Ideas on what to do when retired

 Source:

It appears that many of us have not figured what it would be like in retirement. For all the emphasis put on saving for retirement, planning for what to do in retirement is often lacking. 

While that may not pose an immediate problem – new data from the MetLife Mature Market Institute show 70 percent of 65-year-old retirees thoroughly enjoy retirement – it's not clear that enjoyment endures. That's why many experts suggest embracing some second act during this period that can last 30 years or more.

There's the honeymoon period for the first six months. Then restlessness sets in, and you wonder what to do with the rest of your life," says Todd Tresidder, founder of FinancialMentor.com  in Reno, Nev. "That's where [today's] whole new retirement comes in."

The transition tends to be more difficult for men. While 77 percent of men (72 percent of women) have planned financially for retirement, more women have "thought about what they'd like to do in retirement," says a survey released in January by Ameriprise Financial. For example, 41 percent say they plan to spend more time with family (34 percent of men); 21 percent place importance on their proximity to friends (13 percent of men); 25 percent say they've spent time determining how they will rest and relax in retirement (19 percent of men).

"Women tend to have many friends, while men tend to have relatively few friends," says Donald Strauss, co­director at RetireRight Center, a ­Chicago-based retirement planning firm and coauthor of "Customize ... Don't Minimize ... Your Retirement." Since men have been focused on work through much of their adult lives, they've built structures and an identity around it. Retirement "leaves them with a vacuum to be filled."

What to do? Sure, take a breather after a busy career. But then reengage in something. Here are some options:

Turn your passion into a new career. Instead of "retiring," reinvent yourself, says Mark Walton, author of "Boundless Potential." Do something that "lets you be as successful as you were earlier in life." It doesn't matter if that role creates income, he adds. The shift can be dramatic, such as moving from something technical to an artistic endeavor.

To get started, determine what absorbs your attention; explore how to convert it into real work, then envision a working structure to make that happen in the marketplace. For many, "it will involve inventing and marketing something themselves – being an entrepreneur," says Mr. Walton, chairman and founder of the Center for Leadership Communication in Chapel Hill, N.C.

Consider a "bridge" job. Experts say these positions – consulting or any kind of part-time, part-year, or project work – ease the transition and can provide income as well as human interaction. But the work "shouldn't stress them out or keep them from seeing the grandchildren. It shouldn't have the same feeling as their past job," says Caitrin Lynch, an anthropology professor at Olin College of Engineering in Needham, Mass., and author of "Retirement on the Line." While some prefer continuing their past career in some fashion, others want to experiment. Preretirement planning – involving retirement coaches, seminars, or other guidance – can help a person decide what, and how much, work he or she wants to do, she adds.

Volunteer. You can contribute time and energy to some form of social good. While many people find possibilities through their church, synagogue, or mosque, many other avenues exist, says Marci Alboher, vice president at Civic Ventures, a San Francisco think tank focused on boomers, work, and social purpose. There are many volunteering possibilities, including AARP's Create the Good program (createthegood.org), and volunteer networking sites such as VolunteerMatch.org and Idealist.org.

A key tip: Once you identify the kind of volunteering you'd like to do, network to determine which organizations will offer a meaningful experience. "Make sure your work will be high-impact," Ms. Alboher advises, "because people are reluctant simply to lick envelopes."

Musings on why people don't plan for retirement

The following three days of posts are from Lessons from Behavioral Finance for Retirement Plan Design by Olivia Mitchell and Stephen Utkus


There is a movement worldwide to the idea of the individual become more responsible for his/her own retirement funding/planning. This is being done by moving away from the traditional pension plan that defines a benefit for an employee when the employee’s retires. (This is called a defined benefit [DB] plan) toward a participant-directed defined contribution (DC) plan. 


These plans are rapidly becoming the cornerstone of the private sector retirement system around the world.

Participant-managed DC plans are the main feature of national pension reforms already implemented in many Latin American nations, as well as in Germany, Sweden, Russia, Australia and most recently, Canada

Underlying this movement is an implicit assumption about behavior. The assumption is that the individual is well-informed and understands economic theory and who also acts rationally to maximize her/his self-interest. To this end, it is assumed that he/she can interpret and weigh information presented regarding options offered by employers and governments, appropriately evaluate and balance these choices, and then make an informed decision based on weighing the alternatives

There are a number of problems with this assumption.

1.  There are certain types of decisions and problems that may be simply too complex for individuals to master on their own.

2.  Individuals may have the right intentions or beliefs, but they may lack the willpower to carry out the appropriate changes in behavior

3.  Many people do seek to maximize their personal welfare, yet they prove far more cooperative and altruistic than traditional economic theory predicts they will be.

Neoclassical economic theory states that people will examine the trade-off between current and future consumption. People who hold this theory believe people are able to compare the benefit gained from consuming their income today, with the benefits of deferring some of that income to the future. Those who believe in this theory think this is what drives contributions to individual retirement plans, with the goal of the individual being to save for retirement.

There is another theory of savings (the life-cycle theory), which states that individuals are rational planners of their consumption and saving needs over their lifetimes, taking into account the interests of their heirs. Therefore, during their younger years, workers tend to be net dissavers, borrowing now to boost their current consumption; middle-aged individuals become net savers and purchasers of financial assets and enter “accumulation” phase, during which they stockpile assets for the final, retired phase of life. On balance, the life-cycle theory is thought by business, government and economists to do a reasonable job of explaining patterns of household saving and spending behavior.

If middle age (defined by the US Census as between 35 to 54) is when individuals begin to plan for retirement at 65 what happens when we move the retirement age to 67? How long before they implement a change should the government give its people. Our government is talking about the changes affecting those who are just turning 58. Maybe they should move the timelines back so those who are just turning 35 have time to prepare properly.

The problem is that being good at retirement savings requires accurate estimates of uncertain future processes including lifetime earnings, asset returns, tax rates, family and health status, and longevity. In order to solve this problem, the human brain as a calculating machine would need to have the capacity to solve much decades-long time value of money problems, with massive uncertainties as to stochastic cash flows and their timing.

In fact, survey and empirical research suggests that individuals are not particularly good at retirement savings. Furthermore, the empirical evidence suggests that failing to save enough also has serious negative consequences

The brain is a Buddhist

Judith Horstman is writer  author of “The Scientific American Book of Love, Sex and the Brain,”   talks about change  and talks about love and sex  and she has hope for the Boomers.


Some of the things Horstman has learned have surprised her.  “The brain takes up 2 percent of the body, but uses 20 percent of the body’s energy,” she said. “Everything happens in the brain. Your body is a conduit, and the body and mind connect.”


Yes, it is true that the brain is the most important sexual organ.


“It all happens in the brain,” Horstman said. “Our bodies feel the sensations.”


And it’s changing all the time. “That’s why you can form habits and break them. That’s the good news and the bad news.


“I think the brain is Buddhist,” she said. “Buddhism says everything is change, and boy, your brain sure changes.”Horstman’s latest book, “The Scientific American Healthy Aging Brain,” will come out at the end of May.


“It has a lot of good news about how a normal brain ages, but also talks about some things that can go wrong and gives a great deal of the latest research about what we can do to preserve the brain as we age,” she said.


People in their 90s still have a keen interest in sex and have a desire for sex,” Horstman said. “How much of that they’re doing, we don’t know because it’s self-reported, but people are still interested.


“The capacity for love remains throughout your life. It may be people who have been disappointed in love give up in that arena, but they tend to have great love with their animal companions or a strong love of God. We’re born to love — oh, yes, absolutely.”

Resource for boomers

Checks out the folks at The Retirement Education Centre. The following is from their website and if you are close to retiring or just started your retirement they might be able to help.

[We are] an education, advocacy and research organization dedicated to helping you transition to the  “New” Retirement. Our mandate is to provide you, your employees and union members with the tools they need to help make the transition to the next stage of their lives. Through our workshops, the online program, modeling software, and other support material, we work with your employees to develop a clear vision of their future.