Boomers' Secrets of a Successful Retirement

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By Maryalene LaPonsie

It's been four years since the oldest members of the baby boomer generation turned 65, and according to AARP, approximately 8,000 boomers a day will hit this milestone in the next 14 years. In late 2014, Ameriprise Financial (AMP) surveyed 1,000 boomers ages 60 to 73 who retired within the past five years to determine how they've been managing since leaving the workforce. Here's what respondents in the Retirement Triggers Research Report revealed as their secrets to a happy retirement.

1. Emotions, Physical Health Are as Important as Your Finances

When it comes to feeling in control about retirement decisions, many boomers say being emotionally and physically ready is as important as having your finances in order.

"Three out of four in this first wave [of boomer retirees] felt in control of their retirement," says Marcy Keckler, vice president of financial advice strategy with Ameriprise Financial. "Having good physical health helped people feel in control." In fact, 53 percent of those surveyed cited physical health as a main contributor to feeling in control. Nearly as many, 52 percent, pegged emotional preparedness as a key factor.

2. It's Normal to Feel Stressed Before Retirement

According to the Ameriprise report, which was released this month, 63 percent of boomers said they felt stressed about their decision to retire, and 21 percent felt uncertain about their readiness. However, pre-retirement jitters don't necessarily translate to an unhappy retirement. Only 25 percent of boomers say they still feel stressed now that they've settled into their new routine. "Feeling a little stressed is normal," Keckler says. "The first wave learned it gets better."

3. Having a Pension Does Help -- But What About You?

One reason boomers may be feeling so confident in retirement is that so many of them have pensions. Emma Darling of Rockford, Michigan, belongs to the camp of pension-holding retirees who successfully rode out the recession. The registered nurse took early retirement in 2006. "I had met all my career goals, and my husband could retire then," she says. "We were eager to retire together."

Then, the stock market crashed, and Darling second-guessed her decision to retire early. However, like 70 percent Ameriprise respondents, both she and her husband had pensions which lessened their dependence on investments.

Cory Schmelzer, a certified financial planner and owner of San Diego Wealth Management, says that's one reason pensions are so valuable. Not only do they provide consistent cash flow, but they also eliminate market volatility for retirees. That, in turn, may reduce the likelihood of individuals making poor investment decisions during a down market. "People make really bad decisions when they are scared," he says. "Pensions help prevent those bad decisions."

But as Keckler points out, pensions are safety nets that future retirees may not have. "Pensions are becoming less common," she notes, "and 10 years from now, people are substantially less likely to have pension income."

4. Don't Jump Into Retirement Without a Plan

Pensions aren't the only reason some boomers are feeling confident about their post-work life. A significant number also did their research before making the leap to retirement. There are a number of resources available to boomers preparing for retirement, and survey respondents turned to the following sources for information and advice.
  • Employer plan resources: 52 percent.
  • Social Security website and resources: 47 percent.
  • Financial advisor: 38 percent.
  • Medicare resources: 24 percent.
According to Schmelzer, employer plan resources can vary from firm to firm with some companies even offering access to financial advisors through their 401(k) plan administrator. Others may be relatively hands-off when it comes to their workers transitioning to retirement. In that case, it's up to workers to either research retirement options on their own or decide if they want to seek out a personal financial advisor. Not surprisingly, Schmelzer argues, using a finance professional makes sense.

"It's not that people aren't smart enough to research their own retirement options, but do they have the time?" he says. "As an advisor, we've helped hundreds of clients do this before. We know about Social Security; we know about medical costs; and we can throw out alternative [retirement strategies]."

5. The Retired Life Is Also the Busy Life

"You always wonder if you'll be busy enough [when you retire]," Darling says, "but we're not sure how we had enough time to work before." It's a common theme for happily retired boomers. Rather than lazy days spent puttering around the house, these retirees are finding plenty to occupy their time.

"We both thought about what we'd like to do but never got a chance [to] before," Darling explains. For her, that means she now has time to pursue her passion for art. Darling also enjoys volunteering, which is something Keckler says 40 percent of new retirees do with their time.

Other retirees may travel, spend time with family or pursue new hobbies. Regardless of their interests, for a successful retirement, Darling advises younger boomers to devise a plan for how they want to spend their hours once they leave the workforce.

6. A Successful Retirement Requires Couples to Communicate

Married boomers may also want to keep the lines of communication open with their spouse both before and during their retirement. The Ameriprise report found 80 percent of respondents had discussed their retirement plans with their spouse, and 37 percent said their spouse or partner was the most influential factor in their decision to retire.

"When you retire, your whole life is about to change -- from your cash flow to what you're going to do with your time," Schmelzer says. "You don't want to be caught by surprise. The more you communicate, the better."

Financial experts agree it's a good idea to discuss retirement plans with your partner. However, if you both decide to retire around the same time, each partner should be careful not to give up his or her identity. "You don't have to be lockstep in retirement," Darling says. "A married couple doesn't have to be together every minute."

7. We're Really Happy to Be Retired

Despite the conventional wisdom that says Boomers are woefully unprepared for retirement, this first wave of retirees is by and large happy and feeling in control of their future. Keckler says 97 percent of those surveyed report they are satisfied with their new lifestyle. Or as Darling puts it: "We're supremely happy in retirement."
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