By Marcia Mantell, RMA
For some 42 million younger baby boomers (those born between 1955 and 1965), the last 8 months of COVID-19 have been a different kind of unusual. In fact, for those of us closing in on retirement, this unplanned time in quarantine has delivered an unexpected silver lining: the opportunity to practice retirement.
Many of us are back to where we started: DINKs – dual income, no kids. Unlike younger folks, we are not grappling with the daily drama of kids having Zoom-school or in-classroom learning. We aren’t juggling home schooling with our demanding jobs. And, while we’re wearing masks and social distancing, we’re not in the most vulnerable older group who have to be extra cautious.
Instead, we’ve been given a unique opportunity that was unimaginable as we rang in New Year 2020. We are not unscathed by this virus. In fact, we are very concerned about keeping our jobs as companies announce layoffs nearly every day. And, we know we’re vulnerable to finding a new job at this age. But, on the bright side, as time slowed down, we a glimpse into what living in retirement is really all about.
So, what have these near-retirees discovered about retirement? Are they thinking differently? How has this pandemic exposed some retirement realities? Talking to several people within just a few years of retirement, here are 8 insights they share about future retirement:
1. You really will have more time on your hands. What the heck to do with it?
During the first months of the quarantine, new-found time was spent on the couch, clicker in hand. Because there was no easing into quarantine, many of us were shell-shocked. We might be saving hours of commuting time, but we’re at a loss for how to productively fill these new “free” hours each day. Sounds like retirement, doesn’t it?
For many DINKs, work still filled a large part of the day. However, working from home gave us a glimpse into retirement. “The line between personal time and work time became very blurred,” Julie Perry from Minnesota shared. “And, I’m much more connected to my phone than ever before, at all hours of the day and night.”
Setting some boundaries proved to be a challenge, but having more flexibility was a bonus. It was helpful to make “rules” to provide some structure: TV on only after 5 p.m. Take a break at noon for lunch. Go for a walk at 10 a.m.
Having so much more time and flexibility seems great, until you have it. You quickly see that you have to learn how to use it well.
2. You need to evolve with technology, like it or not.
Skype, Zoom, Facetime and other video technology was simply a convenience way back in January. By April, it was a necessity for almost every aspect of daily life. But, not all of us pre-retirees were completely savvy with our technology. COVID made it abundantly clear that we were all going to have to evolve with our tech knowledge, like it or not. Technology is not just for shopping anymore. It was time to learn how to get into Netflix. Time to buy a microphone that worked. And, past time to invest in a smart phone. Flip phones simply won’t cut it today, or in our upcoming retirement years.
3. Working from home is not ideal in many cases, but may be a new option for phasing in retirement.
Back to Julie Perry, who is a co-owner of a small construction business. They were deemed an essential business and have remained open. Fortunately, her role is one that can be done from home. But it takes much more time to get routine tasks done because she’s not in the office. “So much of my business is face-to-face. I’m the only one working from home, so it’s not like we’re all on Zoom, like at bigger companies. It’s been challenging to stay in-the-know when I’m here and they’re there.”
However, she has found a silver lining to this experiment: working from home may be a more serious option for companies to embrace phased retirement. Julie has been working in her industry for 35 years. She has a tremendous amount of knowledge and history. Small businesses can’t afford to lose that kind of intellectual capital overnight. “We can see how a gradual ease into retirement while leveraging employee expertise can be so important to a business’s survival. And, the employee doesn’t have to go cold-turkey on the paycheck.”
4. You have to mentally prepare for your lifetime of savings to take on a new role.
“I’ve been spending time laying out my numbers on a columnar pad,” William Perry (Julie’s husband) shares with me. “When you are this close to retirement, you’ve got to look at how and when to turn your various financial spigots on. It is such a complex idea that it’s like trying to put together a 3-D puzzle.”
Saving and investing is something most pre-retirees are quite familiar with. And, many have a lot of different account types that they’ve accumulated over the years. With retirement right around the corner, it became apparent that Bill was going to have to figure out how to make each pot of money as efficient as possible. It has to kick off maximum income. “You quickly realize that you are literally making hundred-thousand-dollar decisions,” he adds. “Getting it wrong is not an option.”
Bill had been self-employed for 20 years and worked in corporations for another 20, so he has a wide-range of accounts, including a pension, a 401(k) and a 403(b), a variable deferred annuity, rental property, IRAs, and so on. “It’s really interesting to look at all the choices you have to make and balance how much you’ll need to live on with minimizing taxes along the way.”
5. You’ll spend more money when you have more time on your hands.
Say “yes” to the stress! We near-retirees find that with a lot more time on our hands, and in a high-stress situation, shopping becomes a distraction and a filler of time. Michele Fonicello of Connecticut laughs as she shares her story, “Last night, I was in my comfy chair, glass of wine on the table, in front of the TV with my phone in my hand. ‘Oh, what can I find on Amazon that I can buy right now?’” She was looking for instant gratification after a long day of Zoom meetings.
“The beauty of this shopping experience is that I no longer have to be dressed up or even showered! And, my credit card is built right into the app! I can see this is a potential problem when I do retire,” Michele concludes.
And, how about those projects on the honey-do list that finally got addressed? But first, several trips and hundreds of dollars spent at Home Depot and Lowes. Did you decide this was the year to build an enormous raised bed garden and order dump truck loads of special growing soil? Hundreds of dollars of plants later, let’s hope those tomatoes were worth it.
Before this “practicing retirement” opportunity, spending more was not universally understood. Any question to that now?
6. Travel remains a top priority.
For Rosie Zaloum Foster in New York, the COVID-19 era brought the importance of travel into focus. “Being in quarantine and not able to just hop on a plane or drive to a new place reinforced my feeling that I have to travel as much as I can, when I can, and within my means.”
Near-retirees frequently put travel at or near the top of their retirement priorities. Many had to cancel vacation and travel plans during these 8 months, and this year’s holiday travel is not looking promising.
“I’ve always looked forward to the idea of traveling freely during my retirement years, but this pandemic has taken away our ability to do that now. I am grateful for all of the places I’ve already been and now more eager than ever to visit the ones still on my list,” Rosie added.
7. Retiring early looks great – but is it?
Jean Reynolds, a career nurse in Michigan, had planned her early retirement for this year, before COVID struck. “My husband is 11 years older than I am and is retired. We recognize that there are only so many more years to enjoy together.” Time can be a more critical factor when there is a big age difference to consider.
They felt financially prepared for her to retire early. Their investments were on track, plus she had accrued months of vacation and sick time. Since she worked for the county, she would be eligible for a pension and Social Security, plus she had some health insurance benefits available.
They were excited to get a jump start on retirement. “Our girls are grown and gone. Our older daughter is newly engaged and we are planning her wedding. My husband and I have travel plans.”
But, retiring during a pandemic came with some guilt. “Like all of us, I was working a ton of overtime after COVID hit my area. It was very difficult to work, and even more difficult to retire. I feel like I’ve left my coworkers on the battlefield.”
Entering retirement is not always an easy transition. Especially during a health crisis. Jean notes, “Retirement certainly isn’t starting out as we thought it would. It’s helpful to know I can always go back to work in some capacity.”
8. Bacon Makes Everything Taste Better.
During my practice run at retirement, I’ve come to terms with just how many more dinners I’m going to be making. To date, I’ve got 13,500 dinners under my belt. Assuming we’ll be hanging around for another few decades, that’s another 13,500 dinners in my future.
With more time available, it’s easier to experiment in the kitchen. I watch a lot of cooking shows and have ready access to cookbooks and online recipes. It does indeed seem that the secret to all good cooking really is bacon.
I’ve made breakfast quiche with bacon, BLTs for lunch, and bacon shows up on burgers, pizza, and wrapped around scallops for dinner. Next experiment has to be a bacon dessert. It seems a must-have ingredient in Chopped dessert baskets, so why not give it a try.
What’s your silver lining?
The climb we’ve taken to get near retirement was a series of adventures, opportunities, and trial-and-error. A global pandemic was surely never a consideration. But, as we’re all in together, let’s look for more silver linings. Hopefully, this is a once-in-a lifetime opportunity allowing a small segment of baby boomers to practice before making the leap into retirement.
About the author: Marcia Mantell, RMA®
Marcia Mantell is the founder and president of Mantell Retirement Consulting, Inc., a retirement business development, marketing & communications, and education company supporting the financial services industry, advisors, and their clients. She is the author of "What’s the Deal with Retirement Planning for Women?" and the newly published "What’s the Deal with Social Security for Women?" and blogs at BoomerRetirementBriefs.com.