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Boomer Retirement - What Does It Look Like?

According to AARP, about 10,000 Boomers will turn 65 today. And this will continue daily for the next 11 years.  The term Boomers refers to those who were born between 1946 and 1964. There was a huge increase in births following WWII when the GI’s returned home.

Many of those boomers are or plan to work well past age 65. This is if their health allows them to. There are about 77 million baby boomers living in the United States. There are huge concerns over the drain it will put on our social security and Medicare systems.

Saving Social Security Is A Top Priority

A Recent Pew Research study found that two-thirds of Baby Boomers think preserving Social Security and Medicare for themselves and future generations is even more important than reducing the deficit. Another survey by National Academy of Social Insurance discovered that Boomers, regardless of political and economic means say they would gladly pay higher Social Security taxes to fix the program's funding issues.

And with the cost of health care continuing to rise many boomers do not feel that retirement is an option. Medicare does not cover all costs and supplement plans are continuing to rise. Furthermore, additional assistance that may be needed, like home care, assisted living or skilled nursing is not covered.

 “I will probably need to work until I just drop dead.” Says Doug “We saw what happened with my mother and my mother in law. Both needed around the clock care for years. It was very expensive!”

And he is not alone. But the truth is no- one really knows what the future will bring. Many boomers who plan to work until 70 or beyond find those plans are changed by unexpected events.

When the Unexpected Happens

A stroke at age 63 caused Kathryn’s dad to have to start social security payments before he had planned. Taking early payments means you will have a lower payment for the rest of your life. In this situation, there really wasn’t a choice.

Paul was laid off from his job at age 64. He was really hoping to work until at least 70.  His daughter and two children had moved in the year before. Paul had a lot of people counting on his help. Getting a job at that age is not easy. He decided, reluctantly to take SS benefits early. Again, sometimes things may be out of your control

This Generation Has an Entrepreneurial Spirit

The good news is that the boomers, for the most part, are very entrepreneurial. They are also very resilient. When Kathryn’s dad lost his business after his stroke it didn’t stop him. Having been a real estate developer for many years he reached out to business associates.

As such he was able to get a part-time job doing real estate appraisal work. It supplemented his social security check allowing him to live more comfortably and to also put some aside for the future when he would no longer be able to work. And he ended up being able to work like this for 10 more years!

Part Time Opportunities Abound

The internet has opened the doors for a lot of part-time or work from home opportunities. And boomers are signing up in droves to learn new skills. Many are using their life experiences to become Life and Business Coaches and help the younger generations.

“Being able to work from home and use the skills I have developed over my lifetime is like a dream come true. I am not ready to retire!  I still have a lot to give to the world.”

Finding Work You Love Doesn’t Feel Like Work At All

senior walking dog

Mary signed up on a website called Rover.com They match her with people who need pet walking and pet sitting services.

“It’s the perfect match! I love animals! With this service, they do the marketing for me and I am able to set my own hours and prices. I was planning on retiring from my main job and taking SS at 65. But with the income, I am able to generate from Rover I am rethinking my plan.”

Mary has now decided to retire from her full-time job at 65. She will offer her pet services full time and plans to draw Social Security when she turns 70. At that time, she will have a business that she can either sell or work part-time. And she will get a higher social security check for the rest of her life.

Retiring Abroad

 

Overall, many boomers did not plan well for their retirement years. Not surprisingly, a number of US citizens have decided to retire in other countries where their dollars will stretch farther. Bill decided to try San Miguel de Allende, Mexico about 10 years ago.

“It was the best choice I ever made.” Said Bill “I can live so much better here than I could in the United States. The healthcare is excellent too and I can even afford to go to the dentist” he joked.

 

In fact, according to International Living,  private healthcare insurance will cost you about a quarter of what it would in the United States.

Furthermore, he told me he is able to have a housekeeper 3 days a week for $24 per week. She stays all day, cooks, grocery shops, cleans and does laundry.

” I can spend my days visiting with friends, painting ( he is an artist) and playing golf.”

But Is It Safe?

Bill reports feeling very safe in Mexico. “It is just like in the United States,” Bill Said “There are places in the big cities that you do not go into. When I lived in Houston I knew to avoid certain areas. And with all of the mass shootings that have been happening in the United States, there are a lot of places back home I would avoid.”

Other Popular Retirement Destinations

Many Boomers are also heading to Ecuador, Costa Rica, and Panama. See the Forbes Top 10 International Places to Retire in 2018.

But this may not be for everyone. Moving to another country may seem exotic and exciting. But that excitement can wear off quickly. Transplants suddenly realize they are “not in Kansas anymore.”

Adjusting to Your New Home

There will be a sharp adjustment period. You will have to get used to local customs. And if you plan to stay you will need to embrace these customs. The foods you are used to buying may not be available at your local grocery store.

Moving to an area that has a large Expat community from the US will help. Get involved with the community. Stop complaining about the differences and what you don’t like. Instead celebrate the reasons you choose this location (great weather, the beach, low cost of living, etc.)

Leaving family and friends behind can also be hard. Invite them to come for a visit. And know that many of them will not. Everyone does not embrace your sense of adventure. Plan to video chat with friends back home. But take the time to make new friends. All of the expats living there have experienced the same challenges you are now facing. If they have lived there a while chances are they know a thing or two. These people can help you enjoy your new life and avoid a few pitfalls along the way.

Yes! You Still Have to Pay Taxes

And don’t think you can skip out on taxes just because you live overseas. As long as you are still a US Citizen you are expected to pay taxes. If you live abroad for 330 or more days in 2017 and earn under $102,100, you may not have to pay taxes.  But take heed, this exemption is not automatic and you must apply for the exclusion. Know the rules and follow them.

What About Medicare?

Though Medicare will not cover you in your new country it is still wise to have it. Sign up for Medicare Part A (hospital coverage) because it is free.  If there is any possibility that you may move back to the US or you plan to travel home for extended periods you will want to have Medicare Part B, which covers doctor visits and outpatient care. Healthcare is so much less expensive in other countries so do not expect that you will have to run back and forth to the US for quality care.

Retirement looks Different

The truth is retirement looks very different than it did for their parents. Boomers are embracing the challenges and proving to be a resilient group. How will you spend your retirement years?

Kathryn Watson
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