The Mountain Times

°F Thu, April 17, 2014

Central Vermont's Most Popular Weekly Newspaper

Retiring in a Down Economy

We work for 20, 30, even 40 years or more. All the while, there are thoughts about the future. There will come a day when the work stops and we step out from the shadows of timeclocks and deadlines, into the bright sunshine of retirement.

OK, maybe it isn't always on our minds. But the longer we work, the harder the job, the more likely it is. Even if we love our jobs and never want to stop, other factors can move us along towards what used to be represented by a gold watch.

If we have done things right, all our ducks are in a row. We picked the age; we saved and planned and arrived at the launching pad to the rest of our lives, on schedule and ready for the journey ahead.

But for those of us born in the '40s or early 50's, the timing might be proving a bit awkward. Home values are down (even in Vermont) and most of our 401k's have seen some pretty rough seas in the last few years. So, timing . . . well, timing, as they say, is everything.

Obviously, the first choice is to keep working if possible. Delaying retirement from 62 to 65 can make a significant difference in Social Security earnings for the rest of our lives and for our surviving spouse, if we have one. Waiting to 65 has the added benefit of qualifying for Medicare.  The savings in health insurance for those three years may be considerable. And if we had planned for 65/66, could we make it to 70?

Perhaps a longer transition to retirement? Going first to part-time and retiring completely in a few years can stretch things out a bit. Staying put rather than moving out of the area is another option that may help. Familiarity and established connections may provide better choices than we would find as strangers in another locale.

There may also be alternate sources of cash flow available, such as reverse mortgages or borrowing against life insurance policies. Alternative or transitional funds may help to bridge the cash flow gap to higher Social Security eligibility.

It's important to involve a financial professional who is proficient at advising clients during retirement. The accumulation phase of financial life, setting money aside and letting time and good advice increase the savings, is vastly different than the distribution phase, where spending down the savings is the point of it all. Experience with navigating taxes, the timing of dispersals, and other challenges is vital. After all, it isn't just what we earned that matters, it's what we get to keep (and use).

Finally, there is "the brass ring". The unknowns are many. Make sure, in spite of all the worries and concerns of our times, to reach out and grab a few of the shinny things life offers.

Retirement is a journey. We don't know how long it will be or where it will take us. But one thing is certain: we aren't coming back alive. We must enjoy as much as we can, while we can.

After all, Aging in Place doesn't happen by accident.

Scott Funk is Vermont's leading Aging in Place advocate, writing and speaking around the state on issues of concern to retirees and their families.  He works as a Home Equity Conversion Mortgage specialist. You can access previous Aging in Place articles at vermontfunk.com.

Tagged: Aging in Place, Retiring