Gone are the days when growing old meant looking forward to quiet time on the porch watching life pass by. Today's older generation is leading more active lives. People live longer, families grow and prices go up. Life goes on, and more and more baby boomers are marching along.
Finances are a major concern for most people nearing retirement. If they quit their job, then can they pay their bills? Will they be burdens to their offspring? Retirement age, the point when a senior can begin collecting Social Security, seems to get pushed further away each year. Everyone who has completed 40 credits (quarters of salary) is eligible to collect reduced Social Security retirement benefits starting at age 62; however, full retirement benefits vary according to date of birth and are based on cumulative salary earned. An adult born between 1943 and 1954 reaches full retirement age at 66. If a 62-year-old began collecting, the amount would be reduced by 25 percent. Someone born 1960 or later would have to reach age 67 before collecting full benefits. Delaying benefits until after full retirement age, up to age 70, may increase the monthly benefit.
"Some people are not prepared financially or mentally to retire," says Michael Bivona, a retired CPA and author. He suggests part-time jobs to give a boost to the bank account and to help remain active. "I don't think many people realize that they may live 30 to 40 years after leaving the workforce," Bivona says. A few of the jobs he recommends for the semiretired include working in a library or as a bookkeeper, working on a cruise ship, being a virtual assistant to business executives lacking in-house staff, becoming a crafts instructor or teaching adult education.
A longer life means more medical care for both normal aging and unexpected illnesses. Medicare, an insurance program for people 65 and older, has four parts: Part A is hospital insurance; Part B is medical insurance; Part C is Medicare Advantage; and Part D is prescription drug coverage. Even if an individual remains gainfully employed and is not collecting Social Security benefits, it is recommended that an application be put in for Medicare no later than three months prior to turning 65 or a penalty might be imposed on certain costs. Seniors approaching retirement also need to understand what Medicare will cover and the costs of available supplemental plans. An unexpected illness can quickly deplete a nest egg. Good sources of information and guidance include the Centers for Medicare and Medicaid Services, AARP and State Health Insurance Assistance Programs.
Living arrangements for seniors can make a huge difference in affordability and independence. As adults reach retirement age, they need to consider their cost of living against their guaranteed income, the cost of home modifications, maintenance and transportation around the surrounding community. Many older couples look to downsize in the hopes that a smaller home will cost less in upkeep.
Before selling one home and purchasing another, it is a good idea to physically spend time in or near possible locations. Look for places that will accommodate desired lifestyles such as golfing, boating, hiking, etc.; shopping convenience for groceries, clothing, pharmacies and other goods; medical facilities, doctors and hospitals; veterinary care for pets; religious institutions, civic clubs and other social activities; and alternate transportation in case driving is no longer an option. While a smaller home may require less maintenance, size does not necessarily mean more affordable -- local taxes, utility bills, home and auto insurance costs vary depending on the region.
Change can be hard, especially on older people set in their ways, so the earlier a move can be made, the easier the adjustment.