Make Your Retirement a Healthy One

Guest Post by Joseph Byrne, Founder and CEO of EmpoweredAge.com, a service that connects highly-skilled retirees to part-time or short-term consulting projects in various industries. Below, Mr. Byrne offers his insight into working after retirement and the gap he aims to fill.

Our idea of retirement has changed with each passing generation. Many people count down the days until they can relax with no time-constraints, play golf, visit family and friends, and take the trip they have put off for years. Others find their true passion in their work, committed to continue working as long as their health allows. Still others look forward to volunteering, taking on a second-career, or pursuing a passion project that has eluded them. Often, these visions change during our retirement years after finishing the initial “retirement honeymoon” phase. Retirement can have many different visions to different people; but it does not have to have just one.

As the baby boomer generation is retiring in record numbers (some 10,000 per day), there are millions who are contemplating their next move. Financially, many retirees are not prepared to completely discontinue a regular income, but do not need their full annual salary to feel comfortable. For many, working in retirement is not a burden that interferes with more desirable activities. On the contrary, working in a capacity that allows retirees flexibility, the chance to keep their skills sharp, an opportunity to maintain continued connection with colleagues, all while earning additional retirement income, is a highly fulfilling and prosperous endeavor.

According to research by Merrill Lynch and Age Wave, 47% of retirees say they are either working or plan to work in retirement. This figure increases with people who are actually still working full-time: 72% say they plan to work in some fashion in retirement. Millions of retirees with years of experience, contacts, and expertise are underutilized; their knowledge simply sits on the sidelines. Part-time, value-added work opportunities seem to only exist for the select few via personal networks.

As I spoke with many highly-educated and highly-trained retirees, this stalemate seemed to be a common thread. There was certainly no shortage of useful experience, and furthermore, after a number of conversations with Human Resources representatives, many firms actually sought out this arrangement to help complete short-term and/or particularly challenging projects. It was after a number of these interactions that my team and I decided to create Empowered Age. We formed our hypothesis around this inefficiency and our directive was simple: bridge the gap between retirees and firms who desire to tap into their wealth of experience. After some market research and testing, Empoweredage.com was born.

There are a number of websites that cater to retirees looking to work after their “formal” retirement. Many of these services, however, list mostly hourly or manual labor openings. Empowered Age aims to take this a step further, targeting retirees with years of highly skilled experience that can provide exceptional value to a growing firm. Many of these arrangements are projects to help launch a new product, oversee a new office opening, or advise on a new sales strategy.

In our experience, the feedback we have collected has overwhelmingly confirmed our suspicions. First, that there are a significant number of firms looking to engage in this sort of employment arrangement. But more importantly, the retirees or semi-retirees who are eager to fill these roles report a deep renewal of value, continued social status that was familiar during their full-time working years, and a satisfaction in using their knowledge to help drive growth in their organization. In addition, although we did not initially anticipate, firms have been eager to support initiatives that drive inclusion and diversity as it relates to age. This has been an unexpected by-product that we proudly boast.

Moreover, there are encouraging studies that suggest working later in life – and past the “typical” retirement age – can actually be a significant health benefit. This New York Times Article quotes Columbia and Harvard University Professors regarding the mental and physical health benefits of working in retirement as well as the delay of negative retirement consequences such as fatigue and loss of concentration. In fact, researchers from Cornell and Syracuse Universities found that people who continued to work after formal retirement grew their network of family and friends by 25 percent! On the other hand, social networks of retired non-working people actually shrank during the 5-year study period. The study continues, “Work offers a routine and purpose, a reason for getting up in the morning. The workplace is a social environment, a community.”

In this article for The Today Show, author Jean Chatzky writes that researchers from Oregon State University studied a large group of individuals age 50 and over. The researchers found that people who worked past the age of 65 had an 11% lower chance of death from all causes. Ms. Chatzky continues to quote a survey of 80,000 participants from the National Health Interview all over the age of 65: “People in the workforce (particularly those with white-collar jobs) were significantly more likely to report their health was good, very good or excellent than those who were unemployed or retired.” In the countless hours of research we have conducted as noted above, this completely matches what we have found.

Whatever your idea of retirement may be, planning will be an important part. Whether that be financially, geographically, professionally, or socially, be aware to engage in activities that provide value to you. Look for opportunities that benefit your intellectual as well as your physical health. Wherever your journey takes you, we wish you health and success. If part-time consulting work is in that journey, Empowered Age will help you along the way. Visit us at Empowered Age for more information.

Joseph can be reached at joseph.byrne@empoweredage.com. Please follow on twitter @EmpoweredAge.

Get Your Property to Do More for Your Retirement

Written by Sally Perkins

The economic crisis of ten years ago put a lot of things in perspective. One of the ways it changed retirement is by putting property assets on the same level as stocks and bonds because investors regard property as more stable. You can get properties to work harder for you in your retirement but be prepared, 43% of spending for those aged 75 years or older is on annual home-related expenses.

It can be difficult, but there is a lot of potential for return on investment if you manage your property intelligently. Whether you are a real estate mogul with several rental properties or just working with your home, there is more you can do to bolster your retirement funds.

Refinancing

For those with mortgages, it can be worth looking at refinancing to get a better interest rate. After so many years in the work force, those retiring or soon to retire often have much better credit scores than those they had when first mortgaging their homes.

Once your payments are down, you can use the savings to help pay off the principle. The sooner you can pay off the mortgage the sooner you can put the property to work increasing your income. To find out just how much money you can save try using a mortgage calculator.

Downsizing

Leaving a home that you have lived in for years can be tough, but scaling back to a smaller home has some serious advantages financial and otherwise. As we retire, our needs change and the homes we live in are no different. Maybe the kids have moved out, you don’t use the pool much anymore or your knees just don’t appreciate those stairs.

Not only can downsizing your home better meet your needs, but you’ll save a lot of money on maintenance and utility costs not to mention a reduction in property taxes. You can use the money that you save to reinvest and increase your income or just use it to prepare your new home for your new way of life.

Take Action Early

Many mortgages have strict lending requirements about work. Typical requirements include having to show that you have been employed for the last two years. You can explain away some of these requirements or find mortgages that aren’t so strict but those might be more expensive options. The easiest way to avoid that headache is to take action before you stop work if you have the opportunity.

Make Your Retirement Investments Help Each Other

Mortgage companies usually require higher down payments and interest rates for properties that the owner does not plan to occupy. Down payments can reach 30 percent of the price or more. Perhaps you don’t have the funds for a down payment of that size but you can use your IRA funds to help. Since the money in a Roth IRA has already been taxed, if you use it to buy property all of the equities and earning from it can grow tax-free.

Do the Homework

With all the extra time afforded by retirement, you can do valuable additional research. Finding out potential costs like insurance, mortgage fees, taxes and possible maintenance costs will help you make informed decisions about the viability of individual properties. As in business, income properties are about balancing expenses and revenue.

Research can also help you decide on an area or property in which to invest. Learn the local occupancy and price trends. Area real estate agents, publications and even small local banks are all excellent sources of information. You might even find that getting loans from local banks is a better route than the big banks because the smaller banks have more knowledge and interest in their area.

Gifting Equity

Gifting property equity to your children, their spouses or grandkids can be an option that helps you avoid some tax situations. It is possible to move real estate equity to your kids year by year with no tax liability. There are annual limits but with enough management and recipients you can transfer quite a bit every year and it adds up. It is best to refer to a tax professional to be certain what will work best in your situation.

Diversify

While it is true that property investment can add to your retirement, it shouldn’t be the only thing working for you. Diversification of your funds into 401(k)s, IRAs and the like is still sound advice even in these uncertain economic times. Trust in real estate is high but diversification can prevent you from losing all of your income should the market fall in a particular sector.

Maximize Your Property’s Output

Retirement is a time to relax and enjoy life, but if you want to keep your income high to support your new lifestyle, a little bit of work is required. Property investment, in particular, requires some doing. Using a bit of time, effort and the advantages of being retired you can put your property to work funding your retirement.

Retirement Advice I Would Give the Twenty Year Old Me

If I only knew then what I know now. Way back when I was 20 thoughts of retirement never crossed my mind. There were plenty other distractions. I could not even imagine being retirement age. But funny thing – here I am.

I have learned a thing or two over the years whether through my personal experience or those of friends and family. If I could share with the 20-year-old-Dave any words of wisdom to prepare for the road ahead, it would go something like this:

Prepare for the non-financial side of retirement

Everyone knows it is critical to save enough to subsidize the retirement lifestyle you hope to live. But too few consider the importance of preparing beyond finances. What will you do to find meaning in your day? Who will you become once you are no longer defined by the person you were on the job? How does your spouse envision retirement? It is too easy to waltz into retirement without preparing for the coming 10 or 20 or more years ahead. Without genuine preparation you risk boredom and dissatisfaction during a time of life that should be anything but.

Hands off retirement savings accounts

Over my 30 year career I moved from job to job quite a bit. One consequence was repeatedly facing the option to cash out 401k accounts. In most cases the temptation proved too great. Too often I withdrew the funds, paid the 10% additional tax fine and had money to do as I wanted. The only good thing is I did not use the money to splurge but rather to pay off bills that had accumulated. Still I sacrificed potential growth over multiple years that could have added to my ultimate retirement nest egg. “Leave it alone and let I grow” would be my suggestion to the younger me.

Don’t count on staying at the same company

In my career as a sales manager focused on start-up companies there was not much latitude when it came to hitting target goals. If quota was not achieved, no matter how unreasonable or inflated the number, your job was on the line. I had a pretty good batting average over all but there were times when missing a quarterly target cost my job.

Message to younger self: be prepared to work at many different companies over your working years. The days of spending an entire career at one place are gone.

Understand the financial realities of retirement

Retirement will not be cheap. According to Fidelity healthcare costs for the average couple retiring in 2016 will ring in at $260,000. Healthcare insurance rates are sky rocketing with double digit yearly increases becoming the accepted norm. Everything is getting more expensive while your income remains fixed.

No one knows what unplanned health event their future may hold. My parents experienced this recently when my dad had a stroke. Initial hospital charges were huge and the bills keep coming. Thankfully they have a Medigap plan which helps pay healthcare costs not covered by Medicare including co-payments and deductibles.

In retirement you want to do those things you have dreamed of. Realizing those dreams will generally not be cheap either. When budgeting don’t forget to account for those things you have been waiting all your life to do.

Note to 20-year-self: put those dollars aside now so you can do all you dream of when you finally have the time to do it.

Getting retirement right takes practice

Since this will be our first time at it, none of us has any real experience being retired. It is possible you may not get everything exactly right from the get go. Be prepared to be dynamic, to go with the flow. Make changes where necessary, try new things, and don’t be too hard on yourself. There is no deadline to get everything right. So long as you continue to learn as you go you are making progress.

Keep exercising

When I was around twenty I began a life-long commitment to good health setting aside time for regular exercise and attempting to eat a decent diet. I would remind the younger me that good habits now will continue to be good habits later in life. Exercise is an important part of any happy retirement. Keep weight training for muscle and bone strength. Continue yoga and stretching for balance and flexibility. Get some cardio to keep the heart healthy. And don’t neglect exercise for your brain one very important “muscle” to keep in shape. The retirement journey will be that much more enjoyable when you are healthy in mind and body.

It might have been helpful to hear these words of wisdom when I was younger. But I cannot complain. I am retired with my wonderful wife in a beautiful part of the world. We are healthy and happy. And I just started a part time job pouring wine at a wonderful little winery walking distance from where we live. All in all, retirement has turned out a-okay for us.

LoveBeingRetired.com