes or take out second mortgages or sell other assets just to pay the bills. Shortly after my father died in 1998, my husband and I decided to look into long-term care insurance.

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The best time to buy long-term care insurance is in your 40s and 50s, because the premiums will be more affordable. True, you will be paying premiums over a longer period of time, but if you wait until your 60s to apply, your medical risk will be greater which means higher premiums. Like any type of insurance, you need to qualify for it and so you can also be denied coverage if you have medical conditions that present too high a risk for them to insure. Long-term care insurance covers expenses that health insurance companies don’t cover. If you are over 65 when you enter a care facility, Medicare will only cover the first 90 days, as with my father. It’s important to learn what the policies cover as you evaluate them, as well as how much they will pay. Check with your state or area to find out the relative cost of nursing homes in your area (and be prepared to be shocked; they are expensive no matter what part of the country you live in.) The AARP website has an excellent checklist of what to look for in long-term care insurance along with other links.15

Our Longevity Years Living longer means adjusting to an overall decline in health. The decline may not happen all at once, but eventually we all will die; there’s no getting around it (like taxes!) We all hope that we can live active lives free of pain and disability for as long as possible, but we have to be prepared for a less-than-perfect situation. Some of us may be afflicted with one of the big 3 diseases, and will have to manage the impact it will have on ourselves and our families. As responsible Boomers, we need to think about how we will deal with our aging bodies and minds not only on an emotional level but also on a financial level. We will be subject to higher costs of health care for a lot longer than the previous generation, so we need to work that into our plan now. The next three chapters will take you through the process of estimating your Longevity Cost, making lifestyle decisions, and finding the money to pay for it all.

15. “Long term care insurance” AARP website. http://tinyurl.com/yuxpfq


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Part II Paying for Our Extended Lives Once we have reconciled ourselves to a longer life than planned, we must understand what it will cost and how we will pay for it. This section of the book is a different way of doing retirement planning. Even those of you who have a professionally prepared retirement plan will benefit by going through these three chapters. Chapter 4 describes a method of calculating your Longevity Cost by using your actual current cost of living, and even includes instructions on how to use Quicken® to tally your cost of living and do what-if analyses. Chapter 5 addresses lifestyle issues that you may need to address in order to make adjustments to your Longevity Cost. In Chapter 6, you will learn about the various income sources that can be used to pay for your extended lives. When you finish these three chapters, you will know the steps involved in preparing a basic retirement plan that you can use for future decision-making.

C h a p t e r

4

Do the Math

A few years ago at tax time, I was gathering files together for my husband, who was preparing our files to meet with our CPA. After my husband did the usual profit and loss statement for my businesses using QuickBooks®, he then looked at our personal profit and loss statements to find other deductions and such. He looked at the income I had received from my businesses and what was left in my accounts, and had a burning question for me: “Where’d it go?” So, I glanced through my checkbook and a couple of credit card statements and said, “Oh, the usual. Gas, food, gas, food, medical, gas, food. You know.” He wasn’t satisfied. “You couldn’t have spent that much money just on gas and food!” He wanted a better answer. So, I painstakingly went through my entire checkbook and every credit card statement and every cash receipt. I decided I would use Quicken®, because I already used it for my checking account. I created categories for everything and entered every receipt and charge. I created a report and I named it the “Where’d It Go” report. When Quicken tallied the categories, I was shocked to see where the money really went. Number one on the list: Insurance (health, life,


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long-term care). Second on the list: Taxes. Food was number 10 on the list. I showed him the report and then had him generate one for his expenses. It was a real eye-opener in terms of which expenses were the highest. And it was even more depressing to realize that none of these expenses were frivolous; they were just the basic costs of living. Now I do this report every year, and I know my baseline. I can now project it into the future to calculate my Longevity Cost.

Calculating Longevity Cost I define Longevity Cost as the amount of money it will cost Baby Boomers to live those extra decades. There isn’t a really good formula for calculating this; you just have to do the work in order to get an accurate view of what it will truly cost in the future. That’s why it’s important to do the detailed work of estimating your Longevity Cost by looking at each expense category to figure out how much you’re spending now on an annual basis. Once you have the annual total you can multiply that by the number of remaining years you’re likely to live in order to estimate Longevity Cost. That calculation, of course, assumes that your rate of spending will stay the same for the next few decades. Many investment firms use a guideline of 60 or 70 or 85% of your pre-retirement expenses to estimate what you will spend in retirement. But many retirees are finding that it’s costing more than that, and in some cases, retirement is costing more than the pre-retirement years (a very scary situation.) In reality, some categories may increase (medical) and some may decrease (income taxes and commuting expenses like gas and auto maintenance). If mortgage expense is a high category (like in the top 5), then what does that mean in retirement? Will you move to a smaller house and have a smaller mortgage or none at all? Or will you move into a nicer area like you’ve always wanted to in retirement and have a higher mortgage? When you have your baseline cost of living and Longevity Cost figured out, you can then do some what-if analysis in order to calculate how your costs might fluctuate and the impact.

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Chapter 4: Do the Math

A Message to the Financially-Adept Many Boomers already have a detailed retirement and investment plan in place, developed by a certified financial planner or an investment broker. If you have taken the time and spent the money to do that, you should be commended for your foresight and sense of financial responsibility. Even if you have gone through that process, it may still be useful to walk through the steps of estimating your Longevity Cost, to rethink your lifestyle decisions, and re-examine your income sources as laid out in this chapter and the following two chapters of this book. It’s also a good idea to examine your existing plan to make sure it addresses the issues identified here and has enough detail in it for your specific situation. Plans are merely roadmaps and conditions change, so you might discover ways to improve your financial situation for your longevity years.

Using Quicken to Calculate Longevity Cost Using Intuit’s Quicken software allows you to calculate and categorize your real spending in order to find out how much you will need to just pay your basic expenses during your remaining years, or your Longevity Cost. Quicken can also help you do some forecasting about how your expenses may change as you near 65. Here are the basic steps of using Quicken to do this calculation; the more detailed instructions are at the end of this chapter: 1. Enter a year’s worth of expenses into Quicken and categorize them, including all credit card charges, checks and cash expenditures. Use the default categories within Quicken or your own, but be sure to include the following categories that will fluctuate in the coming years: Taxes, Health Insurance, Medical Expenses, Automotive (especially Fuel), Rent or Mortgage, and Renters’ or Homeowners’ Insurance. If you use Quicken to track your expenses routinely, this will be easy. If you don’t want to take the time to enter a whole year’s worth of expenses, do three


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representative months and multiply by 4 (but be sure to add in your taxes whenever they were paid). This annual total is your Current Cost of Living. 2. To calculate your Longevity Cost, subtract your current age from 82 if you are male, or from 85 if you are female. (African-Americans use 80 for males and 83 for females.) Multiply the result by your annual Current Cost of Living. This is your Longevity Cost, which is how much money you will need to live those extra decades. It can be a shockingly large number! 3. This Longevity Cost assumes that you will continue to spend at the same rate during retirement as you are now before retirement. Obviously, some categories of expenses will change when you reach 65 (health insurance) or when you actually retire (income taxes). You can use the Cash Flow Forecasting feature of Quicken (Deluxe, Premier or Home and Business editions) to help you do what-if analyses so that you can forecast your future spending more precisely and compare it to your current cash flow. At the end of this chapter, you’ll find a step-by-step guide for using Quicken to generate a Current Cost of Living report and do analyses with the Cash Flow Forecasting feature.

Categorizing your Expenses If you use a spreadsheet or some other program besides Quicken to track your expenses, you should still use a consistent set of categories to analyze your spending patterns. Here are some categories that can be created in Quicken or your own spreadsheet program. Some of these main categories have subcategories that should also be included, and some of these will very likely change as you near retirement.

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Category Automotive

Subcategories Likely to Change? Fuel, insurance, registration, Yes - as job situation service changes

Banking fees Capital improvements Charitable contributions Cash, other donations Cleaning services Clothing Educational fund Entertainment/Dining out Food, groceries Gifts Grooming and personal care Home improvement Household goods Insurance Auto, home, health, life, long-term care, renters’ IRA/401(k) contribution Spouse Landscaping, gardening Loans (other than mortgage) Medical Mortgage Non-deductible contributions Recreation Rent Taxes

Travel Utilities

Yes–as savings allow



Yes–as needs change Yes–as income changes

Auto, home improvement, home equity, other, principal, and interest Doctor, drugs, therapy, plus Yes–will likely increase Dental and Optical Interest Yes–as savings allow

Fed, Medicare, state, property, SDI, Soc Sec

Yes–as income changes or if residence changes (property tax)

Cable, Gas, Electric, Sewer, Garbage, Water, Telephone, Internet Services


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These 25 categories cover the basic costs of living for an average Baby Boomer. You may have additional recurring expense categories that are not on the list; if so, add them. Remember that this list is for your personal finances only. If you own a business, those expenses should not be used for the Longevity Cost calculation.

Expenses That Change as You Near Retirement Many categories on the list are not likely to change very much as you get older. You still have to live somewhere, pay rent or a mortgage and utilities. You still have to eat. Oh sure, we can all cut back on those expenses. We can eat out less. We can move to a cheaper house or geographic location, and we can do our part to conserve and lower our utility bills. Those are small differences. The big differences are in the areas of medical expenses, taxes, and insurance. There also may be differences in auto expenses if you don’t have to commute to a job, and you may also need to cut back on discretionary spending for gifts, charities, and contributions. Let’s look at the big three.

Medical Expenses It won’t be a surprise to anybody that health care costs have risen dramatically in the last decade, and they show no signs of slowing down. The U.S. Department of Health and Human Services regularly projects national health care expenditures. In its latest report,16 the Office of the Actuary estimates that by 2016 (when Boomers will be ages 48-70), the total national expenditure will be $4.1 trillion, which is nearly double what it is in 2007. That’s a projected growth of 6.8% per year. The per capita expenditure will average $12,782, more than double what it is now. Those totals include costs of private and public (Medicare) insurance, along with medical expenses (physicians, hospitals, dental, nursing, and prescription drugs.) 16. “National Health Expenditure Projections 2006-2016, Forecast Summary and Selected Tables”, U.S. Dept. of Health and Human Services, Office of the Actuary, Centers for Medicare and Medicaid Services, Tables 1 and 2. (hereafter cited as “National Health”) http://tinyurl.com/2q35gt

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Even if you stay healthy, your costs for insurance and the rates you pay to all those service providers will go up anyway. If you contract a nasty disease like cancer, then you not only have to pay the increased costs, but you will also have to pay more in deductibles, out-of-pocket costs, and co-payments. For long illnesses or high-risk treatments, there’s always a chance that your insurance company won’t cover expenses at all or may cancel your coverage; an ugly situation, but it’s happening more often. Any way you look at it, your medical costs will go up. To project these costs into your calculation, you can use the 6.8% per year projection, which will take you out about 10 years from now. If you have high risk factors due to genes or personal medical history, then you should also factor in additional costs of both insurance as well as out-of-pocket expenses.

Taxes Income taxes are likely one of the biggest expenses at this stage of your lives. As long as your income continues at the current rate, you will have to continue to pay income taxes. Even now, your tax rate may fluctuate depending on a myriad of other factors based on your current situation, such as deductions, capital gains and losses, gains and losses from businesses, etc., etc. Now, if you’re thinking that you won’t have to pay income taxes once you retire and start receiving Social Security benefits, think again. Since 1983, the Internal Revenue Service has had the power to tax Social Security benefits17. The law is such that if half of your Social Security benefits plus all other income exceeds $32,000 for couples or $25,000 for singles, you have to pay tax on those benefits. What? Why didn’t we hear about this before? It’s probably because back in 1983 many retirees didn’t exceed that income level. Now, twenty years later, the vast majority of us are going to exceed that level. The old saying, “nothing is certain except for death and taxes” still holds true. So, when you are doing your projections, don’t forget about consulting with your tax accountant to get an idea of what your tax burden might be once your sources of income shift after

17. “Taxes and your Social Security Benefits”, Social Security Online, Benefits Planner. http://www.socialsecurity.gov/planners/taxes.htm


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retirement. Taxes may stay the same, they may decrease, or (God forbid) maybe they’ll increase, but they will definitely not go away unless you are practically at poverty level.

Insurance Let’s start with health insurance, which is usually the biggest expense of all the types of insurance. Along with medical expenses, cost of health insurance is also expected to rise. According to a report on national health expenditure (National Health), the cost of private health insurance is expected to rise from $165 billion in 2007 to more than $295 billion in 2016. So, between now and your 65th birthday, count on annual increases to your health insurance if you have it. Three months before your 65th birthday, you will have to sign up for Medicare Part A insurance, which covers hospitalization. You can also sign up for Part B (doctors’ visits, laboratory, and other expenses) and pay premiums to the government. Part D is the prescription drug coverage that is optional and is provided by private companies. In addition to the Medicare plans, you can also purchase private supplemental insurance, known as Medigap plans. You also have the option to get your Part A and B (and sometimes Part D) insurance through a private insurer (sometimes called a Medicare Advantage policy). Rates for this coverage will vary all over the map, and even the rates for Medicare’s Part B premiums will change with time.18 For this part of your Longevity Cost projection, you’ll need to factor in one set of rates from now until 65, and another set from 65 to your life expectancy age based on what you’ll pay for your Parts B and D, and other supplemental insurance. Because most of us have to live somewhere, we will still continue to pay homeowners’ insurance or renters’ insurance. Depending on where you live, your current rates may stay pretty much the same or just go up slightly from year to year. The exceptions: if you live in an area prone to hurricanes (Florida and the Gulf states), earthquakes (California), floods (just about anywhere) or tsunamis (Hawaii and 18. “Medicare and You 2008”, U.S. Dept. of Health and Human Services, Centers for Medicare and Medicaid Services, p. 1-116. http://tinyurl.com/2zt6xq

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some other coastal regions), your rates can increase dramatically and without warning. Unfortunately, these disaster-prone areas tend to be where many senior citizens go when they retire. So, you may need to factor in an increase in insurance rates if you want to live there, or count on moving somewhere else where you won’t have high insurance rates. It used to be that few people over 50 had life insurance, or could even buy it. Today, people of any age can purchase life insurance, even those over 80 years of age. With the widespread availability of life insurance, there are now two schools of thought. Conventional thinking is that if you’re retired and not working any more, you no longer have to worry about that source of income for your spouse or survivors if you should happen to die. And of course, the cost of monthly premiums may outweigh the benefits. Therefore, you don’t need life insurance. The other view is that life insurance can be a valuable source of income should a spouse or relative die even during retirement, and the insured amount will certainly come in handy to pay expenses. So, you can take either point of view and decide to keep your insurance if you have it now, and keep paying the premiums. Or, you can decide to cancel the policy in a few years when you retire. Long-term care insurance is something I would advise everyone to get if you can qualify for it—and the sooner the better. As discussed in Chapter 3 in the Health Trends section, long-term care insurance has become more important because of our increased longevity and our increased likelihood of contracting Alzheimer’s or related debilitating dementias that may require years of expensive care in an appropriate nursing facility. The average monthly tab for such a facility is $3500 per month, anywhere in the country. Medicare will only cover the first 90 days of costs for such a facility, and after that, you are on your own. Long-term care policies pay a daily amount, depending on the policy that you have. For instance, the policy that my husband and I have covers $177 per day for a nursing home or hospice, with a 30-day waiting period and a maximum lifetime benefit capped at $233,000. The annual premium is a little over $700.00. With these policies, you can select the amount of daily benefit based on how much you want to pay for premiums, and most policies will give you “inflation options” to increase the daily benefit by paying slightly higher premiums. We selected this benefit amount because it fit our estimate of what it would


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cost for a local nursing home. We feel that it’s well worth the cost of the premiums, considering the considerable cost of a nursing home for several years.

Other Adjustments What about inflation? Yes, the current economic rules of thumb do apply. If you are doing projections into the future, you should use an inflation rate of 3% per year, for everything. No one knows for sure what the future rate of inflation will be; inflation is usually estimated to be an average of past inflation rates over the last few years. The rate of 3% is what most financial forecasters are now using for a projected future inflation rate. Another adjustment is family size. Perhaps a family member (child or other dependent) will be moving out of your home, which may reduce some of your normal living expenses; you should factor that in as well. Many Boomers are becoming “empty-nesters” as their college-age or adult children move out of the house, if they haven’t already. The opposite situation can also occur, and perhaps your twenty-something or even thirty-something children move back into your house due to personal or financial circumstances. Many Boomers are also faced with providing financial or housing support for their elderly parents while still supporting their own children; this phenomenon is referred to as becoming the “sandwich generation”. You may have to factor in the cost of this additional support to your family members when you do your forecast.

What-If Analysis Once you have a baseline report of your current annual expenses, you can begin to fine-tune your Longevity Cost as well as delineate some decisions you may need to make in the coming years. The first thing you should do is to create a baseline spreadsheet or report, with your categorized annual expense totals. You can use a spreadsheet program or you can also do some comparisons using Quicken (see the Quicken guidelines at the end of this chapter.) Then you should fine-tune it for the 3 major areas of change as outlined above:

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• Medical expenses: Factor in increases of 6.8% per year or estimate your own increase • Taxes: You can consult with your tax advisor, or estimate your future tax liability on expected income (don’t forget to include your Social Security benefits) • Insurance: For health insurance, estimate the costs prior to 65 and use a second number after 65 that accounts for your Medicare coverage Do each analysis separately, and label them. That way, you can evaluate the impact of each of these three factors on your Longevity Cost, and have a basis for making crucial decisions later. You can also do a recalculation of your Longevity Cost in order to fine-tune it for these three factors. Then you will have an accurate representation of how much money you will need to find when you read Chapter 6. Appendix A contains an example of how to tally Longevity Cost and make adjustments to it.

A Word about Retirement Calculators Many financial services companies have tools at their websites for doing retirement planning, including workbooks, tools and calculators. These are designed to give you a very rough estimate of how much money you will need for retirement and whether you’re on track for having enough. Usually they will have a short calculator at their website that you can use for free, with no obligation. Why not use these calculators instead of doing the work of calculating Longevity Cost? Because they don’t really look at the expense side of the equation; they only look at income (current or future) and amount of retirement savings. Therefore, they will not give you an accurate


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picture of your real spending and Longevity Cost. Some of these calculators may even give you erroneous results, like those that base the calculations on current income; here are two: 1. http://www.fidelity.com — “MyPlan Snapshot” has 5 questions but only considers your current income and your rate of savings (not your expenses). 2. http://www.bloomberg.com/invest/calculators/retire.html — This one is based on current income and amount of retirement savings. I used both of these calculators and plugged in numbers for my own situation, based on the input they asked for. The Fidelity calculator told me I would have a serious shortfall of funds on the order of hundreds of thousands of dollars, which was completely incorrect. The Bloomberg one was really scary; it said that I would be just fine because my living expenses during retirement would only be 30% of what they are now. I don’t think so! Not unless I decide to go live in a hut in the woods somewhere. There’s something wrong with this picture. The problem is that these calculators use a percentage of your current income to estimate your future costs of living, not actual current living expenses. Some financial investment firms also use a rule of thumb to calculate retirement needs, like 70 to 90% of your current income. To me, it’s much more accurate to use actual expenses because it gives you a true picture of what your spending patterns are now and most likely to be in the future (especially if you live in areas with a high cost of living such as California or New York). One thing will be constant as you age: you will have to live somewhere, and therefore you will have a basic cost of living. However, your income may fluctuate all over the map as you near retirement. You might be downsized out of a job and have to find another one, you might quit your job and start your own business (and good luck in predicting your income from that), or you might decide to start receiving Social Security benefits or income from annuities. These scenarios are quite unpredictable, but you already know what it costs you to live. Why not base your projection on facts rather than speculation?

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A better way to go is to find the calculators that ask for your “expected income” during retirement, so you can then plug in your calculated Longevity Cost (per month or per year, depending on the calculator). That assumes that you want enough income in retirement to cover your Longevity Cost (but no more). The following calculators will still require that you estimate your income sources (which I will address in detail in Chapter 6), but you might want to consult these for a quick estimate. Here are a few calculators that use your expected income instead: 1. http://www.tdameritrade.com — (Click on the “Planning and Retirement” tab, then the “Retirement” tab, then the “Tools and Calculators” link in the left margin.) There are 10 different calculators here to use; try the “Retirement Planning” calculator, which calculates on the basis of retirement income needs and retirement savings. 2. http://www.agedwards.com/public/content/fcgi/calcs/retplan.fcgi — This calculator uses annual retirement income needs, savings, investment value, and factors in inflation. 3. http://www3.troweprice.com/ric/RIC/ — This one uses anticipated monthly income needs. Remember that even these calculators represent a quick measure at a high level. To get a more accurate look at what lies ahead and to put together a more accurate plan, you need to take your Longevity Cost result from this chapter, then evaluate lifestyle changes as addressed in the next chapter, and then you can figure out where to find the money (see Chapter 6).


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Step-by-Step Guide for Using Quicken to Calculate Longevity Cost NOTE The following guide was developed using Quicken Premier 2007. Your version of Quicken may be slightly different. Consult with your Help application to find the right actions and functions for your version. If you want to upgrade or purchase Quicken, go to Intuit’s website, http://quicken.intuit.com/, where you can find the version best suited to your needs. 1. This guide assumes that you already have one or more accounts set up and that you are entering data on a regular basis. If you are only tracking one account (such as a checking account), and you want to be able to categorize other expenses like credit card charges (advisable), then you may want to set up another Account and enter data into it. To set up another Account, go to the top navigation bar and click on the “Cash Flow” menu and then select Go To Cash Flow Center from the pull-down menu. Near the top will be two boxes—“Spending and Savings Accounts” and “Credit Accounts.” Below whichever one applies, click on the Add Account button and follow the prompts. Once set up, enter the amounts as usual. 2. Make sure that you have the appropriate categories set up for all of your expenses as outlined in this chapter. If you need to add Categories, go the “Cash Flow” menu, and select Category List from the pull-down menu. You will see all the Income and Expense categories displayed. If you want to hide some of those on the list, check Hide. If you want to add categories, then click the New button in the lower-left-hand corner and fill in the pop-up menu. The new category will now appear on the list. You can also change categories for amounts you’ve already entered in order to examine the key categories addressed in this chapter. To re-categorize, go to the Register for that account. Click on an entry, and then select the category for that entry and select the new category from the pull-down menu. Then click Enter.

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3. When you have all the amounts entered for the year, or at least for one quarter (3 months), then you can create a report. Go to the “Reports” menu, select Spending from the pull-down menu and Spending by Category from the menu to the right. A window will appear with a pie chart and totals by category. In the upper left-hand corner of the window, you can change the date parameters. If you are doing your summary for the whole year, then put in those dates. If you are doing it for one quarter, then enter those dates and your report will be automatically updated by Category. You also need to make another change so that your credit card charges aren’t double-counted. You should have entered each credit card charge separately by category so that you will get a true picture of your spending. However, “Credit Card” is also a category that you assign to the transaction when you pay your credit card bill. So, go to the upper right-hand corner of the “Spending by Category” window and click Customize. Click on the Categories tab. Scroll down the list of categories and uncheck the Credit Card category, then click OK. The corrected report will be automatically displayed. If you are using the quarterly method, multiply by 4 to get your annual cost in each category as well as the total. If you do the report for a whole year, it will more accurately represent your actual spending, however. This is what I refer to as the “Where’d It Go” report, or your Current Cost of Living. 4. When you have your annual total, then multiply it by your remaining life expectancy (Life Expectancy age minus your current age) in order to calculate your Longevity Cost. As noted in Chapter 1 of this book, use age 82 as your Life Expectancy age if you are male and 85 if you are female. 5. To do a high-level what-if analysis, you can use the Cash Flow Forecasting feature of Quicken. (This feature is available in Quicken Deluxe, Premier or Home and Business Editions.) It will give you a visual display on a line graph; you can compare two different scenarios at a time that reflect changes that you make in a category of expenses. It will also show you how total expenses will change for each scenario. It’s a little tricky to do, but these are the general steps for comparing your current scenario with a future scenario.


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To begin, go to the “Planning” menu and choose Cash Flow Forecast from the pull-down menu. You will see a graph displayed of whatever information you have in your accounts. Follow these steps to do a what-if comparison: a. In the upper right-hand corner, choose Options and select Update Forecast from the pull-down menu. Fill in the date range to read for the previous whole year (assuming you have a whole year’s worth of data; if not, use the last three months.) Click OK. Adjust the dates on the graphical display by clicking on the Previous or Next buttons in the lower left-hand corner until it displays the current year or a future year (depending on what you want to view.) You should see numerical totals of Income and Expenses in the lower right-hand corner. b. This first forecast will be your baseline view. Don’t close this window until you have created the second one for comparison. Make sure that the dates on the graph are displaying future dates, otherwise you won’t see the comparison. It’s a good idea to adjust the dates on the graph to show the following calendar year just to make sure. To create the second one, go to “Options” in the upper right-hand corner and select Manage Scenarios. Click New, and give this new scenario a name. Under “Display Options”, select Current Scenario only and uncheck the other selections. Click Done. Now you will see the title of the cash flow change to the new name at the top of the cash flow window. c. Now you will change some expenses so you can do a comparison. With this new scenario window still open, click on the Expenses button in the lower right-hand corner. Scroll down to one of the categories you want to change (such as Health Insurance or Medical) and select the line item. Change the amount to reflect an increase (or decrease, as the case may be.) Click Done. You will now see a different expense total in the lower right-hand corner.

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d. To compare the two scenarios, go to “Options” in the upper right-hand corner, and select Manage Scenarios. In the Scenario data window, you should see your new scenario name showing. In the “Display Options” section, check the option “Compare Current Scenario with” and then select your base scenario from the pull-down menu. Click Done. You will now see 2 lines on the graph, and the second one (in this example, the baseline scenario) will be in green. (If you want the new scenario to be in green, then you can go back to the “Manage Scenarios” window and choose Baseline Scenario at the top of the window, and choose your new scenario in the “Compare with” window.) This gives you a visual representation of your what-if scenario. You can only compare two scenarios at a time, but you can generate several different ones for different expense categories and do several comparisons.


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C h a p t e r

5

Longevity Lifestyles

Now that you have estimated your Longevity Cost, you have some decisions to make regarding your lifestyle. Just a warning: these are going to be uncomfortable and stressful decisions to make. You may have to disrupt your current lifestyle as you know it, just in order to have enough money to live those extra decades. It’s kind of like putting the rest of your life on a budget, starting from square one. These decisions you make will affect where and how you live, will affect your family, your friends, and your legacy.

How are we doing? In a 2004 Congressional Budget Office study,19 Baby Boomers were analyzed for the amount of retirement savings they had and whether they expected to have to change their lifestyle. Half of the Baby Boomers expect to maintain their working-age standard of living during retirement. About one-quarter of Baby Boomers have failed 19. “The Retirement Prospects of the Baby Boomers”, Congressional Budget Office, March 18, 2004, p. 1-4. http://tinyurl.com/32sgam


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to accumulate enough savings and are poised to depend entirely on government benefits. The remaining one-quarter of Baby Boomers will have to experience moderate declines in their standard of living. Which category are you in? If you are in the first group that wants to maintain your current lifestyle, does your Longevity Cost fit with your projected savings? If you will have a shortfall, then you may be in the same boat with the other 50% of the Boomers who will have to make some changes in their lifestyle. The remainder of this chapter lists some of the major decisions that you may have to consider.

Where will you live? Until the last five years, housing choices for older citizens had been quite limited. People either stayed in their existing single-family home or apartment, or moved to a “retirement community.” Those who needed continuous medical care would have to head to some form of nursing home or “home for the elderly.” Now, there are more options to consider. There are 55+ adult-only housing developments with choices of single-family homes, town homes or apartments within the development. These adult communities may be built in suburban or urban areas, and some are even being built in rural areas or small towns. These developments may also include retail establishments within their borders, or be built near or around retail stores. They may offer transportation, community activities, common parkland and recreation facilities and services such as housekeeping. For those who may need more medical care there are integrated senior living facilities that have several levels, such as independent living, assisted living and full nursing care - all within the same development. Senior or elder “cohousing” projects are also emerging as an updated version of the communes from the 1960s. They are a variation of adult 55+ communities, in that they have living space and communal space, but they differ because the residents participate in the design, development, and management of the community from the beginning.

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Chapter 5: Longevity Lifestyles

Will you live in a suburb, urban area or out in the country? As Boomers, we not only grew up in the suburbs for the most part, but we are also staying in the suburbs. The 2005 Housing Study by the U.S. Department of Housing and Urban Development found that 49% of Boomers live in a suburban area, while 27% live in an urban area and 24% live in a nonmetropolitan area.20 Many people who have lived in a suburban environment find it less appealing as they grow older due to noise, children, dogs, housing density or having to drive everywhere. Some may migrate to an urban environment where driving may not be a necessity, or to an adult community that is quieter. Others may decide to retreat to the countryside, or a “second home” in the mountains or a resort area.

Downsizing If you are concerned about a shortfall of retirement savings, you might want to consider downsizing now to save some money. Compared with the generation before us, fewer Boomers are homeowners (76% for us compared to 81% for our parents’ generation), but we own larger, single-family homes; 60% of us have homes with 6 or more rooms.20 We also own more expensive homes (the median value is $170,000) and 70% of us still have mortgages on those homes.20 Sounds like a few of us might be thinking about downsizing. If you have to downsize, how soon do you have to do that in order to have enough money to support your longevity? Downsizing might be a choice or a necessity, depending on your longevity resources. Some retirees want less “house” to maintain and decide that a condo or town home is easier to take care of and may also cost less. You may also have to decide whether to own a home versus renting one. Whether you can feasibly downsize depends on several factors. If you still plan to work for several years, can you find more economical housing within a reasonable commute distance, or can you telecommute? If you’re a homeowner, how much could you sell your 20. “The Baby Boomer Generation: What We Can Learn from the 2005 American Housing Survey,” U.S. Department of Housing and Urban Development, 2006, p. 1-12. (hereafter cited as “Baby Boomer”) http://tinyurl.com/2vdmrz


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home for and what would it cost for a smaller one (or to rent one if you choose not to own?) In evaluating this scenario, you need to examine other factors that can diminish your savings; it may take months or longer to sell your home and you’d still have to pay your current level of housing costs during that time. The other major factor is capital gains taxes if you sell your house for a considerable gain. Although tax laws can change frequently, the tax laws are such now that you can be hit with a huge capital gains tax or alternative minimum tax even if you qualify for a $500,000 exemption. For people living in areas with high housing prices such as California or New York, these are serious issues, so you really should consult with your tax accountant in order to evaluate the tradeoffs.

Geography You may also decide to move to a different city or state. The 2005 HUD study20 indicated that 58% of Boomers now live in the South or West, 23% live in the Midwest and 19% live in the Northeast. If you end up moving to some other geographic location, how will you choose it? Do you want to be in a milder climate, closer to family, or close to your current doctors, shopping or an airport? Climate has been a big driver of where people retire. Due to its mild weather, thousands of people have retired to Florida through the past few decades. But after the increased hurricane activity of the last three to four years (and that is expected to continue), many retirees can no longer afford their homeowner’s insurance because rates have risen to unprecedented levels. Some retirees even lost their homes in the recent hurricanes and can’t afford to rebuild there. Proximity to family as you get older is another driver of where you live. Some people want to be closer to family; others move to get further away. It all depends on your relationships with your family.

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Moving Moving is not fun, and the older you get, the harder it is. I just moved my household and business within the last year from one end of the state to the other, and I was physically and mentally exhausted for weeks (and we hired a major moving company who did most of it!) The physical stresses of packing and unpacking, and sorting and hauling, and getting rid of furniture and shopping for other furniture can be overwhelming, and we are not as young as we used to be! Add to that the mental stress of having to make a million little decisions about everything involved in a move: what to keep, what to throw away, how to pack it, where it goes in the new location, whether it will fit in the new house, which contractors to hire, changing a thousand addresses, dealing with the post office on both ends because they can’t seem to get it right, shutting off utilities and starting up new services, and none of that even includes all the mountain of decisions involved in selling a house, looking for and buying another house and going through two escrows at the same time. I’m tired just listing it all. So that’s what you’re faced with when you move. Are you really ready for that?

Cutting Back You can stay where you are and decide to cut back on expenses, too. People can cut expenses in many areas, and some of them may not be so pleasant, such as vacations and travel, entertainment, clothing, and dining out. In other words, you may have to put yourself on a BUDGET. This is when your Longevity Cost analysis will really come in handy. Take a look at the categories and figure out which ones are candidates for cutbacks. Once you identify the areas, do an estimate of how much you would save if you cut back each item by 50% starting next year, and so on. You will probably find several areas that you just don’t want to cut back right now, even reducing a few expenses will really add up over a 5- or 10-year period of time.


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Marriage Issues People in marriages or partnerships who are not getting along and have entertained thoughts of splitting up may want to think long and hard as to whether it makes more sense to try and make the relationship work. There is more at stake than just your relationship as you head into your senior years. Except for truly abusive or irreconcilable situations, it may be wise to evaluate the cost of splitting up (financially and emotionally.) If you split, each of you would have to find somewhere to live, so housing expense would be doubled or more. That goes for furnishings and other household goods that would have to be divided up and replaced; all of that adds up as well. If your spouse is providing your medical benefits, that’s a huge issue; would you be able to get health insurance on your own? Splitting up retirement savings may also be an issue if any accounts are jointly held, and if there are any premarital agreements in place, the assets might not be able to be divided equally either. I hate to put a damper on your plans for divorce, but you don’t want to jump out of the frying pan and into the fire.

Two to Tango There is also the reverse situation. In the 2005 Housing Survey by HUD,20 they found that 25%, or 10.8 million of the Baby Boomer households were headed up by people who lived alone. That’s a lot of unmarried people. After coming to grips with Longevity Cost, unmarried people may think about getting married. Of course, that may not be the only reason; people may be lonely and want a companion, and a dog just won’t suffice. Or, they may be looking for love. Those of course are legitimate reasons to seek a mate at this stage of life. But the financial incentive is still a really good reason to consider it. There is a financial benefit, especially with housing, because only one house is needed rather than two. If marriage or a committed relationship is not an option, how about a roommate? I always think about the long-running wacky TV series, The Golden Girls, about four senior women sharing a house in Miami.

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Whether a roommate pays rent or is part owner of your home, that particular arrangement may mean either income for you or sharing of expenses, and that would benefit both parties.

Gifting and Charities Many Baby Boomers have been quite generous to charities and non-profit causes throughout our lives, and are in the habit of making annual contributions as a way of giving back to society. If your Longevity Cost is high, you may have to rethink your giving strategy, at least in terms of annual cash flow. Remember that first you have to be able to live and pay your basic expenses before you can give to others. However, that doesn’t mean you should be a scrooge and stop making charitable contributions. There are many other ways to make contributions. You can volunteer your time for these organizations or provide free services to them. You can also earmark charities in your will as a beneficiary, which in some cases may result in a larger gift to them in the long run. Using that approach assures that you will have enough to live on, and after you die, they receive the contribution. I have personally designated two charities and one educational institution as beneficiaries in my will. You may also have to rethink your gifting practices to your family and friends. Perhaps you are one of those very generous people who send elaborate gifts or large checks to family members and friends for birthdays or holidays. You might want to look at your Where’d It Go Report to see just how much you spend each year. If you have a large family, you may be surprised how fast it adds up. Although some people might think it’s rather crass to mention this, but are your gifting practices unilateral? If you continue to give gifts to family members or friends but never receive any in return, does it make sense to continue doing that? You might claim that you do it because it’s something you want to do or maybe you want to be known for your generosity. But there comes a time when you’re on a budget and you may have to draw the line and say enough is enough. You can have a frank conversation with them and tell them that you will be on a fixed budget and may have to find other ways to show that you are remembering them on holidays


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and their birthday. Send a greeting card, or call them on holidays, or get the family together and donate your time to a soup kitchen rather than giving expensive gifts. That’s a win-win for everybody.

Complex Decisions Planning the remainder of your life is not easy. Every decision you make affects something else. There will be an upside and a downside to everything. You’ll undoubtedly be faced with a tradeoff, and you’ll just have to decide what will be best for you and your family. Let’s look at a hypothetical situation. Suppose you are unmarried, and your ideal situation is that you want to move to a small condo in Hawaii, close to family, within walking distance of shopping, and you want to move there NOW. Sounds great and you’ll save money in the long run. However, the downside is that you’ll have to find new doctors, you’ll have moving expenses and stress, you’ll need to sell your current house first, you’ll have to find at least some part-time work while you’re there, and you’ll be on a budget such that your travel will have to be cut way back (and you’ll be on an island.) Suddenly your ideal lifestyle plan may not be so ideal. Any time we make a decision regarding one aspect of our lifestyle, something else may be affected.

Adjustments to Your Longevity Cost You may have to think about whether you need to make some lifestyle changes based on the issues raised in this chapter. If so, take some time to estimate how these changes might affect your Longevity Cost, using the what-if analyses described in Chapter 4. You might want to create two or three different scenarios to consider, so that you will be prepared with the numbers before we examine sources of income in the next chapter. Appendix A will also show you how to apply the adjustments to your Longevity Cost.

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C h a p t e r

6

Finding the Money

How Wealthy Are You? Now that the depressing part is over and you’re starting to get over the shock of Longevity Cost, it’s time to take action and find the money. You need to figure out how much money you have now and what sources of money you will have at retirement age (which may be a depressing exercise also, no guarantees!). From now until your life expectancy age, there are several possible sources of income: • Ongoing income from working for x number of years • Social Security benefits • Savings • 401(k) plans and IRAs • Other investments (stocks, bonds, annuities) • Real estate • Other assets


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• Pensions (lucky you, if you have one that’s still solvent!) • Inheritances (lucky you, again!) The following sections describe these various sources of income.

WARNING I am not a personal finance expert. My purpose here is merely to make you aware of possible sources of income to pay for retirement, not to recommend which ones you should pursue. For expert advice, contact a certified financial planner or an investment advisor to find out how best to manage your asset portfolio for your own personal situation.

Income from Working How long you decide to keep working depends on multiple factors: financial need, level of health, benefits, intellectual and creative stimulation, avoiding boredom, availability of jobs for older workers, personal fulfillment and corporate retirement policies. We’ve all been hearing the ads on TV that we Boomers are going to “redefine retirement” or we won’t be content to “play shuffleboard,” and that we will now have the time and money to “follow our dream” as extremely active older adults. We see the images of couples sailing around the world or going on safari or traveling to some exotic place. But notice how we don’t see any images of Boomers just staying in their current jobs (and possibly enjoying it?) The cold reality for a great number of us is that, like it or not, we may have to stay in our current jobs or continue working in our field, which may not be our “dream.” Most Baby Boomers I know plan to keep working past the age of 66, for various reasons. The most common reason is financial need; many Boomers simply don’t have enough money to last those extra decades. The second most common reason is avoiding boredom; working may not be our dream, but it’s better than sitting around with nothing to do. The personal stories in Chapter 8 reflect a variety of views on whether to continue working or not.

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Chapter 6: Finding the Money

If you’re planning on continuing to work longer than you expected, then you may be faced with other challenges. Your employer may have mandatory retirement policies or they may not be “elder-friendly” and instead favor younger workers. If you look for another job, you may find it difficult to be considered for a position due to age. Even though some recent studies project that there will be a dramatic shortage of workers as Boomers start retiring and that companies will have to reconsider their policies, companies haven’t been too swift in either retaining older workers or creating new positions for older workers. If companies don’t start drastically changing their policies in the next five years, millions of Boomers will already be out of the workforce. If circumstances allow, some Boomers may choose to continue working at their jobs until official retirement age, but reduce their hours to part-time or the minimum number of hours to retain their benefits. That may be an option, but bear in mind that if your salary decreases prior to age 66, your future Social Security benefits may be affected (in other words, they could be reduced.) Your monthly Social Security benefit is calculated based on average amounts during your working lifetime, and assuming that your current social security earnings will continue until your SSA-designated retirement age. The Social Security website has several benefit calculators to help assess the effects of reducing your earnings.21 Use the second one, the “Online Calculator,” to do a what-if analysis for effect on pre-retirement earnings. Take the Social Security earnings from your most recent SSA statement (see “Social Security Benefits” on page 57) and input them into the form, then project your income for your current year and into the future. For example, I put in all my actual earnings for the last 35 years and then I plugged in numbers to calculate the difference for future earnings. I used an arbitrary amount of $60K in earnings per year between now and retirement age of 66, versus a “half-time” amount of $30K per year. I would lose $495 per year in future Social Security benefits, and over 20 years from retirement until life expectancy, I would lose $9840. On top of that, I would lose the extra $30K of income during those years I worked on a half-time basis. So, for those of you wanting to slow down and work less now, you should consider this impact. 21. Social Security Online, Choose a Benefit Calculator. http://tinyurl.com/yobgab


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On the other hand, for those Boomers who want to work and receive earnings at current level from retirement age (66 for most Boomers) until age 70, you will receive an 8% increase in your monthly Social Security benefits when you retire (at age 70). Why? Because not only are you delaying retirement and not draining money from the SSA coffers, but you are also paying Social Security taxes into the system. Based on Social Security issues alone, it’s in our best interests to continue working full-time or at full earnings as long as possible. During these pre-retirement or early retirement years, some Boomers decide it’s the perfect time to start that business they’ve always wanted. So, they make plans to leave someone else’s employ and take some savings and just go for it. Several cautions are in order. For those of us who are already self-employed, we still remember how hard it was to get started and to generate our first revenue, and we have learned to live with total uncertainty about where our next dime comes from. Be prepared to spend money instead of making money for the first year or more. You will work longer hours than you ever did at your old job; do you have that kind of energy? It may take months or longer to find your first customers or clients. When you do start earning income from your business, there will be no way to predict how much you will earn this year or next year or five years from now. It could be zero and it could be a million dollars. You will have to find and pay for your own benefits. All the while you will be spending your working capital, or worse, draining your retirement savings. Is that really something you want to be doing at this stage of your life? I don’t want this to sound like a doomsday scenario, but if you really want to go down that road, do a thorough business plan first and also examine the impact it will have on your retirement savings. If it still seems feasible, then by all means go for it. If you are already self-employed or own your own business like me, then you know the drill about trying to forecast your income from it. We can’t. We may have some good years or bad years between now and when we retire or stop working. We may be in a business that is dominated by youth, making it difficult to continue to find new clients or customers. We can just hope for the best until we decide it’s time to close down our business, which brings with it a whole other set of considerations.

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Closing a business may be just as much work as starting up a business, except in reverse. We may decide to sell our business to someone else if it’s appropriate, and we may receive proceeds from that or perhaps a continuous income stream from the sale if the buyer wants to pay over time. If selling the business is not an option, then we need to sell off inventory or assets, and notify existing customers or clients that we are ceasing operations. You may have to identify other companies or vendors that you can recommend to your existing customers or clients. If you have a website or are listed in directories, you will have to decide when to pull the plug and post notices that you are no longer in business. How ever you do it, make sure that you give your customers notice and treat them like royalty because you never know whether five years down the road you may change your mind and want to do work for them again.

Social Security Benefits Just when you had it all figured out and had counted the years left until turning 65 so you could get back all those benefits you paid in, the government decides to raise the full retirement age to 66. That is the official age for boomers born from 1946 to 1954; for those tail-enders born 1960 to 1964, the retirement age is 67. But don’t hold your breath, because the government is getting very antsy about all those Boomers hitting the Social Security system at once and draining the accounts, they may raise the retirement age once again before we have a chance to receive our first check. So how much will you receive in monthly benefits from Social Security? You need to look at your latest statement from the Social Security Administration, “Your Social Security Statement, Prepared especially for (your name).” You should be receiving these annually. If you haven’t been receiving them, contact http://www.socialsecurity.gov or call 1-800-772-1213 and request your statement. This four-page statement shows your estimated benefits based on your recent earnings, as well as a record of your annual earnings from the beginning of time (i.e., the first year you paid any Social Security taxes).


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The amount you’ll be paid will fluctuate greatly for each individual. These estimated monthly benefits are just that: estimates. You won’t know exactly how much you’ll receive until you apply for benefits. Between now and then, the laws can change and your earnings can change. However, the amounts shown on these statements are a good guide for planning. When to apply for benefits is up to you, but you should bear in mind the discussion in the previous section about working. You may be better off waiting until age 70 to collect benefits if that is feasible for you because you will receive 8% more in benefits. However, you have to weigh that against the Social Security benefits that you would lose by waiting; this may be important if you think your life expectancy may only be 75, for example. You can also choose to receive benefits while you continue to work. In that situation, your monthly benefit may actually increase due to your increased earnings. Lastly, you can choose to apply for benefits early—at age 62—and you will receive reduced benefits (25% less at age 62.) The Social Security Administration website has lots of documents that will help you examine the tradeoffs for your own particular situation, especially Publication 05-10035, “Retirement Benefits.” 22

Savings Our parents and grandparents told us from an early age to save those pennies for a rainy day. We didn’t envision using those piggy banks to pay for our retirement, however. Most Baby Boomers don’t have much of a savings ethic; we much prefer to spend. Now that’s coming back to haunt us because we may not have saved enough money for retirement. However, it’s never too late to start. If you plan to continue working until your retirement age or longer, you may be able to save some of those earnings for retirement.

22. Social Security Retirement Benefits, Publication No. 05-10035, Social Security Administration, p.1-19. http://tinyurl.com/2v8rra

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Savings may be as simple as a bank savings account, or a Certificate of Deposit or a Money Market account with banks or other financial institutions. Many people regard savings accounts as somewhat archaic because of all the other investment options available today with better rates of return. However, if you need to temporarily park some money from the sale of assets, or save up to buy a house or car, or want to just keep some liquid assets available, savings accounts will do the trick. They are low-risk, easy to set up and manage, and come in handy.

401(k)s and IRAs Sometime during our mid-career advancement up the organizational ladder, we started getting lectures from our benefits departments about a new type of retirement account: the 401(k). It started in 1979, and was designed to provide a tax-deferred vehicle for socking away money through our own contributions, often matched with our employer’s contributions. Financial advisors told us over and over to make the maximum contributions allowed, so that we would accumulate a great nest egg. We carefully chose the allocation of monies to stocks or bonds. And then in the stock market “correction” of 2000 to 2002, many of us saw our 401(k) balances shrink to half of their former selves. Suddenly our retirement didn’t look so rosy, and we were resigned to the fact that we had to continue to work a lot longer and harder to make up for the losses. How did we Boomers fare? Boomers who were in their 40s and 50s in 2003 had a maximum average 401(k) balance of $140,000, and many had considerably less.23 Some Boomers have borrowed from their 401(k) plans and may have outstanding loans when they retire, compounding the problem. The lesson here: our 401(k)s will be an excellent source of retirement income, but the balances will fluctuate drastically with the economy and the financial markets, over which we have little control.

23. “FDIC Outlook: Are Baby Boomers Financially Prepared for Retirement?”, Federal Deposit Insurance Corporation. http://tinyurl.com/2hewsk


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Individual Retirement Accounts, or IRAs, have been around longer than 401(k) plans, starting in 1974. There are many types of IRAs available today; they can be after-tax or pre-tax, and can be employer-provided (SEP and SIMPLE IRAs) or self-provided for those who are self-employed (Traditional and Roth IRAs). Traditional IRAs may be tax-deductible for the tax year you make a contribution depending on your income and other plans you have in place, and you don’t pay taxes on them until you withdraw the funds. You can make contributions to a traditional IRA until you reach the age of 70½. Roth IRAs are made with after-tax income, and therefore aren’t taxed when you withdraw the money; they also have no age restrictions. The guidelines for annual maximum contribution amounts do change as IRS rules change, so it’s best to check with the IRS each year before making a contribution. The oldest form of retirement account is the 403(b) retirement plan, established in 1961. It is a tax-advantaged salary deferral retirement program for employees of educational institutions and non-profit organizations. These plans are sponsored by the institution, which acts as a fiduciary, and they are similar to 401(k) plans in terms of contributions and rollover options. However, participants can’t invest in individual stocks, unlike 401(k) plans. They can only invest in insurance company annuities, mutual funds, or church retirement income accounts. Participants can withdraw money from their 403(b) plan at age 59½.

Other Investments You may have other assets that can be sources of income, such as stocks, bonds, mutual funds, annuities, and life insurance that you can tap into to supplement your tax-deferred retirement plans. Don’t forget to consider these other sources. Consult with your financial advisor about the right balance of stocks, bonds, annuities or life insurance that make sense for you given your Longevity Cost.

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Real Estate Real estate can be a source of income in five different ways: downsizing, rental income, selling investment property, home equity, and reverse mortgages. If you downsize to a smaller home, you may make money by selling your present home and moving to a less expensive one. Also, if you own investment property, you may have rental income on an ongoing basis. You can also sell your investment property (or vacation home) and realize proceeds from the sale that you can use to help fund your retirement. If you have a lot of equity in your home, you can usually get a home equity loan or line of credit for temporary funds (you’ll have to pay it back) or you can refinance your home to get a lower mortgage rate and take money out of your home to help fund retirement. You can also consider reverse mortgages, which are addressed in the following section.

Reverse Mortgages If you choose to stay where you are, you may be able to get a reverse mortgage tied to the equity in your home, and that will provide a source of cash flow for you. Reverse mortgages were created to allow older Americans to convert part of the equity in their homes into cash without having to sell their homes. With a regular mortgage, you make monthly payments to a lender, but in a reverse mortgage, the lender pays you, and you don’t have to pay it back for as long as you live in your home. The loan is repaid when you die, if you sell your home or your home is no longer your principal residence. To qualify for a reverse mortgage, you have to be at least 62 years of age and currently live in your home.24 Some lenders limit the amount you can receive from your home, which will be less than 100% of its current market value. They also will require you to pay off any existing mortgages on your home. You can receive a lump sum or a monthly amount, depending on the lender as well as your own circumstances (such as age, appraisal value, where you live and current interest rates). These reverse mortgages are generally

24. “Reverse Mortgages: Get the Facts Before Cashing In On Your Home's Equity”, Federal Trade Commission. http://tinyurl.com/26ujj5


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tax-free and there are no income restrictions. Reverse mortgage loan advances do not affect Social Security or Medicare benefits. The lender does not own your home and title does not transfer. This all sounds very appealing, doesn’t it? There are lots of advantages with reverse mortgages, but also some disadvantages. Lenders charge closing costs and servicing fees, which they can arbitrarily set or change. These can be substantial. For example, one lender charges closing costs of $16,000 on a reverse mortgage of about $350,000 and a variable interest rate. So not only would the borrowers need to pay the high interest rate from the first day, but they would also owe another $16,000 when the loan is paid back. Reverse mortgages may have fixed or variable rates that may fluctuate with the economy. The interest rates are compounded and usually at a higher rate than traditional home mortgages, so the amount you owe on a reverse mortgage greatly increases over time, which may in turn use up all the equity in your home. That may mean fewer assets for you and for your heirs. “People listen to the benefits only and don’t take into account the financial and estate impacts of a reverse mortgage,” says Evie Butcher, Mortgage Consultant with FINET Mortgage of Saratoga (http://www.finetsaratoga.com/). “They serve a good purpose, but may not be for everybody. You really need to know if it aligns with your future goals. You need to consider your estate plan and the impact on your heirs. In today’s mortgage world, there are other options available and new options are being devised constantly in the mortgage industry. It’s best to find a reputable mortgage consultant, a financial planner, as well as a tax accountant to decide if a reverse mortgage is your best solution.”

Other Assets You also may have other assets that you can sell to obtain more cash for retirement. If you own more than one automobile but only really need one when you retire (or if you stop driving), then you can sell it. You may also own other household goods or valuables that you may not need and can sell to generate money (eBay, anyone?) Besides eBay or other online venues such as Craigslist, you can sell your items via garage or yard sales, through your local paper, or through consignment centers (usually for furniture and home furnishings). Some people might think that they’d have to be pretty desperate or badly in

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need of cash in order to start selling off household goods, but if you are planning to downsize or move to another area, you’d probably want to get rid of stuff anyway. While you are cleaning out your home and sorting through things, why not sell these items for cash?

Pensions Some of us worked for organizations that offered pensions for all employees. If you are in that group, and the pension fund hasn’t been dissolved or eliminated due to a merger or acquisition, congratulations! You will be one of the lucky few in this country who still can benefit from this nice additional income stream. There are two types of pension plans: 1. Defined benefit plans that are employer-funded and proved a fixed income stream during retirement, and 2. Defined contribution plans, where the employee makes retirement contributions that may be matched partially by their employer (these are 401(k) plans, described in an earlier section of this chapter). Defined benefit pension plans are like retirement accounts that you don’t have to contribute to, but you do have to accumulate several years of employment with the company before you are fully vested in the plan and can receive full benefits at retirement age. These are great plans, but are quickly becoming extinct due to economic factors. In the aforementioned FDIC study, they discovered that in 2003 and 2004, only 17% of workers were covered by defined benefit pension plans, compared with more than 41% in 1978. If you no longer work for a company where you had a defined benefit pension plan, it’s very important to stay in touch with the pension administration office to find out if any substantial changes in benefits have been made and to make sure they have your latest mailing address. Sometimes pensions make changes to their rules about when participants can begin their pensions, and the amounts may change. If you are married, it’s also a good idea to obtain information on what happens to your pension benefits when you die; some plans offer survivor benefits and some do not. This could be an important income stream for the surviving spouse.


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Inheritances I only mention this as an income source because some of you may receive an inheritance. However, don’t count on it. In a 2007 report on Health and Retirement conducted by NIH and NIA, a typical Boomer child of a parent born in 1923 or earlier can expect a very modest inheritance: a median of $8000 and an average of $47,000 depending on relative wealth of the parent and number of children in the family, and 20 percent will receive no inheritance at all. My advice is to never add in a possible inheritance when planning for retirement. For one thing, if the inheritance may be coming from your parents, they’re probably enjoying increased longevity as well, so they are still spending the money and might not have as much money to leave to their heirs. The NIH/NIA study in fact found that of the study participants who were 70 to 74 years old, they will spend more than 60% of their current assets during their retirement, leaving the remaining amounts for bequests.25 Secondly, people are fickle and families can have feuds, so nothing is ever guaranteed. You or your sibling might look at your parents cross-eyed and they could change their will. You are not in control of their situation, they are. If it happens, and you inherit some money or even a lot of money, then good for you. Then—and only then—should you consider how to spend it.

Adding it Up Gather together your latest statements from all of your various accounts, including your latest Social Security statement. Estimate the value of other assets you might have or other sources of income. In order to estimate how much more working income you’ll have, assume you’ll be working at your current income level until you are 66 or 67 (depending on what you Social Security statement says.) Add everything up, and see how it compares to your longevity cost. How does it look?

25. “The Health and Retirement Study”, 2007, National Institutes of Health and National Institute on Aging, p. 1-108. http://tinyurl.com/yvqzlg

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If Your Projected Income is Greater than your Longevity Cost Good for you! You’ve worked very hard and should be congratulated for your insight and planning. You might be among the lucky Boomers who get to work a few years less and play a few years more than the rest of us. You might be able to leave a legacy, leave money to your heirs, travel the globe, and pursue new educational opportunities. Now you just have to decide how to spend your money and when, so don’t become too complacent because you still need an action plan.

If Your Projected Income is Less than your Longevity Cost Welcome to the club! You will have lots of company. You’ll be moving into the retirement community with the rest of the hardworking souls who just didn’t have as much luck as those other people traveling first class around the world. But that doesn’t mean you can’t be happy. You just have to do a little more planning, and fast! There are several ways to accumulate more funds to cover your longevity costs: • Save more money starting now—in savings accounts or IRAs or 401(k) plans • Work a few years longer than planned if possible • Re-adjust your investments—work with your financial advisor to find ways to increase rates of return • Sell assets that you can do without


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Paying for your Newfound Longevity At this stage of the process, you now have a better idea of how much it will cost to fund your longevity and some idea of how you will pay for it. You’ve now looked at the cost side of the equation, made some adjustments, and looked at the income side (Appendix A contains a full example of these steps). In other words, you’ve done a basic retirement plan; congratulations! In addition, you may have some additional things to think about and some decisions to make that will affect you and your family. The next chapter will help you work through those decisions and examine the tradeoffs.

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Part III Decisions and Inspiration During this stage of life, the decisions we make about our lives impact our families and our legacy. These are not issues that should be taken lightly, but should be discussed with the people that will be affected by them, such as your spouse, your family or perhaps your heirs. Chapter 7 is a checklist in workbook format that will help you conduct these discussions and make tradeoff decisions as you fine-tune your plan. To give you ideas and inspiration about how other Boomers have been dealing with these issues, Chapter 8 is a collection of personal stories that reflect different living situations. Perhaps you will get some ideas that will help you with your decision making and planning. Finally, Appendix A contains a full quantitative example of a longevity plan, including Longevity Cost, Income Sources, and the impact of making adjustments.

C h a p t e r

7

Boomers March Forward

Nothing keeps us down for long. We are Boomers and we shall overcome. We know how to plan, to mobilize and take action. Let’s get going. It’s decision time. The goal here is really simple: to cover your Longevity Cost so that you don’t outlive your retirement savings. If you die with money left, your heirs win. Everybody’s happy (unless of course, someone contests the will, but I digress). As you are putting your action plan together, you need to discuss these options with your family—that is, the part of your family involved in your cash flow. The list of decisions to be made is presented in a workbook format, so that you can enter this information in one place. This will provide a checklist for doing research and estimates, analyzing the tradeoffs in order to make these decisions, and evaluating the impacts. Once you have gone through this checklist and made some decisions, you can use the example in Appendix A to make adjustments and develop a quantitative version of your longevity plan.


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BASELINE PLAN My (Our) Longevity Cost: My (Our) Projected Income (now through life expectancy): Difference (shortfall or surplus):

DECISIONS AND IMPACT If Your Projected Income is Less Than Your Longevity Cost (shortfall): For each of the following categories, you need to identify what you can do, estimate the dollar amount, and describe the impact on your family (positive or negative). 1. How can I reduce my Longevity Cost? a. Income Taxes: b. Health Insurance: c. Other Insurance: d. Medical expenses: e. Automobile: f. Gifts: g. Charitable Contributions: h. Other (utilities, discretionary):

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Chapter 7: Boomers March Forward

2. Housing Issues: Do I need to move to a less expensive area or home? a. Option 1—different geographic area, monthly savings: b. Option 2—downsize to smaller house, monthly savings: c. Option 3—downsize from a house to a condo or town home, monthly savings: d. Option 4—(if single)—get a roommate, monthly income or cost reduction: 3. Would I (we) have enough money for long-term care if needed? a. Cost of long-term care in my area: b. Source of funds for this: c. Cost of long-term care insurance premiums: d. Amount insurance would cover: 4. Income from Working: How long will I work and at what level? a. Number of years remaining full-time: i. Impact on Social Security benefit amount: b. Part-time work: i. Impact on Social Security benefit amount: c. Start a business:


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5. How can I find more income? a. Delay Social Security: b. Savings: c. 401(k) and IRA contributions: d. Change investments or re-balance portfolio: e. Real estate (investment property, reverse mortgages): f. Selling assets:

Special Considerations for Those Who Are Single/Child-free: 1. Do I have enough money to pay for caregiving if necessary? 2. Should I get long-term care insurance? 3. Do I want to designate heirs, or should the leftover money be given to charitable organizations?

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If Your Income will Cover or Exceed your Longevity Cost (surplus): For those of you lucky Boomers who have done excellent planning and will have sufficient or even excess funds for your increased longevity, bravo! You should be commended for working hard and/or doing your homework and/or having the discipline to save money when you could have spent it instead. However, if you have no worries about cash flow, you still may have to watch your budget or make other decisions about how much you want to spend. Here are a few of those questions to ask yourselves. 1. Should I move to a different area or more expensive home, and can I afford it without adversely affecting my retirement savings? 2. How much travel can I afford? 3. Can I stop working sooner? a. If I did, what would I do with my time? 4. Can I increase my gifting and contributions? 5. How much will my heirs receive?

Setting an Example for the Next Generation Throughout our history, Boomers have been known to come up with new ways of doing things or have set new trends or have raised new issues that have an impact on future generations. I’m sure that we will do the same with our newfound longevity.


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As long as we do our planning, we have the ingenuity and creativity to figure out how to lead enriching, exciting lives until our very last days. That will be our legacy for the next generation. I believe that we will not only redefine what “retirement” means, but we will retire the word “retirement“! I’m sure that some creative Boomer out there will come up with a new term for the fourth quarter of our lives. We will make our exit with a bang in the same way we made our entrance: “The Boomers are (were) here.”

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C h a p t e r

8

Personal Stories

I did a brief survey with several Boomers to get an idea as to where people were with regard to thinking and planning for their longevity. My intent was not to gather specific quantitative information, such as income and expense levels; I didn’t want you to get hung up on someone else’s “numbers,” because yours are going to be different. When it comes to the quantitative side of things, you should look at your own situation instead, using Appendix A as an example and plugging in your actual numbers. My intent in including these stories is to describe how some Boomers are making decisions and plans for living those extra decades. From their stories, I hope you will get ideas that will help you not only to survive those extra decades—but also to prosper. The following brief stories were obtained from people with varied living arrangements (and I changed their names to protect their identities). I have included married couples who are child-free and couples who have children. There is also one story of a couple who are domestic partners, as well as two unmarried women. Most of these Boomers seem to be diligent financial planners, and they understand the impact of their


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newfound longevity and have accounted for it in their plans. I hope that these personal stories inspire you and help you with facing your own longevity.

Susan and Evan: Married and Child-free Susan and Evan live in northern California. Susan is still working full-time and traveling a lot for business; Evan has had his own successful business for many years and works out of their home. They haven’t really thought much about the impact of their increased longevity on their retirement funding because they have done careful planning already and are not particularly worried about outliving their retirement savings. Their goal is to make sure that they leave very little behind because they have no direct heirs. Evan believes that their health insurance will continue to increase until they both are 65, but will then decrease (due to Medicare). Beyond 65, he sees their medical expenses increasing. After 65, they plan to spend less on automobile expense, gifts, and charitable contributions. Evan believes their income taxes will continue to stay the same. Susan and Evan are aiming to retire in two years, and until then, plan to continue working at least part-time. After that, their primary sources of income that will last them through their longevity years include Social Security, a pension, an annuity, and return on their investments. Susan and Evan don’t plan on moving or downsizing when they retire; they plan to stay in their dream home that they built several years ago, with the plan of ultimately retiring there. Without the requirement to financially support any family members, they feel secure about having enough money to comfortably spend their longevity years doing what they enjoy: their hobbies, traveling, and relaxing.

Barbara: Unmarried Barbara lives in Austin and is a business consultant for high-tech companies. She currently is renting and also owns an investment property. Barbara has considered increased longevity in her retirement planning even though she may have a genetic factor that might decrease life expectancy. To allow for the extra years, Barbara has determined how much money would be needed in total if she was only

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Chapter 8: Personal Stories

able to draw on 4% of it per year, which is a formula she learned about that reportedly will make money last into her 90s. Even so, Barbara still thinks about the possibility she might outlive her retirement savings. Barbara expects health insurance costs and medical expenses to increase continuously, from now through age 65 and beyond. Her income taxes and automobile commuting expense will stay the same from now until age 65, but will both decrease after that. She also believes that spending for gifts and charitable contributions will decrease from this point forward. Barbara plans on working for 8 to 10 more years, and that will be her primary source of income up until retirement age. After that, her primary source of income will be Social Security and funds from retirement accounts. When she retires, Barbara may move to a different geographic location that will likely have a lower cost of living than where she lives now. She also plans to downsize somewhat and move to a smaller space. Barbara has not decided what she will be doing with her time when she is fully retired, but feels that she will have a better idea as that date approaches.

Dan and Laura: Married with Children Dan and Laura live in Silicon Valley in a single-family home and have one child who is in middle school and another child in college. They are also members of the “sandwich generation,” having elderly parents and also children simultaneously needing their care and some degree of financial support. Dan is employed full-time and is currently the primary income provider in the family. With regard to life expectancy, Dan thought he would live to about 72 when he was growing up. Now that life expectancy has increased into the 80s, Dan has adjusted his thinking a little. His father died of heart disease at age 56 but his mother is still going at 87, so if Dan splits the difference, he is estimating 73 as his life expectancy (not too far off from what he thought growing up). However, he thinks he will still live longer than 73. Has he taken that into account in their retirement planning? Not exactly. He admits he hasn’t really done retirement planning in the true sense of the word, other than making the maximum contributions to a 401(k) plan during his working years at a larger company that had a plan. Now he works at a small startup company


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that doesn’t have similar benefits. He is worried that he might outlive their retirement savings, but feels he isn’t alone; that there will be about 45 million other people in the same boat. Dan thinks their spending patterns will be relatively constant until retirement, as long as he can continue to work until age 65. Without a job, he estimates that their health care will cost about $1200 per month or possibly more. He is hoping (along with many of us) that there will be mandatory universal health coverage that may still happen sometime during the Boomer retirement years. Dan and Laura still have children requiring their financial support; a college-age son for 2 more years, and another son who will require about 10 more years of support. Dan plans to work for seven more years, so that will be the primary source of income prior to retirement. After retirement, they will rely on retirement savings, home equity, and perhaps part-time teaching or consulting to fund their longevity years. Dan and Laura want to stay in their current home through their retirement years, but if their financial situation is such that they have to tap into their home equity, they may have to move to a smaller house and/or to a different geographic location with a lower cost of living. If they have to move, they will choose a low-cost area of the country and stay in touch with family and friends via Internet and frequent plane trips (which will be affordable due to the lower cost of living.) During retirement, Dan and Laura plan to spend more time with their family and be in more constant communication with people than they are now. Dan also plans to teach or work part-time as a consultant, do more exercise, and travel if they can afford it.

Cynthia and Ed: Married and Child-free Cynthia and Ed live in the Seattle area. Cynthia currently works full-time and Ed took an early retirement a few years ago. They currently live in a single-family home that they own. Cynthia comes from a family that lives well into their 90s, so they have taken that into account in their retirement planning. They are planning to save more during these years before retirement and Cynthia will work longer than she planned, but they do worry that they will outlive their retirement savings.

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From now until retirement age, they expect their expenses to remain the same, but after age 65, they believe that their health insurance and medical expenses will increase. Cynthia and Ed’s primary source of income prior to retirement will be from working, and Cynthia plans on working 8 more years until one month after her 66th birthday (which is the Social Security guideline for receiving full benefits.) After that, Cynthia and Ed will be able to tap into several sources of income for their retirement years: a company pension, Social Security benefits, 401(k) and IRA plans, savings and investments and even a possible inheritance. When they retire, Cynthia and Ed would like to move to a different geographic location; ideally, it will have more sunshine and warmer weather than Seattle. They also want to be in a smaller home and would like to find a place that is more of a planned adult community setting that has activities such as golf and arts and crafts. They want to be in a community where they can do things with people their own age. During their retirement, they are looking forward to enjoying that time: expanding their social life, traveling, some volunteering, and not having to work 50 hours a week.

Steve and Greg: Domestic Partners Steve and Greg own a single-family home in San Francisco. They are both now retired; Steve had his own home and garden improvement business and Greg recently retired as a planner with the city and county of San Francisco. Steve is currently disabled. When Greg was growing up, his father died of heart disease at an early age and he has always been concerned about whether he’d have a shorter life. He also has another genetic disorder that might lead to a shorter life span and because of that, he believes he will spend his retirement savings sooner. As far as planning is concerned, he is assuming that his financial advisor considered life expectancy in putting together his retirement plan. Steve and Greg’s spending habits are quite frugal. They don’t own a car and therefore rely on public transportation (or in Greg’s case, bicycle transportation.) They believe that health insurance will likely increase now and after age 65, and medical expenses will stay the same now but will definitely increase after age 65. Their income taxes


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will stay the same from now until age 65, but will decrease after that. They plan to decrease their spending on both gifts and charitable contributions after age 65. Steve will require financial support from Greg for the remainder of Steve’s life due to his disability. Their current primary source of income includes a retirement pension from Greg’s government job, investment income and Steve’s Social Security Disability benefits. Those income sources will continue to be the same throughout their longevity years. In addition, Greg will receive Social Security benefits when he is eligible, but hasn’t yet decided when he will opt to start receiving those benefits. Steve and Greg have already modified their lifestyle for their retirement years. Greg is an avid bicyclist and plans to continue that as long as he is healthy. Steve and Greg both travel a lot now in the U.S.; Greg would like to travel overseas, but that may not be possible due to Steve’s health issues. Steve attends several ongoing support groups and attends some cultural activities. Greg enjoys visiting museums, attending lectures and going on tours. He also volunteers for a non-profit and a cultural organization. He has developed a large international network of friends whom he has met on the Internet and in person as the result of their shared interest in a particular movie. Greg admits he is probably busier now pursuing all these activities than he ever was while he worked full-time.

Gina: Unmarried Gina currently lives in the San Francisco Bay Area in a single-family home. She is currently self-employed in the financial services industry. As a child, she thought she would live only to age 34, but she comes from a large family most of whom were healthy well into their 90s. As an astute financial planner herself, she has done detailed analyses to calculate how much money she would need to reach age 95, a daunting amount of money. She does worry that she will outlive her retirement savings, but she has a backup plan. Based on her recent experience with her mother who lives in the northeast and had no money except her Social Security, the state covers the cost of her mother’s care in a nursing home that is not covered by Medicare, Medicaid, and Social Security. Gina believes that

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if she gets to that point, she may have to do the same: move and become a resident of a state that offers the best senior assistance programs (but she is hoping that she can make it on her own without needing medical assistance). Gina has not invested in a long-term care insurance policy because she feels those policies are for people who want to preserve their estates for their spouse or heirs. For her, that is not an issue because she has no dependents. With regard to her spending, Gina believes her medical expenses will increase between now and retirement age, but will stay the same after that. She sees her health insurance costs increasing from now through retirement. Her gifts and charitable contributions will stay at the same level from now through retirement, and her automobile costs will increase the entire time because she plans to work for 15 more years, until she is 75. Her primary income sources from now until retirement age will be from working, selling assets (such as a home), and her 401(k) plan. From retirement age onward, those sources will stay the same, but she will also receive Social Security benefits. Gina plans to move to a different geographic location when she nears retirement age. A nomad by nature, Gina has lived in the Caribbean, Central America, and many regions of the United States: the Northeast, Southeast, Midwest, Mountain West, and the West Coast. For her, moving is not so much a disruption as an adventure. In California now, she is thinking about a move to Florida, where she once lived. She may split her time between the two locations in the near term, but eventually retire full-time in Florida. Prior to retirement, she doesn’t think her cost of living would change substantially if she moved to Florida or split her time, but when she is fully retired, she wants a smaller home that will require less maintenance, freeing up money and also time so she can enjoy her retirement.

Linda and John: Married and Child-free Linda and John live in southern California, where John is employed full-time and Linda is self-employed and runs a business from their home. They once thought that they would live until age 70, but now have adjusted their retirement plan for a longer lifespan. While they can, they are maximizing their 401(k) contributions, rebalancing their


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investment portfolios for longer-term returns, saving more, evaluating new business opportunities, and planning to work full-time longer than planned. They do worry that they might outlive their retirement savings. From now until age 65, they expect their medical expenses and health insurance to increase, along with their income taxes. However, they expect their automobile expense to decrease along with money spent on gifts. Their charitable contributions will likely increase during these pre-retirement years. From retirement age until life expectancy age, the picture changes. Linda and John expect all of their expenses to decrease, except for medical costs. Their primary income sources between now and retirement age will be from working, and they expect to work full-time for at least 10 more years. After retirement age, their income sources will be from vested retirement programs, retirement savings, a part-time retirement business, Social Security, and investment income. Linda and John will likely move to a different geographic location when they reach retirement age, and it will have a lower cost of living than where they are now. However, they don’t plan to downsize from their current house, which is adequate for them and their home business (and they want to be able to continue that business into their retirement). During retirement, they plan to spend their time with travel, recreation, hobbies, socializing and working at part-time businesses.

Sarah and Jack: Married with Children Sarah and Jack live in a suburb of Phoenix and have two adult children, one of whom is in her senior year of college. Both Sarah and Jack have been running their own businesses or have been self-employed throughout their marriage; Sarah is currently a realtor and Jack has a contracting business. They assume that they will have a pretty long life expectancy, even though they have some risk due to genetic diseases. They have assumed a longer life expectancy in their planning for retirement, but still worry that they may outlive their retirement savings. They plan on providing some financial support to their children for another five years. With regard to spending, Sarah and Jack believe that their medical expenses are likely to increase from now until age 65 and throughout their retirement years, but health insurance will increase from now until

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retirement and decrease after that, due to Medicare coverage. They anticipate that their income taxes will stay the same until retirement age, but decrease after that. Gifts and charitable contributions will stay at the same level now through their retirement years, and automobile expenses will decrease. From now until retirement age, their primary source of income will be income from their businesses, and after age 65, income from their investments and part-time work will be the primary income source. Sarah and Jack plan to work full-time in their businesses for at least ten more years. They also are likely to move to a different geographic area that has a lower cost of living when they reach retirement age. Sarah and Jack are also planning to downsize to a smaller house now due to the ‘empty nest’ situation with their youngest child graduating from college; Sarah recently put their house on the market. Once they move to a smaller house in the near future, they are not likely to downsize again past retirement age. When they reach their retirement age, they plan to work part-time, travel and spend more time with their hobbies.


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Appendix

A

Longevity Plan Example

This appendix provides a hypothetical quantitative example that shows you how to apply the planning and decision-making steps outlined in Chapters 4 through 7. This will help you summarize Longevity Cost and income sources so that you can do some basic adjustments and analysis. To do your own plan, you can use Quicken® to record and tally your annual cost of living in order to calculate Longevity Cost—as outlined in Chapter 4. To do the adjustments described here, you can use a simple spreadsheet program or calculate the adjustments manually.

John and Jane Doe John and Jane are married and have one adult daughter who now lives on her own. They live in the Rockies in a suburban single-family home and have a 30-year fixed-rate mortgage with 10 years left on the loan. They are both employed full-time, have 401(k) plans, and Jane has a defined benefit pension that she can begin to withdraw at age 65. John and Jane are both 55 years old at this time. They haven’t done any formal retirement planning, but want to be prepared for their extra decades. Neither John nor Jane has any medical risk factors


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and both are reasonably healthy, so they are assuming they will reach their average life expectancies of 82 and 85, respectively. They want a comfortable retirement with enough money to cover necessary medical expenses, travel, and they hope to leave their daughter an inheritance. John and Jane Doe’s Annual Cost of Living Category Automotive Banking fees Capital improvements Charitable contributions Cleaning services Clothing Educational fund

6,000 300 0 2,000 800 4,000 0

Entertainment/Dining out

1,000

Food, groceries

6,000

Gifts

2,000

Grooming and personal care

1,000

Home improvement

2,500

Household goods

600

Insurance

9,500

IRA/401(k) contribution

8,000

Landscaping, gardening Loans (other than mortgage)

900 0

Medical

10,000

Mortgage

24,000

Non-deductible contributions Recreation Rent

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Annual Cost ($)

0 400 0

Taxes

25,000

Travel

4,000

Utilities

3,000

TOTAL

$111,000

Appendix A: Longevity Plan Example

Longevity Cost John’s life expectancy is 82, so subtracting his current age of 55, the result is 27 remaining years. Jane has 30 remaining years, which is higher, so as a couple they should use 30 as the factor. Their Longevity Cost is: 30 x $110,000 = $3,330,000 John and Jane Doe’s Sources of Income Source Income from working 11 more years (John: $65K/year, Jane: $70K/year)

Amount 1,485,000

Social Security benefits from age 66 to 82 for John and to age 85 for Jane

864,000

Jane’s pension ($600/month) from age 65 to age 85

144,000

401(k) plan balances (as of today) TOTAL

450,000 $2,943,000

Result: Income $2,943,000 – Longevity Cost $3,330,000 = -$387,000 (a shortfall)

Adjustments John and Jane’s Longevity Cost is greater than their estimated sources of income, so they need to revisit their expenses to see what might change between now and life expectancy, and what lifestyle changes they need to make. When Longevity Cost is calculated, it assumes the same level of spending every year. However, spending amounts will likely change at some point between now and life expectancy, mainly because most people will stop working full-time. This reduces several spending categories: income taxes, contributions to 401(k) plans, insurance, and commuting expenses. Therefore, it’s important to make


87

some of these adjustments. This section is a summary of the adjustments John and Jane decided to make, and the net effect the adjustments will have on John and Jane’s Longevity Cost. The big three adjustments are medical expenses, taxes, and insurance: Medical. Their medical expenses likely will go up, so they will make an adjustment of 150% for the last 15 years of their life expectancy. This is more than the 6.8% increase, but they felt that $15,000 per year would put them closer to the national average. Net effect: +$5000 for 15 years Taxes. After a discussion with their tax accountant, they know that their retirement income combined with Social Security will exceed the $32,000 per year maximum, so they will be paying income tax, but it will be much lower than what they are paying now. They estimate their taxes from age 66 to Jane’s life expectancy of 85 will be $4,000 per year. Net effect: -$17,000 for 19 years Insurance. Their health insurance premiums will likely stay the same as they are now. They both have employer-provided health insurance for which they pay part of the premiums, and that amount will be equivalent to what they would pay for Medicare Part B, plus a Medigap policy after they are 65. However, they have decided to purchase long-term-care insurance policies now, which will add another $1,200 per year. Net effect: +$1200 Other adjustments John and Jane made are as follows: Automotive. After 66, they will get rid of one of their cars, and will not be commuting to work, which will reduce their annual expense. Net effect: -$3000 for 19 years

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IRAs/401(k)s. They will only be making contributions until age 66, when they stop working; thereafter, they will be withdrawing their funds. Net effect: -$8000 for 19 years Mortgage. They plan to pay off their mortgage in 10 years, but stay in their current home. Net effect: -$24,000 for 20 years Travel. They would like to travel more when they retire, so they want to include that in their budgeting. Net effect: +$4000 for 19 years The result of these adjustments is shown on the following page.


89

Net Effect of Adjustments on Longevity Cost Category

Annual

Total (x 30)

Adjustments

6,000

180,000

-57,000

300

9,000

0

0

2,000

60,000

800

24,000

4,000

120,000

0

0

Entertainment/Dining out

1,000

30,000

Food, groceries

6,000

180,000

Gifts

2,000

60,000

Grooming and personal care

1,000

30,000

Home improvement

2,500

75,000

600

18,000

Insurance

9,500

285,000

+36,000

IRA/401(k) contribution

8,000

240,000

-152,000

900

27,000

0

0

Medical

10,000

300,000

+75,000

Mortgage

24,000

720,000

-480,000

0

0

400

12,000

0

0

Taxes

25,000

750,000

-323,000

Travel

4,000

120,000

+76,000

Utilities

3,000

90,000

TOTAL

111,000

3,330,000

Automotive Banking fees Capital improvements Charitable contributions Cleaning services Clothing Educational fund

Household goods

Landscaping, gardening Loans (other than mortgage)

Non-deductible contributions Recreation Rent

Adjusted Longevity Cost

90

-825,000

$2,505,000


John and Jane’s situation after these adjustments is as follows: Income $2,943,000 - Longevity Cost $2,505,000 = $438,000 (a surplus) John and Jane’s adjustments resulted in a more realistic situation in terms of their planned costs and income, as well as lifestyle. They will have enough money for necessities and travel, and have some money leftover for their heir.

Adjusting the Income Sources If you have a shortfall and you’re trying to find more money, the best approach is to find ways to reduce your Longevity Cost. That is clearly the case for John and Jane Doe. However, they also could have considered the income side of the equation, such as working for a few more years longer than planned (net effect of +$135,000 per year, less associated expenses). They could also save more money through more 401(k) contributions while they are still working if their plan allows, or open a simple savings account.

If You Have a Surplus Not everyone will have a shortfall when they go through the first round of this analysis; they may not need to do a lot of adjustments. However, it’s probably a good idea to adjust a few of the expense categories anyway, such as those related to working (taxes, 401(k) contributions, insurance, and commuting). The resulting adjusted Longevity Cost will give you a much more accurate picture of your surplus, which may make a difference in how you plan your spending for charitable contributions, recreation and travel, or leaving a legacy.


91

Appendix

B

References

There were many references to source material in the footnotes contained in this book. Many of these sources are large, content-rich documents or websites that might be of interest if you wish to explore these topics in more depth. Links to these sources can also be found at the Happy About website. Here is the link that will direct you to these sources: http://tinyurl.com/37ygpl


93

A u t h o r

About the Author

Catherine Kitcho has been a Baby Boomer all her life and has been fascinated by the social, political, and cultural impacts that this generation has had upon America. Catherine is currently a marketing consultant known as The Launch Doctor (http://www.launchdoctor.com). She is the author of three business books, a cookbook, and a humorous novel, as well as articles, humor, and short stories that reside on her writing website, http://www.pelepubs.com. She and her husband live in Laguna Niguel, California.


95

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Books

Happy About Being a Baby Boomer: Facing Our Newfound Longevity

The Baby Boomer Encyclopedia

About a Baby

Baby, Our Baby!

Baby, Our Baby!

Boomer

Longevity

Boomer

101 Ways To Raise a Happy Baby

That's Our Baby!

Longevity

Being Reasonable About Religion

About the Baby

Talking About My Baby

talking about my baby

About the Baby

The Truth About Being a Leader

The Doctor's Newfound Family

Longevity Policy: Facing Up to Longevity Issues Affecting Social Security, Pensions, and Older Workers

Our New Baby (First Steps)

Facing the Hard Truths about Energy

Being Married: Your Guide to a Happy Modern Marriage

Let’s Talk About Love, Baby!

A Happy Solution

Happy Accidents- A Memoir

A Happy Meeting

A Happy Death

a happy meeting

A Happy Effin Valentine

Environmental Geology: Facing the Challenges of Our Changing Earth

Facing the Future: Agents and Choices in Our Indeterminist World

Happy About Being a Baby Boomer: Facing Our Newfound Longevity

The Baby Boomer Encyclopedia

About a Baby

Baby, Our Baby!

Baby, Our Baby!

Boomer

Longevity

Boomer

101 Ways To Raise a Happy Baby

That's Our Baby!

Longevity

Being Reasonable About Religion

About the Baby

Talking About My Baby

talking about my baby

About the Baby

The Truth About Being a Leader

The Doctor's Newfound Family

Longevity Policy: Facing Up to Longevity Issues Affecting Social Security, Pensions, and Older Workers

Our New Baby (First Steps)

Facing the Hard Truths about Energy

Being Married: Your Guide to a Happy Modern Marriage

Let’s Talk About Love, Baby!

A Happy Solution

Happy Accidents- A Memoir

A Happy Meeting

A Happy Death

a happy meeting

A Happy Effin Valentine

Environmental Geology: Facing the Challenges of Our Changing Earth

Facing the Future: Agents and Choices in Our Indeterminist World

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