How Terribly Strange To Be Seventy

I’ve worked in the world of investments and financial planning for over 25 years, starting as a 
broker in 1991 and having earned my Certified Financial Planner® designation in 2001. Occasionally 
before, and almost always in the last fifteen years, discussions about retirement have been a part 
of my everyday interactions with my clients. I’ve always tried to be kind as I reviewed people’s 
retirement options but, now that I’m facing retirement myself, I find that receiving advice is not 
necessarily the same as offering it.

As I’m cutting back to three days per week, I’m drawn to the words of Paul Simon in his 1968 song 
Old Friends/Bookends. Paul was in his late 20’s when he wrote the lyric which I’ve chosen for 
today’s title. He’s five years older than I am and continues to remain relevant through recording 
and performing. Perhaps there’s hope for me in this final stage of my working life.

According to the 2008 book Great Expectations: America & The Baby Boom Generation, baby boomers are 
America’s wealthiest, most active and most fit generation. And according to Pew Research, 10,000 
baby boomers have been turning 65 every day since January 1, 2011, a statistic that will continue 
for the next fourteen years. As part of the leading edge of that cohort, let me take a few minutes 
to reflect on some of the topics that have become less theoretical and more personal as my own 
retirement process has begun.

As a planner, I always start retirement conversations with clients by confirming the existence of a 
balanced budget. Especially with today’s interest rates (even post the recent bump), I’m basically 
agnostic about having a mortgage in retirement. As long as income exceeds outgo, I don’t care 
whether there are more income-producing assets and a mortgage loan or that those assets are used to 
pay off the loan. This can be a very personal issue to boomers. Many of us were raised by 
Depression-era parents who worked from a no debt playbook. If you don’t want a mortgage, don’t have 
one but if satisfying the loan will require disposing of assets, be sure to work with your planner 
so the sales are handled tax-efficiently. I should mention that getting a mortgage loan in 
retirement can be difficult as most lenders require assurance that cash flow will cover payments. I 
always recommend that my clients obtain the loan prior to retirement, to make sure that things 
proceed as smoothly as possible.

While our family budget is solid, I find that I’m a bit uncomfortable seeing my paychecks shrink. 
Intellectually, I know that other income will be there but it hasn’t been an easy fact to 
internalize. Like most boomers, I started working during grade and high school, having a paper 
route, working part-time at the neighborhood pharmacy then taking on various summer jobs while in 
college. I’ve built up a lot of working momentum over the years and I’m having a bit of trouble 
allowing it to dissipate. Working part-time feels just a bit lazy to me.

I’m among that group of men (and some women) who struggle to see ourselves as who we are, not as 
what we do, so staying relevant in retirement may present a challenge. Perhaps you feel the same 
way. The reality of not working full time draws my societal value into focus: who am I if I’m not a 
full-time planner? How will I spend my time? How will I add value to the world? Many people find 
that there’s more time available for volunteer work in retirement. The United Way in our community 
offers a referral center which matches skills with volunteer opportunities, providing a good
chance of a fit. There’s a significant body of research suggesting that socialization is important 
for retirees, so working for pay or as a volunteer can be good for both your mental and physical 
health.

By the way, should there be issues in balancing the retirement budget, remember that a minimum wage 
job paying
$15,000 per year has about the same impact on your budget as having an extra $300,000 in retirement 
savings. Working in a non-professional job, even part time, might be a way to answer two questions 
at the same time.

Thinking about retirement requires thinking about health care insurance. The new presidency has 
brought continuation of the Affordable Care Act into question but for those who are 65, Medicare is 
available. Of course, this is a government program so it’s somewhat complicated and probably worth 
reviewing with your planner. It is available a la carte, beginning with Part A which covers 
inpatient hospitalization and other services and is free for most US citizens. Part B covers the 
services of physicians, outpatient care, medical devices, etc. It is optional but almost always 
represents a
good deal, costing most Americans $134 per month. Premiums are lower for those receiving Social 
Security income and

higher for those individuals earning more than $85,000 per year. Part D provides drug coverage and 
is available from numerous insurers as you’ll learn as age 65 approaches. I think the best way to 
deal with this is to ignore all the mail you’ll be receiving and go to the Medicare website. It 
allows you to enter your medicines, then compare the plans available in your area which cover them. 
One of the most helpful features of this website is the ability to sort by ratings provided by 
actual plan participants, along with monthly or estimated total yearly cost. There are penalties to 
late enrollment in Parts B and D, so I believe everyone should begin using them at age 65.

As planners, one of the things we take most seriously is protecting our clients from catastrophic 
loss. Coverage against significant medical cost is available through Medigap plans, a range of 
privately insured additional coverages ranging from bare-bones to almost total. In the government’s 
shorthand, these are Parts E – N. For reasons known only to our employees in government service, 
coverage levels do not increase as we move farther through the alphabet and Part F is actually the 
most comprehensive – thus most expensive. For anyone who wants to be certain that a major illness 
or
accident won’t wipe out their retirement nest egg, proceeding with one of these plans, usually in 
combination with Part D, is a must. Incidentally, I no longer recommend Part C (Medicare Advantage) 
plans. While Part C offers a simpler approach (requiring only one card for all services) these 
plans are geographically restricted and switching to Medigap coverage sometime later will require 
medical underwriting.

Most people are aware that preventative care is important and a recent study offers support to the 
concept. While generalizing about the efficacy of medical treatments is difficult, Medicare’s 
approach to coverage seems to have improved medical outcomes. Being subsidized by general tax 
revenues, the price is certainly right and we now have some evidence that our nation’s general 
health is being improved too.

I believe it’s also important to consider long-term care insurance, especially for those who wish 
to leave a financial legacy to their children or institutions. According to a 2016 survey conducted 
by insurer Genworth, the cost of a private nursing home room is nearly $100,000 per year. According 
to the same survey, as well as headlines all over the internet, these costs have increased 19% in 
the past five years. At-home costs are significantly lower but still increasing rapidly and almost 
none of these costs are covered by Medicare. LTC insurance is medically underwritten, meaning it 
may not
be available to those who are already ill. It’s easier to get coverage by starting younger, when 
health is generally better, but that means premiums are probably going to be paid in advance of 
need. I've encountered a lot of resistance to taking this approach but please let me remind you 
that all of us have fire insurance on our homes and all of us hope it will never be needed. Perhaps 
keeping that in mind while reviewing LTC coverage options will help make the process more 
palatable.

There are alternatives to LTC, of course, including life insurance with nursing home riders and 
reverse mortgages. Let me suggest that these too are best considered with the help of your planner 
– and that you never buy any sort of insurance based on a TV commercial featuring someone who used 
to be famous.

While I encourage all of my clients have some sort of an estate plan in place, the transition to 
retirement does add some urgency to the conversation. According to a USA Today article based on a 
Harris poll, nearly two-thirds of adults don’t have wills. I suspect the primary reason is the 
general reluctance to come face-to-face with mortality. I should pause here and point out that 
actually everyone has a will – if you don’t prepare your own, your state has one ready for you.
Typically these wills do not leave all assets to a spouse but apportion them among living 
relatives, often including parents. Chances are the government’s approach will be different than 
yours.

A will isn’t the only component of an estate plan. Other, and in some ways more important, 
documents include durable and medical powers of attorney (which allow someone to do business or 
make health-care decisions for you) and a living will or advanced directive (through which you 
state your wishes about having extraordinary medical measures taken on your behalf). Trusts used to 
be the best tool for avoiding estate taxes but, with adjustments to the federal estate tax, few 
middle class people owe those taxes anymore. That said, a trust can be invaluable for making sure 
your wishes are carried out, especially in the case of a second marriage (or a non-married couple) 
or when a special needs child is involved. Most planners aren’t attorneys so don’t offer legal 
advice but yours can certainly recommend someone for you to consult on these topics.

Thanks for listening as I share some of the realities I’m coming face-to-face with as I ease into 
retirement. As I conclude
my thoughts for today, I can’t help but wonder if Paul Simon, now 75, has begun to feel the 
strangeness yet.