Your retirement will be very different from what your parents experienced.
Many people travel in the early part of retirement, then slow down as they get older. (Morsa Images/Getty Images)
Retirement has changed a lot in recent years, and may be far different from what you expect. You might spend two or more decades in retirement, and you will be responsible for paying your bills and setting up a fulfilling lifestyle. Here are ten truths about today's retirement:
- This is not your father's retirement.The days of the 40-year career with the same company are gone. The gold watch is gone. In many cases, the pension is gone as well, or was converted to a self-managed IRA or 401(k) plan. The first truth of retirement is that we are responsible for our own finances.
- You'll probably live longer than your parents.The average life expectancy for a 65-year-old is 19 years, and many of us will live another 25 or 30 years. The good news: We have more opportunities to pursue new dreams, reinvent ourselves or just bask in the glow of a well-lived life. The bad news: You have to pay for it.
- Medicare does not cover all your health care costs. Medicare is the government health insurance program for people age 65 and over. The program covers a lot of the services older people require, but you also need supplemental insurance to help pay doctor's bills, prescription costs and dental expenses. And even supplemental insurance doesn't pay for everything, especially when it comes to hearing aids, eyeglasses and a host of other age-related health expenses.
- You need to take care of yourself.Retirement is the time when all the bad habits of your youth come home to roost. But it's not too late to give up smoking, start eating right and begin an appropriate sports or exercise program. A healthy diet and regular exercise routine are the key factors for keeping our bodies running smoothly and painlessly into our 70s and 80s.
- You still have to plan for the future.Retirement is not a constant. There are many stages of retirement, from an active early retirement to perhaps needing personal care for daily needs later in retirement. So think about your living quarters, and whether you want to still be climbing stairs or taking care of a yard a decade from now. Consider long-term care arrangements for your later years. Plan your investments not just for the next few years, but for a longer span of time that may involve periods of inflation or another recession.
- There's more to retirement than money.You can have all the retirement funds in the world and still be bored, lonely and frustrated. Conversely, you don't need a huge retirement portfolio if you're ready to make some major lifestyle changes, such as living abroad, sharing living quarters or doing something unconventional that you find exciting, creative or fulfilling. In retirement, even more so than in your younger years, money is not an end in itself, but a resource to help accomplish the things you want to do.
- Time is of the essence.The retirement paradox is that we are more aware that time is ultimately limited, yet we have more time now because our days are not crammed full of work or family responsibilities. So there's no room left for procrastination. If you have a dream, now is the time to pursue it, whether it's traveling to the seven wonders of the world, finding a peaceful spot on a far-flung beach, starting your own business or reconnecting with children and grandchildren.
- There's no time for regret.None of us have come this far in life without making a few mistakes. Don't let them haunt you. The past is over and done with. There's nothing you can do about it now. Just accept what happened and let it go.
- Talk to your loved ones about end-of-life decisions.It's not a pleasant task, but it needs to be done. Most experts recommend a health care proxy so someone else can make crucial medical decisions if you are incapacitated. A power of attorney allows someone else to use your money to pay your bills. And a will directs what will happen to your leftover assets when you die. It's better that you make that decision rather than let the government do it for you.
- You are responsible for your own retirement.You will need to find a way to pay your bills without income from working in retirement. Beyond that, perhaps for the first time, you are now in charge of your own life. You no longer answer to a boss and are no longer tied down by family responsibilities. And so the most important truth of all is that the retirement you get is the retirement you've prepared for. Retirement is, literally, a once-in-a-lifetime opportunity. So go ahead and make the most of it.
Tom Sightings is the author of "You Only Retire Once" and blogs at Sightings at 60.