May 24, 2016

How Do Relationships Change During Retirement?

This is one of the questions that blog readers ask most often. After finances, what to do all day, and where to live, what retirement does to relationships is top of mind for most of us. We realize there will be changes in how we interact with others. But, will they be for the better or aggravate problems that already exist? Thinking about this issue before you retire can make a tremendous difference in how smoothly things go.

There are four major categories of relationships that are likely to be affected:

1. Primary relationship: Your marriage or committed partnership will probably undergo the most significant adjustment and become a real study in balance. Each of you wants to spend time together and each of you requires time apart. Just because a job has ended doesn't mean everything else that makes up a typical day is going to change. We each have certain routines and habits that bring us comfort and happiness.

Short and long-term goal setting is vital in a retirement relationship. Everything from financial adjustments to vacation choices, when to see the grandkids and whether we should get a new dog require a decision. Both partners need to feel his or her opinion is being considered. Communication, always vital in a marriage, becomes even more important when two people are sharing the same space 24 hours a day.

2. Adult children: The toughest suggestion is to accept the differences between you and your grown kids. Your adult child is not you. As he or she grows, life experiences will result in changes that you may not fully approve of. At this stage of the game it isn't your job to approve. It's your responsibility to accept them.

Respond to questions or pleas for help like you would any other adult, not your child. Do you talk with your adult child like you would a co-worker, or a friend? Or, do you talk at him? Unsolicited advice-giving or lecturing won't work on another adult. Why would you think it would work on your grown-up child?

3. Grandkids: If you are lucky enough to have grand children and get to see them often enough to have a relationship, you will experience one of the greatest benefits of retirement: being part of their lives in a way that can change them and you in so many positive ways. To see your children have children is an amazing experience. To be able to participate in their lives is a joy that never ends. Frankly, to be able to say goodbye at the end of the day and leave the messy parts of child-rearing to others is also very nice!

Few things can sour a good relationship with your grown child, his or her spouse, and grandkids quicker than inserting yourself into how the children are being raised. Saying something meant to correct a behavior you think is wrong rarely is a smart decision. Talking privately with your child with a suggestion that he or she is making a mistake in child-rearing will not go much better. "That's not how we raised you" are six words that never produce a positive outcome.

Of course, if there is some form of child abuse in evidence you must take steps to bring it to a halt. But, usually, the problem is simply one of differences: your child has chosen to raise his or her child without copying your parenting playbook. Accept it

4. Work friends: The reality is simple: after a time, you will lose touch with most of the friends you had while working. As a retired person you will move in different circles than they will. Your use of time and schedule will reflect your needs and interests. Moving after retirement is a common (though sometimes risky) occurrence. Without shared experiences at work, you will have much less to talk about. The water cooler gossip will no longer seem important in your new world.

The loss of a circle of friends with whom you shared your life with every day is tough. It is very rare that work friends will still be an important part of your life within a year of the date you leave work. As we age, we often find it harder to make new friends, but the effort must be made. I will admit adding new friends remains difficult for me. I find new relationships through church, and volunteering. 

Somewhat surprisingly, what started out as just exchanging comments with some readers of this blog has produced close to a dozen real, in-person relationships where we travel with each other, or visit them when Betty and I take an RV trip. 

Honestly, supportive relationships will make more positive differences in producing a satisfying retirement than your financial or even physical well being. They are the building blocks to a happy future.

May 20, 2016

Health Care Costs: Is Next Year Going To Be Bad?

credit: Huffington
I guess we should be thankful we won't be surprised: the warnings about a major increase in health care insurance costs are hard to avoid. Several leading insurers have already announced they will not participate in the Marketplace in any states, or areas that are too rural to provide them with enough income. Some places, like Alaska or Alabama, may have only one company offering to sell insurance through starting in the fall. With no competition, I think we can all guess what the costs and policy limitations will look like.

In those states that will offer the customer several choices, rate increases as high as 35% are being mentioned. That will be coupled with fewer doctors or specialists in network, a limited choice of hospitals or clinics, and fewer drugs in the lowest tiers of coverage. The Affordable Care Act's flaws are starting to cause serious problems. They are fixable, but at the moment our political climate is more interested in fixing blame.

If you are 65 or older, this drumbeat of bad news doesn't affect you directly. Medicare will have little, if any, premium changes. Rate increases for Medigap, Part D drug coverage, or Medicare Advantage programs are likely to be much more reasonable because of intense competition. 

However, pre-retirees, or younger spouses will find themselves trapped in a system that is rapidly reaching unsustainability.The health care system in the United States is unlike any other developed country. We have a for-profit approach to health care. While that provides for the best medical care possible, it has the very real potential for financial hardships or even ruin if someone isn't prepared or can't find coverage.

Recent studies tell us that at least $250,000 in lifetime costs are very possible for those over 65. Don't we assume that with Medicare, a Medigap policy, or an Advantage option, and drug coverage that can't possibly be right? 

Unfortunately, the most expensive parts of our health costs aren't covered by those items. Moving into an assisted living facility can easily cost $3-$4,000 a month (or more). A nursing home might be closer to $5,000 a month. Medicare pays nothing, or for only a limited period of time.

If you elect to stay in your home you will still need expensive on-site nursing and custodial care that can cost about the same as being in a facility. Research shows 70% of us will need either short and long term care at some point.

Traditional Medicare doesn't pay for hearing aids, dental care, or eyeglasses (except after cataract surgery). It has limits on durable equipment. Except for a few exceptions it does not cover alternative care. Even with Part D coverage, prescription drugs are not going to get cheaper. Medicare is prohibited by law from negotiating lower drug prices. Congress has decided that Big Pharma must be protected, even with profits approaching $100 billion a year.

Lots of folks insist that health insurance is better and cheaper when left to private companies. Having been in the individual health market for over 30 years, I beg to differ. Rates always went up, sometimes by a little, sometimes by a lot, but always up. Coverage went down, drug costs showed massive increases, and deductible got higher. Since I became Medicare-eligible my direct costs have fallen by over 50%.

Of course, with some new drugs costing up to $10,000 a month (!), I still face very high costs if I am unlucky enough to get a serious disease that requires such expensive treatment.

What I will never understand is the protest against single-payer insurance until someone signs up for Medicare. Then, the complaints cease and the praise begins. Medicare is a single-payer system that works well for the consumer. Is there fraud? Sure. Do doctors make less? Yes. Does it need to make itself financially healthy? Of course. But, looking at the private system those under 65 must live (or die) with, I am hard pressed to see how the price gouging, lack of competition, and poor service is better. And, all of that started well before the Affordable Care Act.

Next year is going to bring back-breaking cost increases to millions of our fellow citizens. It is also going to bring us a new president and many new members of Congress. Whether that means any fundamental changes is anyone's guess.

May 17, 2016

Can You Spend Part Of The Year Away From Family?

This is  an intriguing question posed by a new reader. I have addressed something similar in a past post, but from the perspective of the kids who are left behind when parents or grandparents spend part of the year somewhere else. This time let's turn our focus on those who leave for the summer or winter.

The ability to follow the sun, live part of the year in a place you love, or spend extended time visiting family and friends is one of the true blessings of retirement. If the budget, spirit, and obligations permit, there is nothing preventing you from jumping in the RV, a plane, or car and hitting the road. 

Living in Arizona, I am exposed to this concept every year. Folks from colder or rainier places stream into the state from October until April. Then, they head back to the places that are much more pleasant than the desert during our blistering summers. Those of us who live here fulltime do our best to find places to hide for at least part of those super-hot months. Flagstaff is two hours away and 30 degrees cooler. San Diego beckons with its moderate temperatures and foggy coastline. Portland or Seattle are a 4 hour flight north (or 7 day RV trip!).

If someone has family scattered across the country, being a seasonal traveller can solve two problems: allowing you to satisfy your wanderlust and renew family ties. With no offspring or a family setup that doesn't invite much contact, living part of the year in another location is simply a question of affordability and desire. 

But, what about the situations where some or all of your close family and good friends live where you call home? How do you feel when you move away for part of the year? How do you maintain contact with loved ones when you are away? 

One common response is that the the reason for an empty nest is to feel free to get up and go when the urge is there. E-mail, video services like Skype, text messaging, even a private Facebook page or blog meant just for family members can keep everyone up to date. In the case of an emergency or major family event, driving or flying home are options. 

Another reaction might be that your kids have their own family, and the grandkid are of the age (think teenage) when contact with the grandparents is less frequent anyway. Being gone for a season would not as big an obstacle as it was when they were younger.  

Some folks have told me that the chance to travel and live in places that make them happy, while still healthy enough, is a key factor in deciding to be away from family. Missing loved ones is not easy, but giving up lifestyle dreams would be harder.

I know a few couples who love the fact they now have two places that feel like home. Friends, belongings, and activities exist in both their summer and winter locations that make them feel settled and comfortable. They have built important relationships in both locations.

Betty and I have had to find our personal limits and what mix of family closeness and road trips work for us. For a few years we had given serious thought to spending several months of our summers in Portland, Oregon. We love the area and have some great friends we enjoy tremendously. We would escape the heat that has been our companion for over 30 years in Arizona.

Being honest with ourselves, though, we realized that being gone all summer in Oregon would not work. Neither of us wants to be away from other family members that long.  We love our new home and being close to those we care about. 

We do like RV travel. Some of our trips are just a few days or a week, but some of them have lasted for almost two months. Much like the Oregon decision, we have determined that two months away from family and our home is our limit. 

Even with all the ways to stay in touch, our thoughts begin to turn toward home somewhere around the 6 week mark. Like a horse heading for the barn, the RV starts to point that way.

The reader who submitted the question, and I too, am interested in your thoughts. Living for part of the year somewhere other than your primary home - is it difficult, create problems, or have you adjusted to the separation well?

May 14, 2016

Last Minute Travel Deals: Where To Go?

One of the benefits of retirement is the ability to travel on our schedule. No longer must we wait for our annual two week break from work. Sure, we can take trips during the summer, but then so does everyone else, making for crowded roads, airports, and destinations. 

If the budget and interest exists, travel to somewhere that is not home can happen whenever we'd like it to. That might involve a spur of the moment decision, or a definite plan that covers a good part of the upcoming year.

That raises the question: where to go to find great deals and ideas to stimulate and satisfy your wanderlust? A reader asked me for suggestions, especially for last-minute sales. I haven't used all the sources listed but they appear to be legitimate as I researched choices online. Most have a section for last minute deals and specials:

Booking Buddy



Trip Advisor


Travel Zoo

Groupon Getaways

Cheap Tickets Deals of the Week

AAA last minute travel  (Type to be directed to the office that serves your state or city)


Costco Travel (members only)

Vacation Rentals

Home Exchange


Last Minute Travel



Which ones have I overlooked? Do you have any suggestions for last minute or deeply discounted travel deals? Are there any services you'd recommend someone not use based on personal experience? 

Postscript: All this talk of travel reminds me that Betty and I are beginning to make plans to take an RV trip in late summer-early fall to visit family in Kansas and Tennessee. We will also explore the Smoky Mountains and travel through eight states that we have yet to visit in our motorhome travels.

Seven weeks, about 4,000 miles, and more photos and memories than we can count await us. Sounds like a blast!

If that weren't enough we leave for an Alaskan Cruise in a few weeks - our way to celebrate our 40th anniversary!

Lastly, the folks at NeoMam Studios sent me an infographic on packing tips. Seems a fitting addition to a post on travel sites: NeoMam packing tips graphic.

May 10, 2016

Satisfying Retirement Planning: Three Keys To "Success?"


There are a few pieces of "common knowledge" about retirement I'd like to modify. They may holding you back from deciding to retire. Or, maybe, they are forcing you to live in a way that isn't really satisfying. Certainly, they are preventing you from believing retirement can be joyful with your resouces.

There are three of this nuggets of wisdom that are not hard and fast truths:

1) You need 75-80% of your preretirement income to live a satisfying lifestyle. Amazingly, even though this has been disproved and discounted for years, you will still find this gem quoted quite regularly. It is very possible to spend 80% of the income you once enjoyed as an employed person. Lots of people do. 

Some folks spend even more than they once earned, at least in the first few years of retirement. They want to maximize their healthy years. So they "front-load" their expenses with extra travel and discretionary spending, with plans to cut back when the mind, body, or spirit starts to run low on energy. While this isn't the post to discuss that strategy, I can tell you that it is a legitimate approach to retirement planning, if you have the resources to support such a choice and the discipline to cut back after a period of time.

Importantly, you absolutely don't need to plan on spending 80% of your working days' income after you retire. I have been retired for 15 years and am spending approximately 40% of what I once brought home each year. Readers of this blog report spending from as low as 25% to a high of 60-75%.

Once you retire, what you spend your money on usually changes dramatically. Commuting expenses vanish. Clothing tends to change from maintaining a wardrobe for work to jeans and a T-shirt, or other casual choices. Trips to the dry cleaners become infrequent. Many retirees find themselves with no mortgage, or downsized living space with lower taxes and insurance costs. Paying for your kids' education is usually finished. Since you have the time to prepare more meals at home, restaurant bills can drop dramatically.

2) You need at least one million dollars in savings to not outlive your money. What you need is enough to cover your current and projected expenses. For many of us, that does not add up to a seven figure investment account. While a million dollars may be what you eventually spend, you do not need to amass that total on your own. 

Over the course of what I hope to be another 20 or 25 years on this planet, Social Security will have paid me several hundreds of thousands of dollars. The equity I have in my home will bring more when I sell it. The money I do have in IRA and investment accounts will grow each year, maybe by not as much as I'd like, but enough to keep me ahead of inflation.

As point #1 notes above, my living expenses are dramatically lower than they once were, even as the quality of my life has improved. Health costs will begin to consume more of my budget each year. But, Medicare, medigap and drug coverage means virtually anything that happens to me will not put me seriously upside down.

3) You can withdraw 4% of your savings each year and it will outlast you. For the last several years, and for the foreseeable future, this is no longer an automatic guideline. With interest rates mired as low as they are, withdrawing 4% from your investment pot of money runs the risk of a shortfall. 

Even though points #1 and #2 are true, a retiree still must manage his or her investments prudently. While doable for the first few years of retirement when travel and lifestyle expenses may be higher, a drawdown of 4% over an extended time frame could leave you in a bind.

This is a when you adjust your lifestyle and expenses to allow you to sleep at well at night. If you can safely take out 3%, then build your budget around that number (along with Social Security and other income). If it is 2%, then make it work or add part time income to the mix.

In my case, I withdraw about 3% each year and find that is entirely sufficient for a very satisfying retirement lifestyle of family, home life, and travel. Can I afford a new car every three years? No, but I don't want a new car that often. Can I fly off to Maui on a whim? No. But, with careful planning I can still make a trip to paradise every few years. Frankly, I have happily adjusted to an income level that I would not dramatically increase even if I could. 

I have chosen experiences over things, less worry instead of stress, and building a life around what I need and what I can afford to want: those are my three keys to success.

What are yours?