65 Is Not a Magic Number

Is retirement really all it's cracked up to be? The answer depends on where you find yourself financially, emotionally, and health-wise come age 65 or so.

When we're young, we trade time for money and hope to stash away enough of it to later reverse the process and trade money for time. Ideally, we'd each have a few decades of independence before the grim reaper—or assisted living facility—comes knocking.

The statistics published on the Social Security website note that: "A man reaching age 65 today can expect to live, on average, until age 84. A woman turning age 65 today can expect to live, on average, until age 86."

Should you retire at age 65? What's so magic about age 65 anyway? Nothing! It was the retirement age the government used when setting up Social Security in the 1930s. Since then Social Security's full retirement age has moved to 68 to compensate for increasing life expectancies. Should Washington get serious about fixing Social Security, the age is likely to be pushed back further.

Keep age in perspective. It's only one barometer; there are other factors much more important for deciding if and when to retire. Poor health may make the decision for you. But if you're healthy, the most important factor is whether you have enough acorns stashed away to support yourself and your spouse for the rest of your lives. When you run the numbers—there are countless financial calculators available for doing just that—be optimistic and assume you'll live long past age 84 or 86.

If you do have enough to make it and you enjoy your job, consider working a few extra years. That extra money is icing on the cake. Think of it this way: if you're lucky enough to be healthy and vital at age 95, you don't want to find yourself wishing for a bout of pneumonia because you've run out of money.

Once you've jumped over the financial hurdle, it doesn't mean you have to or even ought to retire. Quite the contrary! Now you're ready to do work or projects that fit your terms. If you love your job, are having fun, and see nothing else you'd rather do, just keep on enjoying it.

Personally, the wealthiest friend I have—now age 73—could have retired before he was 50, and he's still working. When I discuss retirement with him, he makes it clear that boredom is the biggest enemy of retirees. He loves the challenges of the business world and feels it keeps him going.

On the flip side, I have a doctor friend in his 40s who's unhappy with the state of the healthcare system here in the US. He has plenty of money and plans to give up his practice and move back to the family farm. He also mentioned that being on call and working weekends robbed him of too much time with family. He has several children and wants to be a more integral part of their lives. He no longer wants to work in an environment he does not enjoy, and trading more of his time for wealth is no longer a necessity for him.

Here are some questions to ask yourself:

• Is there anything else I would rather be doing?
• Do I enjoy the environment I'm working in?
• Am I accomplishing something other than just earning a paycheck?
• Do I enjoy the people I work with, or am I just putting up with them?
• Do I feel I am missing something?
• Is my spouse on board, or does he/she feel my working is prohibiting us from doing too many other things?
• Do I have other hobbies I enjoy that I could turn into a part-time business I would enjoy?
• Do we currently live where we want to live?
• Am I just tired of the rat race and want a change?

When I was in my late 50s, I asked a friend how you know when you're ready to retire. He grinned and simply said, "You'll know." He was right.

Matching Wants with Financial Ability

A happy retirement means you have enough to money to quit working and live the lifestyle you want—for most people that does not mean microwave dinners in front of the television.

Sad to say, we have a few old friends who made the mistake of not saving. They discovered you cannot live very well on Social Security alone. They are all back to work at low-paying jobs, and their time choices are subordinated to their work schedules. That's far from the dream of enjoying your golden years.

Helpful Hints

What kind of lifestyle do you want? It may take some compromises to mesh your dream with reality. We have several friends who live in doublewide mobile homes in 55-plus gated communities here in Florida. The communities have clubhouses, golf courses, community pools—most anything you would want. If you look at the calendars on their refrigerators, you realize their biggest challenge is finding time to schedule all the fun things they want to do.

Many of our friends in these communities were very successful and have plenty of money. They've decided to downsize economically so they have money for trips, cruises, time for family, friends and most of all, no money stresses. They are truly enjoying their golden years and don't feel like they're missing a thing.

I asked them if they want any do-overs. The most common answer was wishing they'd moved there five years before they retired instead of waiting. They would have been a bit better off financially, and they could have built up their network of retired friends sooner. Many admitted to initial reluctance about retirement and said that had they known it would be this much fun, it would have made the transition much easier.

Family also plays a key role in retirement decisions. Being part of your grandchildren's lives often means spending most major holidays in your children's homes, watching the next generation build their family traditions. It seems more grandmas and grandpas are traveling over the river and through the woods, to their children's house they go.

We have fed 20-plus on many holidays. Just showing up and enjoying a meal has some advantages. Seeing the next generation handle the family gatherings has helped me realize the family will continue on just fine for many years to come.

On that note, proximity to family has a wide range of implications. As we age, some children feel it's easier to keep an eye on us if we live nearby. Others want grandparents far enough away to ensure they stay independent as long as they possibly can.

We have friends who pick up the grandchildren from school every day and are taking a major role in raising the next generation. Other friends say they want no part of that; raising children is their parents' job. They much prefer to be grandparents and not recycled parents. Whatever floats your boat and works for your family is the right way to go.

The Biggie

Once you've experienced the exhilaration of true freedom and independence from a full-time job—doing what you want, when you want—you never want to go back. Never again do you want to financially depend on anyone.

My wife Jo loves to share this experience as a good example. We were traveling in our motorhome from point A to point B and ended up in Cheyenne, Wyoming for the night. As I looked at all the brochures in the campground office I said to Jo, "This looks like a cool place." We stayed a week and had a blast. As we left she said, "Ten years ago you would have never done that." She was right. Retirement changes your mindset.

What is retiring on your own terms? It's being financially able to approach a state of mind where your time is your own. You and your spouse can do the fun things you want to, whether that's planning a long trip or making spur-of-the-moment decisions because you feel like it.

We have friends who go on cruises, but they wait for the deals on ships that depart in less than a month. They're having a ball. For them, a long-term plan is a couple of weeks away, and they like it that way.

The peace of mind that you can "keep on keeping on" as long as your health allows is what enjoying your golden years truly means.