Encore vs Ex-Retired Careers

"Ex-Retired" (or ex-retiree or ex-retirement) at its most neutral just means a person retired and then returned to work. "Encore" carries extra meaning: a person transitioned to a more fulfilling career (sometimes without actually retiring).

As baby boomers plan for the future, more and more of them are expecting to push off retirement or, if they have retired early, to now seek employment. The current financial crisis is a powerful motivator. Perhaps the nest egg has cracked. Or perhaps the housing crunch threatens a planned home sale. Or maybe a recession/depression of unknown length is too great a risk in light of retirement of unknown length.

Comments I've heard from boomers in the past few days reflecting on these issues:

• If I can back into industry, I could work for a couple of years and sock away the salary to replace what I've lost in the last 3 weeks. (Age 62)
  
• I don't have a retirement year in my mind and that's good. (Age 63)
• If I have to go job-hunting it's going to be for a job, not a career. (Age 62)

Maybe the mood of the country doesn't allow for optimistic planning for encore careers, or maybe the encore concept belongs to people with resources to support that choice. I wonder if we'll gravitate to a division of the vocabulary, where Ex-Retired will take on the connotation of being forced to return to employment in order to make ends meet.

© 2008 Mary Bold, PhD, CFLE. The content of this blog or related web sites created by Mary Bold (www.marybold.com, www.boldproductions.com, College Intern Blog) is not under any circumstances to be regarded as professional, legal, financial, or medical advice. Or education advice. Or marital advice. Or even a tip.

Spousal Social Security: Bitter Boomer Women

My friend who retired from Social Security confirms: The most bitter comments he ever heard were from women understanding for the first time that their "spousal benefit" was higher than the one they earned on their own. Technically, it's the woman's own benefit that is paid first, but a combination formula based on 1/2 of the husband's Social Security benefit sometimes boosts pay to more as a spouse than as a worker.

"So, I worked for nothing." That's the common lament although, of course, the worker had income during the years of qualifying for benefits. My friend has suggested to me that there is little comfort to give a person who is realizing that low-income employment has limited reward in retirement. For the woman in this situation, 1/2 of her husband's benefit would be available to her even if she never worked outside the home.

Some Strategy of Interest: A Social Security "Electronic Booklets" web page called Retirement Benefits outlines a method for a woman in her 60s to improve the situation. At full retirement age, she can draw the 1/2 benefit based on spouse's benefits but continue working to improve her own record and (perhaps) increase her own benefit to exceed that spousal amount. (At full retirement age—that's 66 for most boomer women—there is no limit on earned income so she would not reduce her benefit being received.) It is an interesting strategy. And it only requires that a woman work forever....

Very Basic Text: What Every Woman Should Know (ssa.gov/pubs/10127.pdf). Unfortunately, this online file doesn't tell us Everything That Every Woman Should Know, so it is only a starter text. It does help explain the basics about benefits for divorced women, so it has value there.

X- and Y-Generation Women May Be Less Bitter: For baby boom women, the bitter pill is created by the gender wage gap. But we know that for post-boomer women, the wage gap is narrowed. Admittedly, we may be leaving them with other bitter pills surrounding Social Security benefits.

Benefit computation is complicated: The Social Security office provides guidance to retirees but as we are encouraged to file online for benefits, we lose the likelihood of "talking through" our options and understanding the many sub-parts of the regulations. We can read an increasing number of government publications available on the web and try to sort through the particulars. That helps.

The expected disclaimer: Please do not rely on my interpretation of Social Security literature. I'm struggling to understand it all myself. And, as stated already, benefit computation is complicated.

© 2008 Mary Bold, PhD, CFLE. The content of this blog or related web sites created by Mary Bold (www.marybold.com, www.boldproductions.com, College Intern Blog) is not under any circumstances to be regarded as professional, legal, financial, or medical advice. Or education advice. Or marital advice. Or even a tip.

Retirement: When Minimum Wage is Maximum Wage

U.S. minimum wage going up: As of this week the minimum wage in the U.S. will be $6.55/hour. And for retirees between 62 and 66 who are already drawing Social Security, that will be (just about) their maximum earnings limit without offsetting some of their retirement check. Rounding the figures for convenience:

Minimum wage of $6.55 = $13K per year income
Maximum "extra" wages for boomer on Social Security = $13K

Early retirees draw a percentage of "full retirement." Leaving the workforce early (for the current crop of leading boomers, that's before age 66) is allowed but the Social Security benefit is reduced by up to 30%, with the reduction running 5-7% per year of age. I'm referring to retirees at the start of the baby boom, meaning birth year 1946 and later. For a full breakdown on percents and year of birth, see Full Retirement Age at Social Security Online (www.socialsecurity.gov, a site that is sure to need no SEO* in the coming years).

What's wage got to do with it? Age 62 retiring boomers have an earnings limit of about $13,000 after which Social Security benefits are effectively "reduced" by about a third. So, if your Social Security benefit is $12,000, you can earn $13,000 from a job with no penalty. But if your total income goes above $25,000 for the year, your "extra income" will be offset by a reduction in SS benefit. Fancy math and a consult with the folks at Social Security may assure you that upon "full retirement" age, an "early" penalty may work in your favor eventually. The point is, you'll need to do some figuring. (After full retirement age, no figuring is needed as there is no limit on earnings from that point onward.)

The comparison between minimum and maximum wages: Just by coincidence, the 2008 increased minimum wage is approximately the same amount as the early retirees' maximum extra wage. $6.55/hour for 40 hrs/week for 52 weeks/year = $13,624. The earnings limit under Social Security was $12,960 for 2007; it will be $13,560 for 2008.

A handy formula that's realistic for converting hourly wage to annual income is to multiple $6.50 times 2000, because that's very close to a full year's work with a couple of weeks off. This formula permits you to quickly inform your threatening-to-drop-out adolescent relative that the outstanding job paying $7 an hour is actually only $14K a year. And the even more outstanding wage of $8 comes to only $16K a year. It's amazing how many adolescents marvel at the arithmetic. Eventually, they realize it was simple multiplication. (Or maybe if they drop out, they won't.)

*SEO: Search engine optimization, or processes whereby Internet publishers increase the volume of "traffic" to web sites. ~ Lida

© 2008 Mary Bold, PhD, CFLE. The content of this blog or related web sites created by Mary Bold (www.marybold.com, www.boldproductions.com, College Intern Blog) is not under any circumstances to be regarded as professional, legal, financial, or medical advice. Or education advice. Or marital advice. Or even a tip.

Retirement Living: The Home

The Home. Twice, residents at the Erickson property that I visited last evening referred to the "campus" as "the home." They spoke with humor and one warned, "not everyone likes that word." I was at the Highland Springs campus in North Dallas with a college Practicum (internship) class. A co-teacher was the organizer and I was the tag-along.

Senior, retirement, community. In a society that still prefers "aging in place," a move to a campus like Highland Springs isn't made lightly. Aside from the financial considerations, anyone making the decision is sure to be questioned by family and friends. This is pretty interesting because in my field we define the preference to age in place (meaning at one's home, typically the home of the past 10+ years) as being the aging person's preference. But it is one that is shored up by family opinion and community patterns.

NORC: One of those patterns is the NORC, or naturally occurring retirement community. It's what we commonly describe as an aging neighborhood. Children are grown and gone; the homeowners are retired or nearly so; activity shifts from families' needs to retirees' priorities.

The newer pattern: The planned retirement community (like Erickson and others) hasn't replaced the NORC but it does present retirees with a choice for maintenance-free housing and, usually, facilities that resemble a resort. Boomers may provide the tipping point for retirement housing, though that's likely some time off. The communities that require a "buy in" will interest boomers who can liquidate, most likely by selling a family home. For the boomers who make the move, the retirement community will then become the place for "age in place," which may mean for decades.

One a personal note: I see the retirement community model as a gift I can give my children in that I can age in a resort-like place and they can be spared several stages of decision-making about my ability to live on my own. I don't know the timing yet and Tom Bold does pose a problem because he only imagines living on his own. There is hope: last night I spotted poker tables in the pool hall near the dining room. Perhaps by the time I drag him into such a facility there will also be a salon for old guys and their computer games. Then, we'll be ready to negotiate.

© 2008 Mary Bold, PhD, CFLE. The content of this blog or related web sites created by Mary Bold is not under any circumstances to be regarded as professional, legal, financial, or medical advice. Or education advice. Or marital advice. Or even a tip.

Clothes and the Economy

Boomers impacting an industry. We've predicted for years that retiring baby boomers will influence housing costs, health care costs, travel, luxury purchases, and so on. But clothing hasn't been much mentioned. Of course, we all know the logic: when you stop going to work every day, you end certain expenses or greatly reduce them. Lunch expense, solved. Gasoline or subway fare, much reduced. Clothing and shoes, drastically cut. Those are some of the considerations that boomer women used to take into account if they had the option of choosing when to work outside the home. Whole books and women's magazines were devoted to calculating the cost of "going to work." Sometimes, the calculations justified staying in the home for a while longer, or encouraged women to go back to school for the degree that would boost salary to put them on the winning side of the equation.

The same women are now forecasting personal finances in terms of retiring from that calculation. And for every personal finance concern, there's a market concern. In this case, how will boomer retirement impact the clothing industry? Textiles are measured mainly in global terms today, so it's not just a question about the U.S. economy. The whole of the concern is too large for this blog. So, we'll take it back down to the personal finance level.

Observation #1: Weekly trips to dry cleaners are over. Tom Bold was never accused of sartorial splendor at the technology firms he served but he did wear pressed shirts and trousers. They were tended by the neighborhood cleaner, with barely a break in almost 30 years. (Grad school years before that did not involve pressed clothing.) And as I have shifted activity from campus hallways to working at a distance, I have dropped dry cleaning needs from daily to just a couple of articles a month. This has meant a drop from $213.95/month to $28.27/month.

Observation #2: Sometimes we replace one expense with another. Now, I didn't say I was giving up clothes entirely. As I have aged I have become quite attached to the concept of being comfortable in clothing and currently seek to make a presentable appearance with as little fuss as possible. Enter Allie Coosh. That's not actually a name but a phonetic spelling of the French phrase, "to the bed," which is fitting because the designer started out in pajamas. In Dallas, Paulette Martsolf designs for comfort in, happily, mostly washable fabrics. (My dry cleaning dollars simply shifted to a new location: Allie Coosh.)

Retirement clothing: So, what clothing is actually required for retirement? Will we buy fewer clothes, or just different clothes? Will we clean them ourselves? Will we ever press a shirt again?

© 2008 Mary Bold, PhD, CFLE. The content of this blog or related web sites created by Mary Bold is not under any circumstances to be regarded as professional, legal, or medical advice. Or education advice. Or marital advice. Or even a tip.

Downsizing: the Dream

Boomers talk a lot about downsizing. That doesn't mean houses are getting smaller or living spaces are contracting (aside from Manhattan and New York environs). In fact, compared to a generation ago, we're mainly choosing houses of 2000+ square feet instead of the formerly big 1500-1700 square feet. And in some communities today, the mini-mansion of 4000+ square feet is still being built. (This, in spite of a mortgage crisis and a stagnating economy.)

For many baby boomers, generous square footage represents gracious living. Or maybe we're still reacting to our childhood condition: many siblings sharing a single bathroom and trading out bunk-bed spaces once a year. Baby boomers continue to be impressed by 2.5 baths, a guest room, a bonus room, and as many other extra spaces as they can afford until they remember that they will have to dust and vacuum these expanses.

Downsizing—or the dream of it—promises lower housing costs, more energy efficiency, less yard maintenance and therefore more free time, and possibly even a maintenance-free existence. Smaller living spaces are not always less expensive, of course, depending on your metric. The cost per square foot may be higher for the small house, for example. And neighborhood dictates prices, certainly, so a "move to small" may actually be a "move to urban" at higher land prices.

Energy efficiency and lowered maintenance are more sure consequences. Heating 1500 square feet costs less than heating 3000 square feet, insulation and window count being equal. A patch of garden space requires less mowing, weeding, and watering than a standard lawn. Reducing spaces that need heating/cooling and maintenance cannot be confused with "buying green," however. A building or remodeling project that strictly follows principles of recycling and renewable resources continues to cost more than standard practices. Compromises can be made to bring a project into line with conventional costs, but designing a sustainable space is in a different category from our issue today. Today, we're looking at just the "less space = less energy" equation.

Downsizing to less space represents that other dream of maintenance-free housing. Small means keeping everything in its place. Small means fewer appliances that will need repair/replacement. Small means fewer deep cleanings and maybe even affordable cleaning services (price a 1-bedroom apartment against a 5-bedroom house). Small means leaving for a month-long travel and not having to arrange for any service other than mail-hold.

Boomer retirement is marked by huge numbers of people dreaming of downsizing. How they fare in the housing market (both as sellers and buyers) depends far more on national numbers than on personal desires, though.

On a personal note: I used to be judgmental about people who approached retirement and built their "dream house" at long last. I knew what they were operating on: old images of success and the great desire to have many bedrooms and bathrooms as possible for adult offspring and their families visiting once a year at Thanksgiving. I knew they needed to downsize, not upgrade. And, so, as an empty nester in my late 40s (and Tom in his mid 50s), when we needed to move to a new area to equalize our commutes, I knew we had the perfect opportunity to downsize. We could even go condo and be done with lawn maintenance that neither of us enjoyed. With a short list of requirements (well, knowing that 2 bathrooms would be a minimum, for example), we began home-hunting. We had every intention of downsizing. And then I came across a geodesic dome amid 300 trees (small diameter, but impressive nonetheless). And we didn't downsize. We went from 2400 square feet to 3600. From 3 bathrooms to, well, we stayed at 3 bathrooms. From a modest city plot to nearly an acre. From full city services to a septic tank. From a 2-car garage to a 3-car garage. I am no longer judgmental about what boomers do....

© 2008 Mary Bold, PhD, CFLE. The content of this blog or related web sites created by Mary Bold is not under any circumstances to be regarded as professional, legal, or medical advice. Or education advice. Or marital advice. Or even a tip.

Working for Benefits

A recurring theme: Boomer women increasingly report, "I'm working for benefits," which may suggest that they would pursue different work or use of time if it weren't for "the benefits." Those other pursuits can be addressed another time; our topic today is what those benefits are. Typically, the primary need is for health insurance. Mentioned less frequently, at least among the women I talk to, is retirement or pension. (That doesn't mean retirement benefits are less important—just less immediate.)

Why are women working for health insurance? To start, our modern society keeps us notified about the high cost of medical care and imparts a sense of responsibility to be prepared for the worst. It's not something earlier generations had to address, mainly because they didn't live long enough to have the choice. At the last turn of the century, death came at age 40 or 50, if one was long-lived. (The wise old person in the village was honored perhaps mainly for being the only old person in the village.) At the current turn of the century, we predict death at 70 or 80 and even 90 for great numbers of our population.

But boomer women are not 70 yet. They are a decade or more younger and simply planning for a very long rest of life. In terms of health benefits, they see Medicare in the near or distant future. In the meantime, they are working for benefits and almost always mean they are purchasing insurance from an employer's group plan. A boomer woman may be covering just herself, or self plus a dependent such as spouse or child. The great historical change of note: the increasing number of women who are the earner of the benefits (not the dependent on a spouse's plan).

If they weren't working for group benefits: They would either purchase private insurance or go without. There is a middle option referred to short-hand as COBRA, typically uttered with fear and loathing. In fact, COBRA is an extension of group benefits (upon leaving employment) and a potential bridge to converted benefits (moving from group to individual coverage at the same or similar advantaged pricing). Those are good options for the person who has resources on hand to pay for COBRA in transition months. Admittedly, if resources are scarce, COBRA may not provide needed coverage, and more expensive private insurance may be completely beyond reach.

• COBRA: Keeping Your Group Health Insurance
  (Web page - 2006 article by AARP with helpful definitions)
  
• An Employee's Guide to Health Benefits Under COBRA
  (PDF - 2006 reprint by U.S. Government with comprehensive explanations)
  

On a personal note: I remember my longevity moment. I was reading a Gail Sheehy book in which she reported some statistical research: if a woman of my age cohort (people born in the same 10-year period) made it to age 50 without having a cancer, then life span could be estimated at 90 years. That describes me, although I quickly point out that the prediction is actually based on probability. Some of us in my group will reach 90, not all of us.

Will I COBRA: I will probably COBRA this year. In leaving a university position, I have opportunity to continue my group coverage through COBRA for some months. This occurs at the same time that my husband is COBRA-ing. A lay-off package provided him with 9 months extended company-paid group insurance, to be continued through 9 months of COBRA coverage. Our coverage is not coordinated as we each carried separate insurance coverage through employment. The timing is interesting now, as we research the options for each of us. If one of us returns to employment with benefits, then we might return to a earlier pattern of carrying the other as a dependent. If neither of us returns to a company plan, we will have to research the options—and report them here.

2011 is coming

The boomer identity: Baby boomers (everyone born in the U.S. between 1946 and 1964) form the largest generation cohort in history. Our impact has already been huge (we produced the baby boomlet, for example) and we will likely live longer than any previous generation. Barring a global disaster that affects longevity, we will work to retirement, retire, and then possibly work some more in ways that will influence the U.S. economy for the next half-century. Our housing and health care decisions will impact not just our own generation but the next one, too, both at the macro (economy and social supports) and micro (family and community) levels. In short, we will expect the next generations to support us, sometimes financially. And in a fashion reminiscent of our own coming-of-age in the 1950s and '60s and '70s, we will be loud and demanding.

2011 is coming: In conversation with a young relative, I asked when we would gather for her high school graduation. She said, "2011" and I exclaimed, "that's the start of boomer retirements—what a year!" And she had no clue as to what I was talking about. Will the first wave of boomer retirements eclipse her milestone of high school graduation? Of course not. But her rite of passage will be part of a very busy year because even though a lot of boomers will not be able to retire in 2011, even a fraction of them taking retirement will make news. 2011 is coming.

On a personal note: Call me Lida. It's a nickname, so if you want to know more about me you'll have to search my professional name, Mary Bold. What you'll find is my identity as a consultant and teacher and author. I work in the fields of higher ed assessment, distance learning, and family studies. The overlap for this column is my academic discipline, family studies. I come to the topic of demographics with an intense interest in how families operate and I take a socio-historical view of all things normative-adaptive. (That's a fancy way of saying that I do not think the family or society is in decline. I consider all changes to be adaptive, and I consider change inevitable.) And I come to the topic of boomer women with intense self-interest. I was 40 years old before I realized that most of my assumptions about health, wealth, and retirement were wrapped up in a "package deal" of spousal benefits. Of course, that package doesn't fit today's realities. I had to replace that generational mindset and look for new ways to navigate middle age and plan for retirement. I am adapting.

~ Lida