The New Retirement Journey
Today's retirees are easing gracefully into the golden years
On paper, Tony Kapsak has every reason to worry. The Longwood, Fla., telecommunications project manager is about to turn 57 and hopes to retire in five years. But his 401(k) is only half of what it was at the start of the bear market. And he works in an industry that continues to slash jobs, meaning retirement could come even sooner than Kapsak wants.
Still, he takes some comfort in knowing that his wife, Pat, went through an unexpected retirement of her own from her job at a doctor's office three years ago, after suffering a heart attack, and the family "learned to adjust." Should Tony's retirement come sooner than planned, "we'll focus on reducing our expenses, and we'll readjust."
That sense of rolling with the punches is one familiar to many retirees and those nearing retirement today, as a brutal bear market has slashed their investment portfolios while record-low interest rates have cut into the earnings of those dependent on a fixed income stream. Meanwhile, a moribund economy is causing more layoffs among those reaching their peak earnings--often in their last decade before retirement. Then there's the ever escalating cost of healthcare and prescription drugs, in particular, for which many retirees have no insurance.
To counter these shocks, many dual-income households are staggering their retirements and cutting back on spending. They're adjusting the lofty expectations they had in the roaring '90s of retiring early and lazing by the links or floating along an idle backwater. For some, it's a choice that allows them to ease into this new world. For others, it's a necessity, as baby boomers confront the reality of salting away money for retirement while finding the cash for their kids' college tuition. "In a world with two-income households, where two nest eggs have been hit, some couples are starting to say, `Let's do this in phases,' " says Bill Arnone, national director for employee financial education at Ernst & Young.
But--and here's the good news--retiring in stages offers its own rewards. "Retirement used to be viewed as a single event, with the husband, who's worked 30 years for the same company, quitting his job and getting a pension. Today, the whole ballgame has changed," says Terry Crystal, 70, of west Los Angeles, who recently retired from a high school teaching job. He now helps his wife, Sharon, 67, run her small business, which makes clothes for renaissance fairs. "I'm her gofer," says Crystal, who spends the rest of his time gardening, meeting friends, and "not answering to bells or clocks anymore."
The active life. This concept of couples' not retiring in lockstep isn't just turning the whole notion of the golden ages on its head--is a household technically retired if one spouse is still working full time?--it is easing some of the emotional uncertainties surrounding this phase of life, especially for older baby boomers like the Kapsaks.
Tony, for instance, says he has learned a lot by watching Pat, 53, develop a busy schedule of church activities, quilting classes, swimming, and tai chi. "I want to make sure I'm prepared to find my own outside interests," he says. For her part, Pat says she's not sure how Tony "will take to puttering around the house. But he enjoys cooking, he loves gardening, he loves his orchids and roses--if we can find the time and place for those things, he'll be fine."
advertisement
