Retirement Living News

August 2006

HEADLINES  (Click on headline to read story)

• Financial Calculators: The Wall Street Journal Reports on Two
• New Merrill Lynch Study Reports Many Americans
  Not Prepared for Retirement
• Fortune Magazine Offers Perspectives on Retirement
• Moving Difficult for Most Seniors
• AARP Launches E-Newsletter for Employers
• New Wristwatch Monitors Seniors and Transmits 
  Health Data to Family

Archive of Past Issues                          New Retirement Communities

NEWS STORIES

Financial Calculators: The Wall Street Journal Reports on Two 

Last month The Wall Street Journal's "Ask Encore" column reported on two independent retirement-related financial calculators. The one that drew the most attention was http://www.analyzenow.com. It is a Web site run by Henry Hebeler, an author and retired Boeing Co. executive with three degrees from M.I.T. He also assists financial journalists in publications such as The Wall Street Journal, Smart Money, Kiplinger's Personal Finance Magazine, Financial Planning Magazine, and other publications. He is also the author of J.K. Lasser's Your Winning Retirement Plan. 

Start by going to the Web site and clicking on "Free Programs." A pre-retirement planner on the page collects information, such as current savings and 401(k)s, salary, expected retirement date, annual dollars required at retirement, age of desired retirement, etc. It can help you put together budgets for current expenses as well as those expected in retirement. All of this will help you see if your savings are on track. Since retirement expenses such as medical bills (including Medicare Part B premiums) could rise more quickly than inflation, this tool lets you tinker with anticipated increases in future costs. 

The post-retirement calculator cranks out the amount you can spend each year, using your age, number of years you want the investments to last, taxes, income from investments (other than your home), reserves, debt, Social Security, pensions, and any other income. If you have a pension with no cost-of-living adjustment, make sure that's taken into account. In the spot for reserves, be sure to also include savings for future home repairs and car purchases. 

Another privately-developed retirement calculator is www.firecalc.com. It looks at investment returns since 1871. But the calculator doesn't use average historical rates of return. Instead, it analyzes what would have happened if you retired in 1871, in 1872, in 1873 and so on. It then calculates how often your strategy would have panned out historically. 

Suppose you retired with $400,000 invested in a low-cost portfolio of 60% stocks and 40% bonds and were looking to spend $20,000 a year for the next 30 years, with your spending rising each year along with inflation. According to the calculator, that strategy would have succeeded 81.5% of the time.
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New Merrill Lynch Study Reports Many Americans 
Not Prepared for Retirement

The findings of a new groundbreaking study by Merrill Lynch has uncovered a startling disconnect between how Americans and their employers view retirement. The Merrill Lynch New Retirement Study - a one-of-a-kind study that surveyed both individuals and employers - reveals that while many people are actually working in retirement or have taken steps for a new retirement career, most employers are not on track to prepare for this phenomenon. 

Conducted for Merrill Lynch by Harris Interactive, the study builds on the findings of the 2005 Merrill Lynch New Retirement Survey, which discovered that 76 percent of all baby boomers had no intention of seeking a "traditional" retirement. The scope of people surveyed in the 2006 study was expanded considerably to include feedback from U.S. companies as well as a broad spectrum of individuals.

This month we are reporting on the preparedness of individuals for retirement. Next month we will cover how employers are lagging in preparation for the new work force realities. 

The new study confirms that retirement is being totally redefined, not just baby boomers looking ahead to retirement, but by all adults (between 25 and 70). In fact, the "New Retirement" realities and expectations identified in the 2005 study are already well entrenched among 60- to 70-year olds and older boomers who are already living the "New Retirement." 

Key findings of the 2006 study include: 

• The New "Retirement Career. The ideal retirement for 71 percent of adults surveyed is to work in some capacity. In fact, almost half of all adults who do plan to work during retirement, do not plan to ever stop working completely. Among those who expect to work in retirement and eventually stop, the average tenure of their "retirement career" is over nine years and the average age at which they stop working completely is over 70. 
• Working equals longevity in the New Retirement. Among all of the individuals surveyed, the most frequently cited reason for working during retirement was to stay mentally and physically active. As life expectancy increases, both current and future generations of retirees plan to use their longevity bonus to create a freedom-filled and fulfilling "new retirement." Concerns about health insurance and financial realities were also cited. 
• Gaining control over debt. Paying down debt was ranked as the single most important thing to do toward securing a financial future in the coming year (33 percent), followed by saving more (21 percent). More than half (53 percent) of the individuals surveyed were concerned about the amount of debt in their households, yet most (63 percent) expected to have less debt when they retired and expected to be eventually debt-free (74 percent). 
• Rejecting pre-retirement rigidity and seeking out new opportunities. When asked about their ideal work arrangement during retirement, the most popular option was "cycling" between periods of work and leisure. More than half of the adults surveyed would like to change their line of work and have already taken steps to plan for this new career by attending classes or training sessions and researching other careers. 
• Boomers want to give back and prefer to pursue "retirement careers" where they can share or pass on knowledge to others such as consulting and teaching. Volunteering was also ranked very highly. Despite concerns over ageism in the workplace, only one-fourth of individuals over age 60 said they had difficulty finding work if they wanted to. 
• Working and retired. Those who are in the midst of their "retirement career" are more satisfied than those who are retired and not working. In addition, working retirees are less likely to fear not being able to afford healthcare and feel they have less debt. 
•  Are you ready? Less than one-third of individuals who are not yet retired, feel adequately prepared for their retirement. However, three-quarters of boomers feel healthier, are more open to taking on new challenges and believe their work prospects are better than when their parents' generation turned 60.
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Fortune Magazine Offers Perspectives on Retirement

Fortune Magazine's Retirement Guide hit newsstands at the end of June. It included some interesting articles that we call to your attention. Senior editor-at-large Geoffrey Colvin's cover story suggests that you think of retirement as a new adventure. Then you'll enjoy it. http://money.cnn.com/magazines/fortune/fortune_
archive/2006/06/26/8380007/index.htm 

Stanley Bing offers his secrets to a happy retirement. His amusing tale says drive till you can't remember where you parked. Spend money on things you don't need. And eat four rashers of bacon every day. http://money.cnn.com/magazines/fortune/fortune_
archive/2006/06/26/8379998/index.htm 

Anne Fisher, in her story "Get ready for your second act" takes a look at five former corporate climbers who've left the cubicle behind to follow their lifelong passions. http://money.cnn.com/magazines/fortune/fortune_
archive/2006/06/26/8380002/index.htm 

In a story titled "Can we talk?" Ellen McGirt and Andy Serwer, two no-nonsense experts, answer your 10 most urgent retirement questions. http://money.cnn.com/magazines/fortune/fortune_
archive/2006/06/26/8380003/index.htm

Yuval Rosenberg writes about whether aging boomers pull their money out of the market and cause an asset meltdown on their way to retirement? http://money.cnn.com/magazines/fortune/fortune_
archive/2006/06/26/8379997/index.htm
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Moving Difficult for Most Seniors

Moving from a large house to smaller quarters is emotional and painful for most seniors, particularly if they have not moved in several decades. The organizational and physical tasks associated with planning and implementing such a move can be overwhelming. Family and friends often want to help. Downsizing is probably the worst part of moving and many seniors don't know where to start. 

Most seniors, when asked their preference for housing, said they would prefer to stay at home, according to a recent survey by the U.S. Administration on Aging. A person's home represents security and independence to most Americans. 

As seniors downsize, they may find out that a favorite item is not wanted by any of the children or grandchildren and ends up being sold or given away. That's often unsettling to them. Older adults moving into an assisted living or nursing home may be selling their home to finance their stay, which can be emotionally difficult.

When the time comes to move yourself or your parents, you may want to contact the National Association of Senior Move Managers to find the name of a company that meets the standards of the association. When hiring a company, there are several questions you should ask: 
1. How long have you been managing senior moves? 
2. What are your professional credentials? 
3. Are you fully insured for liability and workers compensation? 
4. How do you charge? (Fees should be provided in writing to the consumer or responsible party prior to providing services). 
5. Will you provide me with a written contract? 
6. Can you provide me with references?
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AARP Launches E-Newsletter for Employers

AARP has started a new biweekly e-newsletter that will help company leaders and HR professionals monitor the latest news, research and workplace trends about America's aging workforce. Called AARP SmartBrief, the e-mail newsletter gathers news stories from sources across the country on topics such as worker preferences, employer practices, legal developments and new research studies. Each e-mail digest also includes a section highlighting resources on 50+ workers, "winning strategies" for recruiting and retaining mature workers, and news on AARP research and events. 

"We are excited about this new service for HR experts and employers," said Deborah Russell, AARP's Director of Workforce Issues. "Not only will AARP SmartBrief save employers the time and effort of searching the Web for relevant news, it will help them stay on top of what their competitors are doing to meet the challenges of the changing workforce." 

The e-newsletter, which is being provided at no cost, is yet another tool provided by AARP to help employers prepare for an aging workforce. 

AARP annually prepares a list of Best Employers for Workers Over 50 and has developed best practices and strategies for companies to attract and retain older workers. The list of the 2006 Best Employers will be announced at the end of August. 

Employers can subscribe to AARP SmartBrief by going to http://www.smartbrief.com/aarp/. They can also find information on the Best Employers rankings and learn more about the Alliance for an Experienced Workforce by visiting AARP's Employer Resource Center at http://www.aarp.org/money/careers/employerresourcecenter/
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New Wristwatch Monitors Seniors and Transmits Health Data to Family

A new wristwatch targeted at the elderly does more than tell time. The device, from tech startup Exmovere LLC, is a wireless-enabled wristwatch called Exmocare that is embedded with sensors that monitor certain vital signs of the wearer, including heart rate, sweat levels, movement and 10 emotional states. Using wireless and location-based technologies (Bluetooth and global positioning systems), the watch automatically syncs with a nearby PC, a cell phone (up to 300 feet away) or an optional pocket PC for use while driving, which then sends e-mail or text message updates to family members on the device that they choose. On the road, the device can even tell where the wearer is located, if he or she exits a certain zone or is driving over or under a certain speed. 

The company says its product is designed for older people and can't be used for other age groups like teenagers. That's because the algorithms used to determine emotions are specific for people 65 and older and age groups differ in how they show emotions. Exmocare's emotion algorithms are individualized for each wearer. The wristwatch takes into account the wearer's baseline reading and the readings from his or her last 48 hours, so that only meaningful changes trigger alerts. 

Most of the watches come with service plans. The cheapest plan, which covers six months, runs $1,193, not including a phone or car kit. The company charges $750 extra for the in-car PDA kit, unless you opt for the 36-month subscription plan, which costs an up front $3,303 (that includes the $99 watch and prepaid cell phone). For more information, visit: http://www.exmocare.com/
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