March 01, 2000
Meetings & Conventions - Chapter Two - March 2000

Current Issue
March 2000

Chapter Two

How to prepare for life after retirement .

By Cheryl-Anne Sturken

  In 1992, after 26 years of working for the federal government, Dorothy Bondurant decided it was time to retire. She was 50 years old. Today, the former contracting and procurement specialist for the Small Business Administration is busy running her own meeting planning firm, D. Bondurant & Associates Inc., out of her Silver Spring, Md., home.

"Five years before I retired, I started thinking, 'Now, what are you going to do with the next half of your life?'" says Bondurant, whose only prior planning experience had been organizing the annual SBA field-day activities and coordinating local fund-raisers for various charitable organizations. "When I found out people got paid to do what I was doing for free, I knew right away that's what I wanted to do -- have my own meeting planning business."

Gone is the concept of throwing in the towel at age 65 to head off to the front-porch rocker, marking time with the symbolic gold watch. For many planners, retirement holds healthy prospects for successful business opportunities, possibly even second careers, and the luxury of leisure-time pursuits. Others, however, are faced with financial struggles or prolonged employment out of necessity.

Which route one takes depends, ironically, on planning skills. Meeting planners spend their professional lives planning other people's daily agendas down to the nanosecond, but unless they seriously start planning for their own futures, the retirement years will be anything but golden.

"The whole concept of retirement as we have known it for the past 60 years is going through a massive paradigm shift," says Christopher Hayes, Ph.D., professor of psychology and gerontology and executive director of the National Center for Women & Retirement Research at Long Island University-Southampton (N.Y.) College. "In the next decade it will be completely transformed. I refer to [the paradigm] as second adolescence."

Driving the change, says Hayes, is an increase in life expectancy rates. Thanks to major advances in medicine, nutrition and the evolution of jobs from physically demanding labor to more white-collar occupations, Americans can expect to live longer, healthier lives. As such, retirement is no longer viewed as a time to take care of one's ailing health.

Instead, people are opting to retire earlier, often in their late 50s, many to pursue second careers. Others are parlaying their work experience and acquired skills into part-time jobs, often working well into their 70s. Others simply are leaving the work force to enjoy hobbies long put on hold during the family-raising years.

However, warn many economists, academics and educators, successful retirement depends on both financial security and psychological preparedness. "We don't plan because we don't like to think about aging. This later stage in our lives is not easily understood or articulated, and people are overwhelmed at the thought of it," says Hayes.

Long-term planning
Jerry Gaither has big plans for his retirement -- not that he expects to retire anytime soon. The energetic 60-year-old manager of trade shows and conventions at The Coca-Cola Co. in Atlanta has been fine-tuning his retirement plan for the past 20 years: Buy a small, domestic company in the trade show business, grow it for another five years, sell it off and then segue into what he refers to as "the real retirement years."

Says Gaither, "For me, retirement is the golden opportunity to do something else, other than what you do, but at the same time transferring your skills to the new challenge." Gaither might not know it, but he is ahead of the retirement game, say experts. "Most people fail to project what their retirement needs are going to be and what resources are going to be available to meet those needs," says Steven S. Shagrin, president of the Minneapolis-based International Society for Retirement and Life Planning. "Planning," he adds, "should take place a good 30 years before you make a move to retire."

Rance Willis did not start planning for his retirement until four years ago, when, at the age of 61, co-workers urged him to attend a retirement-planning seminar. He now wishes he had gone when he was 40. The Alexandria, Va.-based meeting planner for the U.S. Army Corps of Engineers, who originally had planned to retire last month, realized he needed to work another year to be in the best financial shape possible. He now says he will retire in February 2001.

"In my original calculations, I hadn't considered leaving survivor benefits for my wife, Vera, through my government pension," he says. "To make that happen, I need to work another year."

How much is enough?
Although the number of people actively saving for retirement, primarily in company pension plans and personal savings, is on the increase, few have worked out a realistic, long-term financial plan. A 1999 Retirement Confidence Survey compiled by the Washington, D.C.-based Employee Benefit Research Institute, a nonprofit, private think tank, reveals that although 70 percent of current workers were saving for retirement, only 24 percent felt very confident they would have enough money to live comfortably in retirement.

Paul Yakoboski, a senior research associate at the institute and a co-author of the survey, says although the percentage of individuals actively saving is high, a more telling finding is that more than half never actually sit and calculate what they should be putting away for retirement. "For many people, it will be a cold slap in the face when they do," Yakoboski says. "People have to realize it takes a little time, but it is time well invested." Without financial security, he says, individual choices, such as whether to continue working, start a new career, relocate and even pursue leisure hobbies, can be seriously compromised.

Gaither, who began saving aggressively for his retirement nine years after joining Coca-Cola, is confident he is ahead of retirement's financial eight ball. "I know what income target I have to hit, and I monitor where I am on that target," he says. "I know to make my plan work, I need to have solid financial ground to stand on."

For Christine Boomer, senior conference planner at the Washington, D.C.-based National Committee for Quality Assurance, a nonprofit watchdog in the health care industry, retirement seems a long way off. At 33 years old and recently married, starting a family is a bigger consideration. "I watch the stock market and participate in my company's retirement opportunities," she says. Still, she wonders if it will be sufficient and says she fully expects to stay involved in the work force most of her life.

Getting started
There is no magic formula for retirement planning. What one needs to save depends on a myriad of individual factors, including one's expected retirement age, lifestyle choices and even personal health. Do-it-yourselfers can crunch their own numbers on several free Web sites, such as or (see "Online Advice," page 58), which offer retirement-planning worksheets. Others might prefer to pay for the services of a financial planner.

"It is important to be realistic in terms of what type of lifestyle you want to lead and what returns you expect from your money, both before and during retirement," says Richard L. Warren, a certified financial planner with American Express Financial Advisors based in Princeton Junction, N.J. "We may be enjoying a good market run now, but if there is a downturn and we hit a bear market, 401(k)s that have ballooned will be devalued."

Warren also cautions clients to consider family requirements when setting retirement goals. "Consider where your children live. Flying back and forth to visit grandchildren can eat up savings very quickly," he says. "You'd be surprised at the number of people who relocate to be nearer to their grandchildren."

Following are key steps to developing a retirement plan.

  • Determine assets. List all income and assets, including 401(k)s, individual retirement accounts, after-tax individual savings (i.e., stock portfolios, savings accounts), real estate, valuable artwork or collector's items and anticipated inheritance dollars. If married, the same information for a spouse can be part of the projection or can be compiled separately.
  • List typical expenses. Be specific, and be thorough. This is a tricky area for many people, especially if they have not begun a family. Itemize everything, from mortgage and car payments, grocery bills and outstanding college loans to child care, vacations and pet care.
  • Think ahead. If a summer home in Maine or a $30,000 kitchen renovation factors into the retirement dream, include it. Now is also the time to jot down personal wish-list items, such as private college for the kids or that yearly three-week Mediterranean cruise. Similarly, if aspiring to start a business, do the homework in advance. Develop a realistic five-year plan, including start-up costs, and include those projections.
  • Crunch the numbers. Once you have assembled your data, have it analyzed by a financial planner, or use software or a Web service to do it yourself. With each of these options, retirement-planning computer programs are used that factor in inflation rates, social security payments and compound interest, and churn out a dollar amount to be saved by a particular retirement date.
  • Start saving. A financial planner can help design a personalized plan. Armchair investors and others might opt to do their own research and plot a course of action.
  • Revisit and revise. Lifestyle changes such as job loss, marriage, divorce, relocation and the arrival of children can derail any plan. Be prepared to fine-tune the plan annually.
  • Haves vs. have-nots
    In 1998, the Washington, D.C.-based American Association for Retired Persons, in an effort to better understand baby boomers' expectations for retirement, conducted an in-depth survey of more than 2,000 Americans, ages 33 to 52. Key among the survey findings was that although eight in 10 boomers said they planned to be involved in some form of work during retirement, only 35 percent expected to be working for the enjoyment of it, and not out of necessity.

    According to the AARP, the survey revealed a clear division of boomers into two camps, the "haves" and "have-nots." The haves stand to inherit from parents who spent cautiously and saved regularly, and they also have substantial 401(k) plans on which to draw. The have-nots, by contrast, do not have substantial pension plans, do not stand to inherit and, due to financial obligations, have not built up much personal savings. The necessity to generate income will force them to delay retirement.

    Many women, particularly single heads of households, approach retirement at a significant disadvantage, says Nancy Dailey, Ph.D., a sociologist and co-founder of, an online learning site for women that was to have launched Feb. 15. "The whole issue of having children and child care has had a great impact on a woman's ability to earn income and to save for retirement," says Dailey. Women who work part-time in order to juggle child-raising responsibilities might be disqualified from taking part in company-offered pension plans, a major retirement-savings vehicle for a majority of the population.

    Hayes, of the National Center for Women & Retirement Research, agrees. In his 1998 book Money Makeovers: How Women Can Control Their Financial Destiny, he estimates that by 2010, as many as 18 million women retirees will be living at the poverty line. "Many of those women did not think through the financial implications of not participating in pension plans and of stepping out of the work force when they had children," says Hayes.

    Expect the unexpected
    Savvy investing and prudent saving habits aside, unanticipated events can foil even the most intricate retirement plan. According to Nancy Dailey, women in particular often are unprepared and apt to panic when faced with unexpected events such as a divorce in later years or having to leave the work force to care for an elderly parent or a sick child.

    Dailey and her partner, Kelly O'Brien, an adult learning specialist, advise clients on negotiating child-care responsibilities, buying disability insurance, taking advantage of employee training programs, and acquiring and maintaining skills.

    "People say they want to acquire new skills and sharpen old ones, but they resist the idea of going back to school," Dailey says. "They'll say they can't possibly use their retirement savings for education, but what greater investment is there than investing in yourself?"

    Dailey and O'Brien also encourage clients to make decisions as early as possible regarding long-term care insurance. First offered in the 1970s, long-term care insurance was designed to supplement Medicare and covered only nursing home care. Today, its benefits include home health care, assisted living and adult day care. Without it, says Dailey, retirees will be forced to dig in to their retirement savings to cover health care costs. "The earlier you buy [long-term care insurance], the cheaper it is," she adds. "And if you don't have good medical coverage, your savings could be eaten up real fast, and then your children will have to pay for for your care, and the cycle will perpetuate itself."

    Social security pays off
    Do not underestimate the power of social security benefits -- not yet. The Social Security Administration estimated 1999 benefit payout to be $385 billion, with 70 percent going to retired workers and their dependents. The average monthly payout is $780.

    "Social security benefits are far more than just about retirement," says Linda Claramo, a spokesperson at the SSA's national press office in Baltimore. "People need to understand they can become disabled, they might have dependents they need to care for. Social security plays a big role in such issues."

    And it will play an even bigger role in retirement trends, says Peter Orszag, a lecturer in economics at the University of California, Berkeley, and research associate at the Center for Retirement Research at Boston College. When it comes to claiming benefits, says Orszag, timing is everything. Although benefits can be claimed as early as age 62, "a lot of people don't know there is a cost to claiming early. Your benefits are reduced the earlier you claim."

    Also, he says, benefits are reduced if the claimant earns above a certain amount. "Many people don't know your benefits are reduced if you earn too much. But many more don't know it is only a temporary penalty. When one stops working, or reaches age 70, full benefits are restored."

    Currently, those between age 65 and 69 who are claiming social security benefits will forfeit $1 of their benefits for every $3 of wage income they earn above $15,500. However, legislation passed in 1996 will increase that supplemental income threshold to $30,000 in 2002, making working later in life far more attractive, says Orszag.

    Also, in October 1999, in an effort to take the mystery out of the mechanics of social security benefits, the SSA began the first of a national annual mailing to all workers age 25 and older. The mailing contains important information such as an estimate of the recipient's monthly retirement benefits, broken down by age, and the benefits available to dependents.

    Older workers in demand
    According to projections by the Social Security Administration, baby boomers will swell the ranks of official retirees (i.e., those expected to claim social security benefits) from 28 million in 2000 to 60 million by 2030. With boomers outnumbering Generation Xers roughly 3-to-1, retirement experts predict a wave of boomer retirement, which could begin in 2010 and peak in the 2030s, will create a severe shortage of skilled workers and, as a result, a demand for older, more experienced workers.

    Hayes says, "Corporations will need older workers, simply from the technological skill base. They will be be looking for ways to retain and recruit those older workers." The competition for older workers, he says, will force corporations to offer enticements such as flextime and opportunities to work at home.

    "Older workers will be more attractive because they will be more dependable," says Shagrin. "They will have no kids to call in sick for, and many will have a desire to work for extra cash."

    At the same time, many retirees will relish their hard-earned leisure years. Rance Willis, for one, has no intention of working after he retires. He is looking forward to traveling with his wife and indulging in one of his favorite hobbies, local theater. "I have always been involved with the theater, both on and off the stage. I will volunteer more time there," he says.

    Dorothy Bondurant, however, fully enjoys the challenges her second career continues to present. Last year, she won a bid to coordinate a dinner at the White House for 18 special advisers to the president. This year she will coordinate four more dinners for the same group. And she has no plans to cut back. "I've been careful to keep my business manageable," she says. "I've watched many of my colleagues who are in business for themselves struggle to pay these big overheads that their offices generate. I don't want that. I want to have a life."

    Having a good government pension provides a certain measure of financial security and peace of mind. "The meeting planning money takes care of my lifestyle," Bondurant says. "But, even if I never made another penny from here on out, I wouldn't be out on the street."

    Are You Mentally Ready?

    The psychological issues related to retirement are as important as the financial ones, says Joyce Cohen, a life-planning specialist in Huntington, Conn. Here's how to prepare emotionally.

  • Pilot change. Graph major changes in your life: jobs, marriage, births. How was each transition handled? Anticipating the impact of change helps control it.
  • Produce balance. Conduct an honest self-examination across eight facets: learning, work, leisure, financial, health, home, relationships, emotional and spiritual. "Are you career rich but leisure destitute? Many people get to midlife and realize they have no friends," says Cohen.
  • Probe assets. Identify what is valuable to you at this stage in your life. "This helps people design and launch the next chapter in their lives."
  • Pursue meaning. Identify what is absolutely necessary for a rewarding life. "For some people, it will be as simple as having more time to themselves. For others, it may be getting a handle on a fear they have carried for a while."
  • Prosper in living. Define exactly what personal prosperity means to you. Is it purely a dollar figure, or do spirituality and health factor in?
  • Plan with purpose. Use the outcome of the first five steps to develop a realistic plan and time line. Include skills to learn, courses to take, savings to shoot for and talents to brush up on. -- C.A.S.

  • Ask a Financial Planner

    It takes money to turn retirement dreams into reality. Hiring a financial planner should be the first step. Janet K. O'Connell, an independent certified financial planner based in Larchmont, N.Y., offers some insights.

  • What do financial planners do? "They help put together a savings plan, based on income and financial obligations, which will help clients achieve retirement goals."
  • How should I choose one? "The person should have a Certified Financial Planner designation. You can check credentials by contacting the Financial Planning Association, based in Denver." (800-322-4237;; a new Web site at was under development at press time.)
  • Are there different types of financial planners? "There are two types: independent financial planners and those who are affiliated with financial institutions such as Merrill Lynch."
  • Which kind is better? "Both are good. The major advantage to hiring an independent planner is they tend to look at everything that's out there, not just one institution's offerings. On the flip side, planners at financial institutions will fill out all the forms and do all the paperwork for you. They are more involved in the implementation of the plan."
  • How do they charge? "Fee-only planners charge by the hour. Commission-based ones earn a percentage of the dollar value of the portfolio invested for the client. Some are paid a combination of both." (A 1998 survey pegged the average hourly rate at $100.)
  • When should I start saving? "Saving is a little like dieting. Start now and think about what you consume. There is always room to save. That ritual $30 Friday-night Chinese dinner adds up to $1,500-plus a year -- a tidy savings."
  • Should I contribute to my company's 401(k) plan? "Pension plans are a painless way to save. Always put in the maximum amount. It will help maximize your retirement savings and improve your tax situation."
  • What are common mistakes? "People retire at 62 and then start plowing into their retirement savings. I remind them to be cautious; they could be around another 20 years. Another is the misconception that you need a significant lump sum to start saving. Not true. Most people get rich by quietly socking away money year after year." -- C.A.S.
  • Online Advice
  • The Social Security Administration's site ( takes the mystery out of social security benefits.
  • The American Association of Retired Persons ( addresses issues ranging from tax preparedness to assessing work and life skills.
  • The Motley Fool Inc. ( delivers straight-from-the-hip free financial advice.
  • U.S. Small Business Administration's site ( is a turnkey source for anyone hoping to start a business.
  • ( has a handy Retirement Planner that computes individual needs based on salary, lifestyle needs and assets.
  • ( has advice on financing retirement plus do-it-yourself worksheets. -- C.A.S.
  • Golden Books

    Need a little savings advice? The following books provide valuable insight.

  • The Savage Truth on Money by Terry Savage, John Wiley & Sons Inc., New York City, $24.95 This book is chock-full of investment advice and tips on everything from paying off a student loan to rolling over that 401(k). Financial guru Savage tells how to build a solid financial plan based on even the most modest paycheck.
  • Money Makeovers: How Women Can Control Their Financial Destiny by Christopher L. Hayes and Kate Kelly, Doubleday, New York City, $24.95 This is a wake-up call for any woman who doubts the need to take control of her financial destiny. Hayes presents alarming statistics for the future of women's health, plus advice on how to beat the odds.
  • The Millionaire Next Door: The Surprising Secrets of America's Wealthy, by Thomas J. Stanley and William D. Danko, Pocket Books, New York City, $14.00 Meet the millionaire neighbors. They drive used cars, live in modest houses and send their kids to public school. No hot stock tips here, just plenty of proof that living modestly and saving regularly really does translate into wealth.
  • Age Works: What Corporate America Must Do to Survive the Graying of the Workforce by Beverly Goldberg, Free Press, New York City, $25 This book looks at the massive upheaval retiring boomers will create in the work force within the next 10 years and examines how Corporate America will have to reinvent itself to recruit and retain these skilled workers. -- C.A.S.

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