Originally posted at USA Today , by Russ Wiles.
If you want to be happy in retirement, remain socially engaged, look for new challenges and — most of all — stay curious.
“Curiosity is the fountain of youth,” said Mitch Anthony, a trainer and consultant at Advisor Insights in Rochester, Minn. “It’s about still wanting to learn and still wanting to grow.”
Speaking at a fee-only financial planners meeting in Phoenix this month, Anthony seized the opportunity to encourage financial planners to become better retirement coaches for clients — and not just with finances in mind. A lot of people just aren’t enjoying their retirement, he said, describing the retire-at-65 mindset as an “artificial, culturally imposed finish line” that makes less sense today as longevity increases and more Americans work and remain active. Boredom, he said, is the bane of retirement.
“If you wake up on day 43 of retirement and realize you have no reason to get out of bed, you’re in trouble,” he said.
On the Japanese island of Okinawa, a place where seniors tend to age well and longevity is high, there’s no word for retirement, Anthony said. “It’s not all about fish oil and tea,” he said. “There are other factors at play (including) a reason for waking, a purpose.”
Aside from staying happy in retirement, the Phoenix meeting organized the National Association of Personal Financial Advisors covered a full agenda of retirement, insurance and other topics. Here are a couple other issues with a consumer flavor discussed:
- A tip that bears repeating. Many Americans start collecting Social Security retirement benefits as early as possible, at age 62. Roughly three in four people start by age 66, and hardly anyone waits until 70. Jim Pavletich, a retired public affairs specialist with the Social Security Administration, wishes they’d cut it out. Hold off on taking benefits at least until full retirement age (66 to 67 for most people currently in the workforce) and preferably to age 70, he said, if you can make it that long.
For recipients who postpone, benefits keep increasing in value — at an annual rate of 8% once you hit full retirement age. That means a monthly benefit of $1,500 at 62 would swell to more than $2,600 if waited till age 70, said Pavletich, who called delaying “the A Number-1 maximizing strategy for everyone.”
There are some drawbacks to delaying, of course. If you get run over by a bus a month before applying for benefits, you would be out of luck (though your spouse would receive higher payments). Also, people who take the money early can invest the proceeds, though probably not at such a high rate of return.
“Where else can you go to get 8% (a year) on your money and have (the increase) guaranteed by the government?” Pavletich asked.
- An overlooked product. The population is aging, and many Americans will need nursing home or other assistance in old age — yet few people buy long-term care insurance. Yet only about 5% of assisted living and nursing home costs are paid by insurance, said Robert Fleming, an elder-law attorney at Fleming & Curti in Tucson.
“Long-term care insurance has failed to get a toe-hold,” he said.
Many people rely on Medicaid for help, but eligibility for the program is restricted to those with low income and minimal net worth. Eligibility limits vary, but qualifying seniors should plan on earning less than around $2,200 a month and having less than $2,000 in net worth, excluding a home, auto and a few other personal assets, Fleming said.
Meanwhile, the costs of care, which can easily run into six figures annually, continue to rise. Insurer Genworth conducts an annual study on nursing home and assisted-living expenses around the nation. The research can be viewed at genworth.com. Roughly 70% of people 65 and up will need help at some point, the company said.
Several factors have curtailed the market for LTC insurance, Fleming said. These include misunderstandings about how Medicaid works and confusion about LTC policies. Also, insurance premiums have risen in recent years, making coverage less affordable.
Seniors with little income and net worth probably will need to rely on Medicaid, while wealthier people likely can afford to pay their own way. That makes LTC insurance most appropriate for middle-income households. “My rule of thumb is that if you have $1.5 million (or more) of net worth and own your house, you can think about self-insurance,” Fleming said. If not, you might be a candidate for a LTC policy.