I have been noticing many articles in recent weeks discussing a wide array of issues surrounding retirement and end of life decisions, from when to stop working (if you stop working), when to draw Social Security, where to live, and even planning your own funeral! I am not sure if there are more articles out there given that 10,000 baby boomers hit 65 every day, or if I am just much more attuned to them as my husband and I are getting serious about planning the logistics of our retirement. Yes, money issues are at the heart of the discussion, but there are more fundamental issues to work out as well. 

Maybe for you, retirement is so far in the future that it is hard for you to imagine. Hopefully, you have at least figured out how much and where to save for retirement. You’ve drilled this information into your students. Even if retirement is far off it is never too early to think about what you might want retirement to look like, to make sure that you are planning accordingly. If you have a partner, as with other financial issues, it is worth having that potentially difficult conversation earlier rather than later. You don’t want to wake up at 60 or 65 with totally different ideas about how (and where!) you want to spend the rest of your lives together!

There is too much information and the decisions are too important to try to digest all I have been reading and squeeze into one article, so this will be the first article of a series on retirement planning. I will talk about some of the decisions to be made sooner rather than later. They may be less technical, but they are not without financial implications. I hope that as I relate a bit about the decisions we are trying to make, it will help you think about your own situation.

Decision number one: Where Will You Live?

For many, this may be an easy decision. If you have been in one location for a long time, your home (if you own one) is hopefully paid for by the time you retire, and you have a network of friends and family nearby. Why would you move unless you had to? But maybe you dream of living somewhere else--somewhere with better weather (I’m in that camp!) or even somewhere overseas (hoping to have lots of visitors). Maybe you want to downsize to save money or to make it easier to travel more?

Given that my husband and I have moved around for work, we are currently living somewhere without family around. While it is a very affordable area with good healthcare, the weather is not something I want to deal with as I age. We agree that it would be nice to be close to at least one of our kids when we retire. (One is settled in one place, but the other will not likely be settled before we retire.) Beyond that, our “visions” of retirement living start to diverge a bit.

I think living in a vibrant, urban area would be great as a retiree, surrounded by culture and things to do and never having to drive anywhere. Walking everywhere is wonderful for your health, and using mass transit is better for the environment. I’d be happy paying rent and letting someone else worry about things when they break. If we end up not liking where we live, we just move!

There are two problems with this retirement picture in my brain. The first is that the urban area near my child is one of the more expensive cities in the US, certainly more expensive than where we currently live. There will have to be financial trade-offs, like possibly retiring with a mortgage if we decide to buy someplace. The second is that I’d be happy in an apartment, but my husband would prefer to have his own four walls and a yard, which suggests a suburban existence (in this case, potentially way out suburban to make it affordable) and more reliance on a car. A potential solution would be finding a very small, preferably single story house (the hip/knee replacement scenario) that is close enough to a large (suburban) commercial district to walk to, but with mass transit nearby to get downtown.

What about retirement communities? Can you picture yourself living in one? Apparently there is increased demand for retirement communities “near the kids.” I’m not sure if I am ready to commit to a “final” home, but this article raised a couple of good points. If you do eventually need care, this takes the burden and decision-making off of your kids. You would be cared for and they could just visit. And they provide an instant “community” if you are moving to a new location. However, these communities vary greatly in services, costs, and fee structures, and there are no national standards for structure or care. NONE OF THEM ARE CHEAP! Your financial plan may have to be adjusted if you find this option appealing.

Stay tuned -- evaluating retirement communities is on the list of topics for this “Digging Deeper” series on retirement, along with a discussion of long-term care insurance!!!

If you are interested in having your students think about these issues, check out the NGPF project “Envision Your Retirement.”

There is also an interactive to help you figure out if you can retire early.

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