With Required Minimum Distribution from Most Retirement Accounts Mandatory After Age 73, Here’s a How-To on RMDs

If there’s one aspect of retirement that seems to be a constantly-moving target, it’s the topic of RMDs – required minimum distributions. The RMD is Uncle Sam’s way of forcing retirees to start pulling dollars out of those tax-deferred retirement accounts like the 401(k) and 403(b) accounts offered by many employers. The amount of money involved here is staggering: one source pegged the total 401(k) balance at roughly $7.3 trillion just two years ago! That represents a lot of tax dollars – so it’s no wonder the issue of withdrawing those pre-tax funds (and collecting all that tax revenue) is on the government’s mind.

But RMD rules do keep changing, which is why we wanted to bring you this recent article from US News on the topic.   Reporter Emily Brandon provides a snapshot of the current RMD rules along with some practical how-to tips for making required withdrawals. The important thing to remember is that RMDs need to be taken seriously – some hefty penalties await if you ignore the rules.

The Tax Bill Has Come Due

“After years of delaying income tax on your 401(k) and individual retirement account contributions,” Brandon writes, “you must finally pay the tax bill in retirement.” This bill comes in the form of income tax to be paid on the withdrawals you’re required to make from 401(k), 403(b), and traditional IRA accounts. RMDs are mandated by the IRS after age 73, and each withdrawal triggers an income tax obligation.

Brandon lists seven pointers about how and when to take your RMD withdrawals. There are ways to do this, she writes, “while preserving as much spending power as possible.” Let’s take a look.

Start RMDs After Age 73

The first question you might be asking is “When?” If you’re 73, the answer is now. “You must take your first required minimum distribution by April 1 ^st of the year after you turn 73,” says Brandon. During each subsequent year, the deadline is December 31 ^st. Fail to comply and the bite becomes costly. “The penalty for failing to take a required minimum distribution is a 25 percent tax in addition to regular income tax on the amount that should have been withdrawn,” says US News. For wealthy savers with hefty balances, that adds up fast.

(Brandon notes that the penalty could be reduced to 10 percent if you act quickly to correct the oversight.   This article from Investopedia gives more information about steps to take if you miss an RMD deadline.)

By the way, the US News article suggests that the age to start required minimum distributions is going to increase to 75 starting in 2033. Based on experience, we predict more adjustments long before then.

Avoid Taking Your RMD Twice in the Same Year

While you will have extra time to take your first RMD – until April 1 ^st in the year after you turn 73 – delaying might be costly. “Retirees who delay their first required minimum distribution until April 1 will need to take two distributions in the same year,” says Brandon, “because the second distribution will be due December 31.” Both those withdrawals will be taxed as income, which could significantly increase your income tax bill in that first year of RMDs.

“Waiting to take your first RMD until the following year may sound great to defer the income. However, it will increase your income in the tax year that you take both,” says Curtis Bailey, a Cincinnati-based financial planner. “This could not only affect the taxable amount of your Social Security benefits but also increase Medicare surcharges.” ( This Fortune article explains how those income-based Medicare Part B surcharges can surprise retirees.)

Delay 401(k) Withdrawals if You Are Still Working

If you’re still working at age 73 and beyond, can you delay your RMD withdrawals? The answer is yes – but only on the current 401(k) you’re actively contributing to. Any pre-tax IRAs or 401(k)s from previous jobs are subject to RMD rules. You won’t have to consider taking RMDs from your current plan until April 1 ^st of the year after you retire, the article explains. (Note that different rules apply if you own a 5 percent or greater stake in the company you work for, so you’ll need to consult a good tax planner.)

Brandon spoke with financial planner Emily Benedetto of Santa Monica. Her advice is to look into the rollover option. “If you’re still working and want to avoid RMDs from your IRAs, check to see if your company plan accepts rollovers, Benedetto suggests. “You could roll your IRA assets into the 401(k) and avoid the RMDs during your working years.”

Make Sure the RMD Amount is Correct

“A required minimum distribution amount is generally calculated by dividing your account balance by an IRS estimate of your life expectancy,” says US News. We checked several sources online and found this January article from BankRate.com showing the factors used by the IRS to calculate payments. For example, a 75-year-old would divide their year-end account balance by 25.5 to calculate RMD due. (Note that your spouse’s age might affect your RMD. “If you have a spouse who is more than 10 years younger than you and the sole beneficiary of your IRA, your spouse’s age must also be factored into the calculation,” Brandon writes.)

You can exceed the RMD if you want to. “Retirees can withdraw more than the required minimum amount each year,” says US News, “but excess withdrawals will not count toward required distributions in future years. You can take any number of withdrawals throughout the year, as long as the minimum is met by December 31 (or April 1 for the first distribution).”

Take Distributions from the Worst-Performing Account

People with multiple accounts often ask if they have to withdraw from each one. The answer, says US News, is no – but every account you have needs to be added to the calculation for RMDs. Still rules are different for IRAs and 401(k) accounts.

“If you have several IRAs, you must calculate the required minimum distribution for each account,” Brandon writes, “but you don’t have to take a separate withdrawal from every IRA you own. You can add up your IRA distributions and take it all out of one IRA or a combination of any IRAs you choose.” Financial planner Benedetto told Brandon, “If you had different investments across your accounts, that would be the case where I’d look closer at the holdings and determine the most efficient distribution plan.  For example, if you had a particular holding that you didn’t want to sell, you could avoid liquidating it and distribute from a different account.”

What about those 401(k)s you’ve accumulated? “Those with a 401(k) or most other types of workplace retirement accounts must take a withdrawal from each account,” says US News. “However, if you have multiple 403(b) accounts, you can total the required minimum distributions and take them from any account or combination of accounts.” Again, here’s where good advice is essential.

Convert to a Roth IRA

Of course, one way to avoid RMDs entirely is to convert to a Roth IRA, in which dollars grow tax-free. “There are no minimum distribution requirements for Roth IRAs,” says Brandon. “You already paid income taxes on Roth IRA contributions, and the money can be withdrawn as you need it or can be passed on to heirs.” 

The problem is that, when you pull money out of a non-Roth 401(k) to convert it to a Roth account, you’ll pay income tax on that withdrawal. “If you know you’ll be in a low tax bracket in the years preceding age 73, you can convert a part of your pretax IRA and pay very little tax on the conversion,” Benedetto says. “That money will then get invested in your Roth IRA and avoid any future RMDs.” (As US News notes, Roth 401(k)s do currently have withdrawal requirements in retirement, but these requirements will be eliminated beginning in 2024.)

Consider Making a Qualified Charitable Distribution

Another way to avoid some of the tax burden of your RMD withdrawals is to be generous. “You can avoid paying income tax on your required minimum distribution if you donate the amount directly from your IRA to a qualifying charity,” says US News.

As North Carolina financial planner Megan Kopka told Brandon, “If you are charitably inclined, starting at age 70 1/2 and after, you can meet your RMD and donate to charity without any impact on your taxes.”  Note that this type of qualified charitable distribution can only be made from an IRA, not a 401(k). Also, such gifts are subject to a limit of $100,000 per individual or $200,000 per couple each year. Still, it’s a very nice way to help others while you save on your tax burden!

Breaking News: Rajiv’s New Book is Coming Soon!

We have big news! The long-awaited book by Rajiv Nagaich, called Your Retirement: Dream or Disaster, will launch in March 2023.  As a friend of AgingOptions, you have the option to preorder now.

You’ve heard Rajiv say it repeatedly: 70 percent of retirement plans will fail. If you know someone whose retirement turned into a nightmare when they were forced into a nursing home, went broke paying for care, or became a burden to their families – and you want to make sure it doesn’t happen to you – then this book is must-read.

Through stories, examples, and personal insights, Rajiv takes us along on his journey of expanding awareness about a problem that few are willing to talk about, yet it’s one that results in millions of Americans sleepwalking their way into their worst nightmares about aging. Rajiv lays bare the shortcomings of traditional retirement planning advice, exposes the biases many professionals have about what is best for older adults, and much more.

Rajiv then offers a solution: LifePlanning, his groundbreaking approach to retirement planning. Rajiv explains the essential planning steps and, most importantly, how to develop the framework for these elements to work in concert toward your most deeply held retirement goals.

Preorder today and get a free bonus video of Master Your Future, Rajiv’s first public television special. Click here to PREORDER NOW.  And remember, Age On!

(originally reported at https://money.usnews.com)

Should You Use a Reverse Mortgage to Help Fund Retirement? The Answer is a Definite “Maybe”

It has been a while since we addressed the topic of reverse mortgages here on the AgingOptions Blog. This type of mortgage, also called an “HECM” (which stands for home equity conversion mortgage), can be a potential game-changer for retirees who need a steady flow of tax-free income. But there are downsides to reverse mortgages as well, and that mix of pros and cons makes it imperative that you do your homework before signing on the proverbial dotted line.

In this recent article from The Motley Fool, financial planner Matt Frankel gives a pretty balanced answer to the question, “Should you use a reverse mortgage to retire?” There are certainly situations in which the response is a solid affirmative – but for others, an HECM could be a costly mistake. Let’s take a look and Frankel’s pros and cons.

Starting With the HECM Basics

“A reverse mortgage could provide much-needed cash flow, but there is more to the story,” Frankel writes. “A reverse mortgage can provide income for retirees, either as a lump sum or fixed monthly payment.”  But as we said above, the “should I or shouldn’t I” question has no simple answer. “For many retirees,” says Frankel, “a reverse mortgage can be a great financial tool, but it isn’t right for everyone.”

The big challenge many retirees will face is ensuring adequate income over the long haul of retirement. “If you’re retired, or getting close, you might be thinking of how much income you’ll have after retirement and whether it will be enough,” says the article. “Even with Social Security and retirement savings accounts, many retirees might be faced with a substantial drop in income after leaving work for good.”

Aimed at qualifying homeowners 62 and older, a reverse mortgage works in the opposite way of a traditional mortgage. “Instead of you making payments to a bank and gradually building equity in your home,” says Frankel, “a bank makes payments to you in exchange for your home equity.” Sounds good – but the devil (as they say) is in the details.

Advantages of a Reverse Mortgage

Since most older Americans view the equity in the home as somehow sacrosanct, never to be tampered with, why would someone opt to tap into that asset pool? The biggest reason is for guaranteed extra retirement income. But, as The Motley Fool article makes clear, that’s not the only reason why an HECM might be attractive in our golden years.

• Financial flexibility: There are several ways in which a retiree can choose to receive income from a reverse mortgage. Some opt for a fixed monthly payout while others borrow a lump sum. The best option, Rajiv tends to believe, is to use an HECM to open a line of credit that you can draw from if and when you need it. With most reverse mortgages, that line of credit actually grows over time, adding to your borrowing power.
• Keep your home: “Sure,” says Frankel, “you could sell your house in retirement to access your equity, but then you have to move. With a reverse mortgage, you get to stay in your house for as long as you want.” This is true even if you outlive your equity. “Even if a reverse mortgage results in a bank owning all of the equity in your home, you continue to live there, and don’t owe anything to the bank for as long as you’re alive, unless you decide to sell the home.” (Of course, in that case there will be no equity left for your heirs, either. See below.)
• Tax-friendly income: “Payments you receive as a result of a reverse mortgage are not taxable income,” says Frankel. “In the eyes of the IRS, it is simply a return of money you already have.”
• Non-recourse loan: This is an important benefit of most reverse mortgages. A “non-recourse loan” is backed only by the home itself, not by any of your other personal assets. “No matter how much a borrower receives from a bank and how large the loan balance becomes,” says the article, “the amount due can never be more than the value of the home.” This protects your heirs from owing your bank more than your home is worth after you’ve passed away.

Potential Drawbacks to Consider

So much for the good news – now for the bad news. “There’s no such thing as a perfect financial product,” Frankel writes, “and reverse mortgages certainly are not an exception.” He lists these drawbacks to keep in mind as you evaluate a reverse mortgage option.

• You lose your home equity: Frankel calls this “the biggest reason to not get a reverse mortgage.”  After all, you’ve spent decades building up the equity in your home, and if you live long enough with an HECM you could potentially die with no equity left at all. “You’ll still be able to keep living in your home,” he writes, “but a reverse mortgage might not be the best option if you want to leave your home to your heirs.” (In our personal experience, we know that the reverse mortgage holder has to be satisfied first before your estate can be distributed, so your heirs will have to address this issue.)
• Lots of hefty fees: Another drawback of HECM loans is the expense of setting one up. “Reverse mortgages have relatively high closing fees compared with other types of loans,” says Frankel. “Plus, when interest rates are high, your equity can start to disappear at a rapid pace.” While most of those fees will get rolled into the loan itself, the upfront cost will add to the amount your heirs will have to cover when you’re gone.
• Other home expenses are your responsibility: An HECM doesn’t absolve you of the costs and headaches of home ownership. “You’re still responsible for paying property taxes, insurance, and maintenance on your home,” says Frankel. “If you fall behind on these expenses, the bank could force you to sell.”

So – Is a Reverse Mortgage Right for You?

When it comes to making a recommendation, Frankel leaves the ball squarely in the retiree’s court. “The bottom line is this,” he writes: “Whether a reverse mortgage is right for you or not depends on your unique situation. For example, if you aren’t worried about leaving your home to your heirs and don’t mind the closing costs, a reverse mortgage can be a great way to build retirement income. On the other hand, if you like having your home equity as a financial safety net and you have other borrowing options, such as a HELOC (home equity line of credit), it might not be the best option.”

We’ve asked Rajiv Nagaich of AgingOptions about reverse mortgages many times before, and his advice is always the same: don’t make the decision in a vacuum. “I urge you to get good objective counsel before you decide,” he warns. “Don’t just talk to somebody who sells reverse mortgages for a living! Are they going to answer your questions objectively? Probably not!”

Rajiv also suggests you consider how long you plan to stay in your home before taking out an HECM. “If this is the home you plan to stay in for the rest of your life, then fine, a reverse mortgage might make sense. But,” he adds, “if there’s a reasonable chance you’ll be moving in four or five years, there are other borrowing options that will serve your needs a lot better and save you many thousands of dollars.” If you have questions about this topic, reach out to us at AgingOptions.

Breaking News: Rajiv’s New Book is Coming Soon!

We have big news! The long-awaited book by Rajiv Nagaich, called Your Retirement: Dream or Disaster, will launch in March 2023.  As a friend of AgingOptions, you have the option to preorder now.

You’ve heard Rajiv say it repeatedly: 70 percent of retirement plans will fail. If you know someone whose retirement turned into a nightmare when they were forced into a nursing home, went broke paying for care, or became a burden to their families – and you want to make sure it doesn’t happen to you – then this book is must-read.

Through stories, examples, and personal insights, Rajiv takes us along on his journey of expanding awareness about a problem that few are willing to talk about, yet it’s one that results in millions of Americans sleepwalking their way into their worst nightmares about aging. Rajiv lays bare the shortcomings of traditional retirement planning advice, exposes the biases many professionals have about what is best for older adults, and much more.

Rajiv then offers a solution: LifePlanning, his groundbreaking approach to retirement planning. Rajiv explains the essential planning steps and, most importantly, how to develop the framework for these elements to work in concert toward your most deeply held retirement goals.

Preorder today and get a free bonus video of Master Your Future, Rajiv’s first public television special. Click here to PREORDER NOW.  And remember, Age On!

(originally reported at www.fool.com)

Caring for Aging Parents Takes Planning and Patience, to Help Make a Difficult Time A Bit Easier to Navigate

Here on the AgingOptions Blog, we write frequently about the joys and challenges of caring for an aging loved one. That’s because millions of us are already caught up in the work of caregiving, either as one who gives care or one who receives it. The odds are high that, if the trials of caregiving haven’t yet affected your immediate family, they will.

Given that fact, not to mention the inexorable realities of demographics, planning ahead for caregiving should be something more of us do. With that in mind we offer this recent article from Kiplinger in which reporter Alvina Lo suggests that there are ways for families to lighten the burden of caregiving through careful preparation. Advance planning might not entirely soften the emotional blow of caring for aging parents, but it can certainly reduce some of the stress and make the tasks of caregiving easier to bear.

Sandwich Generation Faces Unique Struggles

As Lo’s Kiplinger article observes, our society now has an increasing number of professionals who are part of the “sandwich generation,” caring for both young children and aging parents at the same time. This inter-generational reality has brought new stresses to light.

Lo compares “senior caregiving” with child-rearing. “While many planning concepts may be similar” she writes, “the dynamic and emotions involved when caring for aging parents are dramatically different.” Her article “[addresses] some of the common considerations as one enters into this stage in life.”

Having Proper Legal Documents and Plans in Place

First of all, says Lo, having all the proper legal documentation is essential to make sure that everything goes as smoothly as possible. These documents generally include your parents’ will, powers of attorney, health care proxies, and burial arrangements.

Lo explains that there are two types of power of attorney: springing power of attorney, and durable power of attorney. “In a springing power of attorney,” Lo explains, “the document becomes effective at a future time, usually upon a certain event such as incapacity of a parent. That’s when it ‘springs’ into effect. In a durable power of attorney, the document is ‘durable,’ meaning it becomes effective immediately upon signature regardless of future events.” It’s vital to talk with your parent or parents, and a legal adviser, to see which type is best for their unique circumstances.

Parents may struggle with the decision of who should serve as POA. “If there are siblings involved, it would be important to have an open and honest dialogue as to who should serve in this role as the attorney-in-fact,” Lo adds. She admits that she is wary of clients who think it best to name all of their children in the role of power of attorney, with shared responsibilities. It can lead to too many possible logistical issues, especially when needing multiple signatures and group consent before an action can be taken on behalf of a parent.

“If it is indeed a parent’s wish to name multiple people in this role,” she writes, “then it would be important to clearly document how decisions are made — by any one of the attorneys-in-fact, by majority or by unanimous consent.” But a better course would be to choose the best person, regardless of birth order.

Health Care Proxy and Living Will Could Be the Same

When kids care for parents, the ability to make medical decisions is often critical, and that entails creating a health care proxy. The health care proxy “appoints an agent to make medical decisions on behalf of a parent in case of incapacity,” Lo explains. “A living will or an advanced directive provides a parent’s wishes on medical treatment when it comes to end-of-life decisions. In some instances, a living will and health care proxy can be the same document.”

It’s common for people to confuse the two documents, since they both deal with medical decisions. But Lo explains it this way: “Think of the living will or advanced directive as the written memorialization of a parent’s wish and the health care proxy as the person who is going to carry out those wishes.”

Finally, there’s the parent’s will. “A will provides for the disposition of probate assets upon death,” Lo writes. “Of special consideration is understanding a parent’s wish as it relates to burial preferences. This may or may not be documented in the will. If there is any pre-determined or perhaps even paid-for burial arrangements, it would be advisable to have all those documents on hand.”

Obtaining Needed Information in Advance

Lo warns that, aside from the emotional burden, often the most difficult aspect of caring for aging parents is not having all the right information, and not having it in the right place.

“Knowing a parent’s full financial picture, including assets, liabilities and cash flow needs ahead of time is an important foundation you will need should you have to step in, which unfortunately for many people, happens unexpectedly when a parent suddenly falls ill or becomes incapable of handling his or her finances,” she writes.

She adds, “Transparency to this level can admittedly be a challenge, and so at a minimum, I would advise that you know where and who to go to for this information if and when the times comes. Make a list of a parent’s financial adviser, accountant, attorney and other trusted adviser, so you know who to call if needed. Know where all the important legal and financial documents are so you know where to look if needed.”

Accounting for the Costs of Caring for Parents

Similar to planning for childcare costs and eventual retirement planning, Lo says that it’s vital for you to understand the costs associated with your parent’s care, along with the various funding options available to them. “What resources do your parents have that are available for their care?” she writes. “Are there liquid or easily accessible investment assets, retirement accounts and/or a long-term care insurance policy in place?”

Moreover, since not all assets are created equal when it comes to timing and eligibility for government benefits, it’s important for you to know the landscape of where your parents stand. “For example,” Lo explains, “qualified retirement accounts are unique because they get a degree of creditor protection, and they may impact Medicaid eligibility benefits. So it may be advisable to look to non-qualified accounts as the primary and first funding source to the extent that required minimum distributions (RMDs) are not sufficient to cover the costs of care or are not yet being taken.”

She adds, “On the other hand, if a parent’s investment account has significant appreciated assets that if liquidated would incur significant capital gains taxes, then it may be wiser to use other funding sources with less of a tax bite. This is all situational and requires a detailed analysis of the various accounts and funding sources.”

Underlying all that data for many families as the “elephant in the room” is the honest question you need to ask yourself: to what degree are you willing and able to be a funding source for your parents’ care? “How much of the parental care will you be shouldering, and how would that fit into your own budget and plan? Have you had the conversation with your spouse or significant other on what that amount may be? If you have siblings, how will each contribute?” Lo poses. All of these questions are best asked before anything happens to avoid disaster and undue stress later.

Medicaid and Elder Law Planning

As many of our readers know, Medicaid is the federally funded health insurance program administered by each state for low-income people. Many Americans are above the threshold to qualify for benefits under Medicaid, but it’s important to do some planning if you think you may want to avail yourself of those benefits in the future. (This also applies to VA benefits.)

“At a very high level, to be eligible for Medicaid benefits, one must meet both a resource and income test,” Lo writes. “The threshold varies state by state. Depending on where your parent lives, certain assets may be exempt from the calculation, such as qualified retirement accounts in payout status, primary residence up to a certain amount, irrevocable funeral/burial arrangements and certain qualified trusts.”

She adds, “The planning strategy is for a parent to divest personal assets so that they fall below the threshold amount. This way, when the time comes for medical needs, a parent could apply for and receive Medicaid coverage and benefits. Timing is incredibly important because there is generally a ‘look-back period’ of 60 months (or less, depending on the state). Therefore, advanced planning to divest of property and income below the threshold level needs to be done well in advance of medical needs.”

In the end, Lo admits that it’s best to consult a qualified elder law attorney local to your parents’ residence to make sure you take advantage of every opportunity available to you. For example, many clients of Rajiv Nagaich of Life Point Law have taken advantage of what’s called a Safe Harbor Trust as a tool to set aside assets for future long-term care, free from Medicare’s “look-back” concerns. We urge you to contact a qualified attorney for advice particular to your family’s situation.

Preparing for the Emotional Side of Planning and Caring

Finally, Lo recognizes that much of the difficulty of caring for aging parents is emotional, especially the transition of roles as you take on the mantle of “caregiver.”

“It takes an incredible emotional toll not only because it can be financially significant, but also because it can be time-consuming in terms of the energy needed to pay bills, gather information, help with medical care and appointments and handle various day-to-day matters,” Lo writes. “Even the best-laid plans will require time and energy to implement. Preparing oneself for this mentally and setting expectations up front with other interested parties, whether it be siblings, spouse, significant others or other caregivers, would be helpful.”

Understandably, your parents will experience emotional difficulties with this change, too. Aging and admitting to new limitations can be very daunting.

“The best situation is when you have a willing party on both sides where the planning can be a collaborative process in which parents are openly sharing their wishes and information, and the children are prepared to step in and able to honor those wishes,” Lo concludes. “It’s a long journey, just as life, and the more planning you do, the more prepared you’ll be.”

Breaking News: Rajiv’s New Book is Coming Soon!

We have big news! The long-awaited book by Rajiv Nagaich, called Your Retirement: Dream or Disaster, will launch in March 2023.  As a friend of AgingOptions, you have the option to preorder now.

You’ve heard Rajiv say it repeatedly: 70 percent of retirement plans will fail. If you know someone whose retirement turned into a nightmare when they were forced into a nursing home, went broke paying for care, or became a burden to their families – and you want to make sure it doesn’t happen to you – then this book is must-read.

Through stories, examples, and personal insights, Rajiv takes us along on his journey of expanding awareness about a problem that few are willing to talk about, yet it’s one that results in millions of Americans sleepwalking their way into their worst nightmares about aging. Rajiv lays bare the shortcomings of traditional retirement planning advice, exposes the biases many professionals have about what is best for older adults, and much more.

Rajiv then offers a solution: LifePlanning, his groundbreaking approach to retirement planning. Rajiv explains the essential planning steps and, most importantly, how to develop the framework for these elements to work in concert toward your most deeply held retirement goals.

Preorder today and get a free bonus video of Master Your Future, Rajiv’s first public television special. Click here to PREORDER NOW.  And remember, Age On!

(originally reported at www.kiplinger.com)

Investopedia: Are We in a “Baby Boomer Retirement Crisis”? That Depends on Which Boomers We’re Talking About

We’ve been hearing the dire predictions for years now: Baby Boomers are heading for a looming cliff, usually referred to as a retirement crisis. With the oldest boomers now hitting 75 and the trailing edge within a few years of age 60, this huge cohort is supposedly reaching retirement age en masse at the rate of 10,000 per day.

It’s true that millions of these men and women – the first generation to navigate the world of retirement with the 401(k) – are terribly unprepared for what lies ahead. But is this a retirement crisis or not? It depends on who you ask, and also what these aging boomers expect retirement to look like.

For source material on this topic, we actually went back a year and found this article from the Investopedia website, written by reporter Barbara Friedberg. While the article is from early 2022, the issues it raises are completely relevant today. The basics: Baby Boomers are retiring in large numbers, yet many do not have enough saved for their retirement. The reasons may vary – a lack of planning, the 2008 financial crisis, as well as the chronic low interest rates since. The question becomes, now what?

As always, we asked Rajiv for his thoughts on this topic, which we’ve shared at the end. The bottom line: Rajiv says many Baby Boomers are in fact heading for a retirement crisis, but it might not be for the reason they expect.

Gloomy Picture for Many Retiring Boomers

In her Investopedia analysis, Friedberg writes, “Baby Boomers – the generation born between 1946 and 1964—are heading into retirement in droves. Along with the aging of this iconic cohort comes a lot of data concerning their lack of preparation for their later years.”  The result of all that data is bleak, she suggests: “Insufficient financial resources paint a gloomy picture for many retirees.”

The Investopedia article provides an overview to show how financially prepared – or unprepared – the Baby Boomer generation is for retirement.  Remember, these numbers are from last year, but we suspect the picture has not changed materially since then, and the underlying principles are the same as in 2022.

Insufficient Average Savings Triggers Pessimism

“Baby Boomers have an average of $152,000 saved for retirement,” Friedberg states, referencing the 19th Annual Retirement Survey of Workers conducted by the TransAmerica Center for Retirement Studies. “This is not nearly enough to last through retirement. Based on information from the Bureau of Labor Statistics, adults between ages 65 and 74 spend, on average, $48,885 a year.”

This shortfall has led most workers to feel pessimistic over their retirement prospects. According to Transamerica, 76 percent of workers overall believe that their generation will have a much harder time achieving financial security in retirement compared with their parents’ generation. For Baby Boomers, that “pessimism index” is 69 percent, but their younger counterparts feel gloomier: 79 percent of Millennials and 81 percent of Gen X respondents predict a tougher and less secure retirement.

Research by the  Insured Retirement Institute (IRI) paints a starker picture for retiring Boomers, says the article. “IRI found that 45 percent [of Boomers] have no retirement savings,” Friedberg writes. “Out of the 55 percent who do, 28 percent have less than $100,000. This suggests that approximately half of the retirees are, or will be, living off of their Social Security benefits.”

Why Baby Boomers Lack Retirement Funds

To answer the question, “How did we get here,” Friedberg hearkens back to recent history. “A key reason Boomers lack funds is the stock market decline during the Great Recession,” she writes. “This event scared many older adults out of the markets, causing them to miss the subsequent rebound. Panic selling, although understandable, decimated many retirement accounts.”

In the aftermath of the ugly recession years, the financial news stayed negative. “The following years of low interest rates drastically undermined the yields of bond funds that savers and retirees were urged to purchase,” says Friedberg. “These yields, in turn, were invested in capital that earned virtually no interest. With wages plateauing, it was difficult for most workers to ramp up savings in their final earning years.”

More recently, she adds, has been the market tumult of the past few COVID years. “The most recent blow has been the huge losses and gyrations of the stock market due to the panic selling in February and March 2020,” she states. “Even those who resisted likely took heavy hits to their assets.”  (As an update, we should add than 2022 wasn’t much better, with the S&P Index down almost 20 percent.)

Failing to Plan Means Planning to Fail

Any story about Baby Boomers and retirement has to state the obvious: many of this have-it-all generation never seemed to take retirement planning seriously. “Making all this worse is a lack of planning,” says Friedberg. She spoke with financial planner Elyse Foster, who told Investopedia, “This is the first generation to face saving for retirement on their own. I believe, early on, there was a lack of information on the importance of saving early and often. The assumption seemed to be ‘you are on your own.’”

Will those who follow behind learn a lesson from the retiring Boomers? One can hope so. “With luck,” says Friedberg, “Generation X and the Millennials will benefit from seeing the impact of not planning early. But the Boomers have to deal with it now. The switch from pensions like benefit defined plans to contribution defined plans like 401(k)s have exposed baby boomers to the capital market risk and changed the way to deal with retirement savings.”

One of the unexpected effects of the pandemic was the fact that many aging workers were forced into retirement earlier than planned. Yet most Baby Boomers remain unprepared for such an eventuality. Friedberg says only 26 percent say they have “a backup plan for retirement income if forced into retirement sooner than expected, according to the TransAmerica Center for Retirement Studies.”

Is This a Crisis? That Depends on Who You Ask

Calling this a “retirement crisis” could be misleading, the article implies. “Whether or not this can be called a crisis depends on which Boomers are being discussed, including the types of assets they can access,” writes Friedberg. “Boomers who own their own homes in an area with a lower cost of living may be able to live on quite a bit less than a rent-paying retiree in a major metropolitan area,” in spite of meager savings.

Social Security helps, but it can’t be the solution. Today, says the SSA, 90 percent of retirees receive Social Security benefits compared with 69 percent of retirees in 1962. But living on the average benefit is next to impossible. “The average Social Security benefit was $1,555 per month in 2021,” says Friedberg, “substantially less than the average wage, which was approximately $3,990, according to the Bureau of Labor Statistics.” (Note that in 2022 the average Social Security benefit had risen to $1,657, and it was expected to jump to $1,827 this year. Meanwhile the average U.S. wage in 2023 is about $4,450 for full time 40-hour workers.)

Important to Have the Right Mindset

Index fund advisor Mark Hebner told Investopedia that expectations are important in retirement. He suggests retirees short on savings should be “looking to downsize your home, moving to a more affordable state, relying on public transportation, and having a robust budget that itemizes discretionary and non-discretionary items.”

But don’t expect a champagne lifestyle on a beer budget. “The most important thing is that retirees have the right mindset about their lifestyle in retirement. This is why it is important to start making lifestyle adjustments before you retire,” says Hebner. 

The article ends on a vague note. “For those depending on Social Security benefits in their senior years, maintaining a comfortable lifestyle in retirement will likely be difficult,” warns Friedberg. “But whether Baby Boomers are in a retirement crisis depends on how you measure the situation, where they are living, and how their circumstances compare with their predecessors.”

Rajiv’s Warning: Don’t Ignore Uncovered Medical Costs!

Rajiv Nagaich of AgingOptions told us there are many aspects of this article he found helpful. “One thing I agree with,” he said,” is that you don’t have to have a lot of money to enjoy a happy retirement. As the article suggests, you need to be realistic, and adjust your lifestyle to match the reality of your finances. But I know plenty of people living very happily in retirement on a modest income – just as I know others with boatloads of money who are stressed-out and miserable because they can’t make ends meet!”

But the Investopedia article does have a huge gap. “The biggest issue I have with this article is that there’s zero mention of the danger of uncovered medical costs,” says Rajiv. “Unless you’re actively preparing for that day when the rehab nurse is telling your spouse or adult child that you can’t go home from the hospital, that you need extra care, then you’re not ready for retirement.  This is where AgingOptions can help!”

Rajiv’s advice: even if you haven’t planned for uncovered medical expenses, start planning now. “Call us,” he urges. “Attend a seminar. We can show you steps to take now so that you’ll never have to face a retirement crisis in the future. You CAN be ready!”

Breaking News: Rajiv’s New Book is Coming Soon!

We have big news! The long-awaited book by Rajiv Nagaich, called Your Retirement: Dream or Disaster, will launch in March 2023.  As a friend of AgingOptions, you have the option to preorder now.

You’ve heard Rajiv say it repeatedly: 70 percent of retirement plans will fail. If you know someone whose retirement turned into a nightmare when they were forced into a nursing home, went broke paying for care, or became a burden to their families – and you want to make sure it doesn’t happen to you – then this book is must-read.

Through stories, examples, and personal insights, Rajiv takes us along on his journey of expanding awareness about a problem that few are willing to talk about, yet it’s one that results in millions of Americans sleepwalking their way into their worst nightmares about aging. Rajiv lays bare the shortcomings of traditional retirement planning advice, exposes the biases many professionals have about what is best for older adults, and much more.

Rajiv then offers a solution: LifePlanning, his groundbreaking approach to retirement planning. Rajiv explains the essential planning steps and, most importantly, how to develop the framework for these elements to work in concert toward your most deeply held retirement goals.

Preorder today and get a free bonus video of Master Your Future, Rajiv’s first public television special. Click here to PREORDER NOW.  And remember, Age On!

(originally reported at www.investopedia.com)

Inspired by the Pandemic: Consider This Checklist as a Starting Place to Get Things in Order and Protect Your Estate

Among the lessons learned during the COVID pandemic – too often learned the hard way – is the imperative to prepare ourselves for the unexpected. Three years ago, few people could have predicted the upheaval triggered by lockdowns, illness, and, tragically, premature death.  In this 2022 article from the Kiplinger financial website, financial planner Ron Brown urges that we use the pandemic as a cautionary tale, and a trigger to get our houses in order, so to speak.

Elsewhere this week on the AgingOptions Blog, we’re featuring a sad story about yet another celebrity estate triggering a high-profile legal battle. Your estate is no doubt considerably more down to earth, but the lessons are similar. In his article, Brown offers a fairly basic checklist of important estate planning to-do items that can help you and your loved ones be better prepared for any eventuality.

Even if we never again face something as disruptive and far-reaching as the COVID pandemic – and that’s a big “if” – we think this is a good list to review with your spouse and your estate planning team (even if you’re not a celebrity).

Lesson Number One: Expect the Unexpected

“If there is a poignant reality the pandemic has taught us all,” Brown begins, “it is to expect the unexpected.” It’s no secret that the COVID-19 pandemic has thrown plenty of curveballs our way, but between disease, stock market shifts, civil unrest, the Great Resignation, and lockdowns, the last few years have shown us that we never really know what’s coming around the bend. 

“As of late February [2022],” Brown writes, “the virus has taken over 970,000 lives in the U.S. alone, which has had a heartbreaking and life-altering impact on so many families. When it comes to unexpected events, there are few more difficult than the death of a loved one, and it can become more strenuous without a comprehensive estate plan in place.” (Note that CDC data now pegs the COVID death toll in the U.S. at over 1.1 million.)

There’s no time like the present to learn about and implement the basics of estate planning. Here are Brown’s tips. 

Ensure You Have an Updated Will

As we’ve written about on this blog before, it can be easy to treat your will as a “one-and-done” task. But wills should change with your circumstances, and need to be updated periodically. “Many people are concerned about where their assets will go after they die,” Brown writes, “and it is, therefore, important to have a will…and that you update it at regular intervals.”

A will isn’t just for high-rollers, either. “Even if your planned asset division is relatively simple, a will is a necessity to protect your assets and the loved ones who will receive them,” Brown asserts. “This is also a good opportunity to inventory your assets and take full stock of what needs to be considered within your estate plan, from real estate and automobiles all the way down to items like tools and clothing.” Working with a financial planner can make this inventory process very simple, but there are also free checklists available online as a resource.

One strong note of caution: we urge you not to try to plan your estate using “one size fits all” online legal documents. You might save a bit upfront, but you can reap a harvest of huge headaches for your heirs by relying on cheap shortcuts. Not all legal document creators are alike! Good legal advice is priceless in the long run, so don’t entrust your estate plan to inexpensive, generic online documents. Consult a qualified legal professional.

Prepare a Power of Attorney for Financial Situations

A fairly well-known element of estate planning, your financial power of authority gives an individual final say on your behalf if you’re incapacitated or fall ill. “This is particularly important as it relates to being able to manage financial transactions when an individual is unable to do so. In some cases, the power of attorney may also be able to execute certain duties after one’s death, particularly if there is no estate executor,” Brown explains.

He adds, “The bottom line is that having someone you trust with power of attorney capabilities in case of incapacitation, illness or death is a good safeguard for your assets.” We’ve seen too many families face the chaotic consequences when a loved one fails to take this vital step.

We also suggest you appoint a health care power of attorney who can help guarantee that your wishes on the types of care you want to receive are carried out. Don’t leave it to chance.

Designate Beneficiaries to your Retirement Account(s)

Similarly, you should also have trusted beneficiaries—both primary and secondary—listed for your retirement accounts and insurance policies. “These beneficiary pronouncements override the will, so whoever is the estate executor will not have to figure out to whom these accounts go, nor will the accounts need to go through the costly probate process,” Brown writes.

This usually only takes a few minutes to set up or update, and is well worth the time. This is especially true if you’re divorced. You may find your money going to an ex-spouse instead of a current one simply because you never revised the beneficiary form on that old 401(k).

Understand Estate Tax Laws

“While federal estate taxes can be up to 40 percent, only the wealthiest of Americans have to worry about them,” Brown writes. These taxes can fluctuate based on which state you’re in, and the federal exemption is set to decrease in 2026.

This may not be a concern for everyone, but Brown warns, “If this is a concern for you, you can start taking actionable steps, such as giving money under the annual  gift tax exclusion.”

Indeed, generosity can save you in taxes. “For 2022,” the article states, “each person can gift up to $16,000 per recipient. For those who are married, each spouse can gift $16,000 to the same recipient, for a total of $32,000 each, and you can make gifts to as many people as you like. This is a way to diminish the exposure of your estate to taxes.” (Note that, for 2023, the gift tax exclusion has risen to $17,000 per individual or $34,000 per couple.)

Consider a Trust for Your Estate

When we think of trusts, we often think they’re only for the wealthiest among us. But trusts can be quite useful no matter who you are. “If you are aware of where you want everything to go when you die, you might want to use a trust fund,” Brown writes. “A  trust denotes how your assets will be disseminated after your death, and it allows for specificity. It also ensures that items within it avoid probate court, which can be costly for the estate. In doing this, it also ensures privacy around the specific assets and amounts, and it is harder to contest than a will.”

Don’t Forget the Details – Including Your Pet

Estate planning can be such a detailed subject that it’s easy to overlook certain elements. Don’t let your furry or feathered friends be one of them! “It’s important to include [your pets] in your estate plan, whether it is a designation of who will pay its bills, who will take care of it or where it will be placed,” Brown explains. “In fact, you can even create a  pet trust to manage your animal after you are gone.”

It’s easy to delay estate planning, assuming you’ll always have more time. But if recent years have taught us anything, it’s that our time on this earth is not guaranteed.

We’ll end with Brown’s own concluding words: “Once you have an initial estate plan in place, it will be much easier to make updates and changes as necessary. Don’t let yourself get caught off-guard by unexpected circumstances; make estate planning a priority now for you and your loved ones.” 

Breaking News: Rajiv’s New Book is Coming Soon!

We have big news! The long-awaited book by Rajiv Nagaich, called Your Retirement: Dream or Disaster, will launch in March 2023.  As a friend of AgingOptions, you have the option to preorder now.

You’ve heard Rajiv say it repeatedly: 70 percent of retirement plans will fail. If you know someone whose retirement turned into a nightmare when they were forced into a nursing home, went broke paying for care, or became a burden to their families – and you want to make sure it doesn’t happen to you – then this book is must-read.

Through stories, examples, and personal insights, Rajiv takes us along on his journey of expanding awareness about a problem that few are willing to talk about, yet it’s one that results in millions of Americans sleepwalking their way into their worst nightmares about aging. Rajiv lays bare the shortcomings of traditional retirement planning advice, exposes the biases many professionals have about what is best for older adults, and much more.

Rajiv then offers a solution: LifePlanning, his groundbreaking approach to retirement planning. Rajiv explains the essential planning steps and, most importantly, how to develop the framework for these elements to work in concert toward your most deeply held retirement goals.

Preorder today and get a free bonus video of Master Your Future, Rajiv’s first public television special. Click here to PREORDER NOW.  And remember, Age On!

(originally reported at www.kiplinger.com)

Short-staffed and Fearing a COVID Resurgence, Washington State Nursing Homes are Still In a “Crisis Mode”

It may be hard to recall that, in the memory of many Americans, the COVID pandemic seemed to begin in a Kirkland, Washington, nursing home. In early 2020, news reports began circulating about the coronavirus causing devastating illness and death among the vulnerable population in America’s long-term care facilities, beginning here in the Pacific Northwest. As the pandemic swept the country and the nation’s nursing homes went into full lockdown mode, the fearsome death toll continued. Based on recent statistics, about 140,000 of the nation’s one million COVID deaths were nursing home residents.

That means 0.5 percent of the U.S. population accounted for 14 percent of those dying from COVID-19. That’s an astounding number.

It may seem that the pandemic has largely subsided, but in fact the concern over another resurgence remains high. This time, if an outbreak were to occur, many long-term care facilities here in Washington State would find themselves dangerously short-staffed. In this recent article from the Seattle Times, staff reporter Paige Cornwell examines the condition of our state’s nursing homes and finds that, even though death rates are way down and isolation is over, many facilities are operating as if disaster is just around the corner.

A Blend of Normalcy and “Crisis Mode”

If it’s difficult for any of us to tell if the pandemic is “over”, it’s especially tough for staff and residents in nursing homes. Cornwell takes us into North Cascades Health and Rehabilitation Center in Bellingham, where the feeling of crisis mode still persists in the 122-bed facility.

“North Cascades Health and Rehabilitation Center is no longer on lockdown, so visitors can come inside and see their loved ones,” Cornwell writes. “Residents having a hard night can stay in the nurse’s station and do arts and crafts. There’s weekly coronavirus testing, and workers only have to wear surgical masks.”

But a nursing assistant at the facility, Shelly Hughes, notes a “frantic energy” that still lingers. Cornwell writes, “[Hughes] wonders: What if there’s another COVID-19 outbreak, like the brutal one they experienced this winter? With turnover so high, will there be enough staff for the week? What’s going to happen tomorrow?” These fears leave a deep, pervasive frustration felt by staff and residents alike.

Nursing Homes and Similar Facilities Hard-Hit

Cornwell paints a pretty devastating picture of the pandemic’s effect on Washington State’s 4,760 long-term care facilities: “Washington’s nursing homes, assisted-living facilities and adult family homes account for 30 percent of all COVID deaths over two years, but just 3 percent of total cases, according to the Washington State Department of Health. Because of visitor restrictions, even residents who survived the virus were still susceptible to the mental and physical effects of isolation. Workers experienced high rates of burnout amid low pay and an ongoing threat of illness.”

The relatively good news is that, thanks to steady vaccination rates, COVID cases and deaths are now “comparatively low”, although Cornwell notes that booster shot rates are increasingly sluggish among facility staff.

But the numbers are still startling. Cornwell writes, “As of mid-April, 3,779 people associated with a long-term care facility — a vast majority of them residents — had died of COVID complications, according to the DOH. There has been a total of 40,774 cases.”

Omicron Variant Caused Surge in New Cases

Cornwell credits widespread vaccinations for the significant drop in cases and deaths in January 2021 that lasted for nearly a year. Unfortunately, the omicron variant brought the numbers back up the following year, and 2022’s winter was extremely difficult for many facilities across Washington, including North Cascades Health and Rehabilitation.

The North Cascades outbreak—which included the deaths of several residents—was traced to a visitor. Nursing assistant Hughes said, “That was really brutal. It was as horrible as I’d imagined it would be.”

Thankfully, March of this year marked a turning point, and there have been fewer than 100 new cases and 10 new deaths associated with nursing homes reported per week. But while the number of cases has lessened, the “epidemic” of short staffing remains.

Percent of Short-Staff Facilities Tripled During Pandemic

Staffing shortages have become an increasing problem, between workers contracting COVID and needing to stay home, as well as complete burnout from long hours during the peak of the pandemic. Cornwell writes, “The omicron spike also forced many workers to stay home, causing widespread staffing shortages. The staffing situation in nursing homes has stabilized since the peak, but remains an issue at facilities throughout the state.”

The official numbers are worrying: “About half of the state’s nursing homes report being short staffed, according to CMS [Centers for Medicare and Medicaid Services] data, approximately three times more than the number reporting low staffing levels near the start of the pandemic.”

Patricia Hunter, ombudsman of the state’s long-term care facilities, hears constant complaints about safety concerns and poor-quality care linked to short staffing. “I’ve heard from nursing home staff who have been doing this work for many years that the quality of care and staffing levels are the worst they have seen in their long careers,” she said. “They say that staffing has always been bad but now it is so very bad.”

Vaccination Rates Exceed National Averages

Helping to keep further surges at bay, vaccination rates are steady. Cornwell writes, “In nursing homes, vaccination rates among residents and workers are higher than the national percentage, though the booster rate lags among workers. Among residents, 90 percent are fully vaccinated, compared with 88 percent nationally, according to CMS, which counts a person as fully vaccinated two or more weeks after they’ve received a two-dose Pfizer or Moderna vaccine or the one-dose Johnson & Johnson vaccine.”

She adds, “Among Washington’s nursing home staff, who are required to be fully vaccinated but not required to be boosted, 92 percent have received their shots, compared with 87 percent nationally. All residents and workers are eligible to receive booster shots, but 83 percent of residents and 47 percent of workers have done so.”

The fervent hope is that the worst is well and truly over for Washington’s long-term care facility residents, staff, and families. To keep this hope alive, CMS encourages everyone to consider further vaccination and boosters to keep us all as safe as possible, especially those most vulnerable. 

My Life, My Plan, My Way: Get Started on the Path to Retirement Success

At AgingOptions we believe the key to a secure retirement is the right retirement plan – yet statistics show that 70 percent of retirement plans fail. That’s why for nearly two decades we’ve been dedicated to the proposition that a carefully-crafted, fully comprehensive retirement plan is the best answer to virtually any contingency life may throw your way as you age.  Our slogan says it all: My Life, My Plan, My Way.

When it comes to retirement planning, most people focus on one fairly narrow issue: money. Financial planning is an important component of retirement planning. However, people heading towards retirement often make the mistake of thinking that a little financial planning is all that’s required, when in fact most financial plans are woefully inadequate. What about your medical coverage? What if you have to make a change in your housing status – will that knock your financial plan off course? Are you adequately prepared legally for the realities of retirement and estate planning? And is your family equipped to support your plans for the future as you age?

The best way we know of to successfully blend all these elements together – finance, medical, housing, legal and family – is with a LifePlan from AgingOptions. Thousands of people have discovered the power of LifePlanning and we encourage you to the same. Simply visit our website and discover a world of retirement planning resources.  Make certain your retirement planning is truly comprehensive and complete with an AgingOptions LifePlan.  Age on!

(originally reported at www.seattletimes.com)

Many Seniors Discover That Retirement Can Be Hazardous to Their Health – Mental Health, That Is!

Retirement is typically pictured as a sort of idyllic existence. After decades of the daily grind, you finally put down the briefcase or the tool belt and pick up the golf clubs, tennis racket, and sun screen for years of carefree bliss. Well…that might be the situation for some. But if you’re a regular reader of the AgingOptions blog or a regular listener to Rajiv Nagaich on the radio – or hopefully both – you know that retirement just isn’t like that for the great majority. Certainly, it can be a wonderful and rewarding time of life, but no matter what your circumstances, retirement demands preparation. What’s more, much of that preparation is mental and emotional.

We like columnist Liz Weston, a regular writer for NerdWallet.  In her most recent column which we just read in the pages of the Seattle Times, Weston deals with the need to prepare emotionally for retirement. She offers a warning: for those who fail to do so, retirement can actually be hazardous to one’s health.

Facing a Loss of Meaning and Purpose

Weston begins her article with the tragic story of Ohio resident Pamela Hixon, who had been looking forward to retirement with great excitement, but was not prepared for the toll it would take on her mental health. “Soon after she quit,” Weston writes, “[…] Hixon spiraled into depression and anxiety. She sought help from counselors and her pastor, but it wasn’t enough. Six months after retiring, she took her own life.”

Hixon’s family members attribute her sad story to a perceived loss of purpose, significance, and meaning after her career ended. Her son, Tony Hixon, grappled with his mother’s story in his own life, processed it through writing, and emerged with a book to help others through the same season: Retirement Stepping Stones: Find Meaning, Live with Purpose, and Leave a Legacy. It’s a hopeful ending to a sorrowful tale, but one that requires our careful attention.

Most Retirees are Content – but Not All

According to research, depression in retirement isn’t overly common for the majority. For many, retirement is generally a happier, more contented season of life. Brent Forester, president of the American Association for Geriatric Psychiatry, says, encouragingly, “Older adults are less likely than younger people to experience major depression.”

But Forester does add, “[…] retirement often involves significant losses — of identity, purpose, structure and social contacts — that can trigger depression and other psychiatric illnesses.” In other words, “Getting depressed is not a normal part of aging. But one of the risk factors (for depression) is loss, and the loss of one’s professional identity, the loss of one’s job, is a big one.”

Disappearing Social Network, Growing Isolation

Forester notes that one of the major indicators that depression may develop after retirement is when people are too busy before they retire to make connections with other people, building a social and emotional framework to lean on during the retirement years. “Their social networks can disappear if they primarily made friends through work, or they move to a new community after retirement,” he says.

Being socially isolated and lonely is a huge risk factor for not only depression but other health problems as well. It can lead to unhealthy behaviors like increased substance abuse, or even spiraling negative thoughts about personal worth and meaning that can lead to a feeling of emptiness, without anyone else to bounce these ideas off of.

Tony Hixon, mindful of his mother’s story, is especially wary of this navel-gazing. “People also have time to think about bigger questions of purpose and meaning,” he says. “The age-old question of ‘why am I here?’ can get crowded out by being busy. Upon retirement, you do have time, and that question can sometimes plague a person.”

Retirement: A Transition, not a Destination

Worklife can be stressful, but Weston cautions, “People may be so desperate to get away from workplace stressors — a bad boss, a too-heavy workload, a rigid schedule — that they don’t fully consider the benefits they get from working.” This can lead people to be so eager to retire that they don’t think about what a healthy retirement should be on a day-to-day level, and what a life without work really means.

Boston psychologist and retirement coach Dorian Mintzer says, “Retirement is a transition, not a destination. It’s very helpful to think about ‘what are you retiring to?’” Part of that transition could include part-time work. “Reducing the hours you work can help alleviate burnout while allowing you more free time,” Mintzer says.

But regardless of whether you transition out of work slowly or quickly, Mintzer encourages deep consideration of what could offer you “a sense of connection, engagement, purpose, and meaning” after you retire, including hobbies, spending more time with family, or engaging in the community through volunteer work.

What fills you with joy? To help you figure out what fills you up or what you might want to learn, Mintzer poses: “What are some of the things you had to put on the back burner when you were younger?”

And no matter what, don’t be afraid to reach out to a friend, family member, therapist, pastor, or other support system if you feel alone. “Get support from people,” Mintzer says. “Don’t be afraid to ask for help.”

Finding the Help You Need

Weston is aware that many people don’t choose when to retire; it’s forced upon them for various reasons including job loss, health issues, or even the pandemic. “People who retire involuntarily are often less satisfied with their lives and suffer from worse mental health than those who retire voluntarily,” she says, and adds, “People experiencing financial strains — a common result of unexpected retirement — may be more vulnerable to depression and other mental health problems.”

But the signs and symptoms of mental health issues may show up differently in older adults, making it a bit harder to spot. Forester explains, “Rather than feeling sadness, for example, depressed older people may feel numb or anxious, have difficulty with memory or decisions, or suffer from otherwise unexplained physical complaints.”

Not sure where to begin with your mental health? Start by talking to your regular physician. “Depression and other mental health problems are medical conditions that typically can be treated with medication and therapy,” Weston says. “If you’re concerned about a loved one, encourage them to seek medical treatment and to follow their treatment plan. You may need to help them make the initial appointments or accompany them to treatment, since lack of motivation and energy are common symptoms of depression.”

Weston ends her article by including the number for the National Suicide Prevention Lifeline (800-273-8255), which is available for anyone who needs help, information, or even just to talk.

She advises that creating a retirement plan—covering your social, financial, and emotional health—before retirement begins can work wonders for facing your retirement years with joy and excitement. And we would definitely agree! The more you can plan, the less likely you are to feel lost.

Mintzer’s quote at the end of the article sums up our thoughts well: “Just the act of planning can help you feel more in control and less anxious.”

My Life, My Plan, My Way: Get Started on the Path to Retirement Success

At AgingOptions we believe the key to a secure retirement is the right retirement plan – yet statistics show that 70 percent of retirement plans fail. That’s why for nearly two decades we’ve been dedicated to the proposition that a carefully-crafted, fully comprehensive retirement plan is the best answer to virtually any contingency life may throw your way as you age.  Our slogan says it all: My Life, My Plan, My Way.

When it comes to retirement planning, most people focus on one fairly narrow issue: money. Financial planning is an important component of retirement planning. However, people heading towards retirement often make the mistake of thinking that a little financial planning is all that’s required, when in fact most financial plans are woefully inadequate. What about your medical coverage? What if you have to make a change in your housing status – will that knock your financial plan off course? Are you adequately prepared legally for the realities of retirement and estate planning? And is your family equipped to support your plans for the future as you age?

The best way we know of to successfully blend all these elements together – finance, medical, housing, legal and family – is with a LifePlan from AgingOptions. Thousands of people have discovered the power of LifePlanning and we encourage you to the same. Simply visit our website and discover a world of retirement planning resources.  Make certain your retirement planning is truly comprehensive and complete with an AgingOptions LifePlan.  Age on!

(originally reported at www.seattletimes.com)