A Generation Plans Earlier - And More Boldly

At dinnertime on a pleasant Friday evening, spirits are high in the dining hall at the University of North Carolina in Asheville, in the state's mountainous western region. Yet this is not the usual student crowd. Instead, the room is filled with adults who have come for a different education - what could be called Retirement 101. As they trade introductions, an all-important question echoes around the tables: "When do you plan to retire?"

Answers vary: "In four months," says one woman. "Next June," replies a teacher. "Three years from now," says a man from New York. Whatever their timetables, it is the prospect of ending a career and beginning a new life that has brought these 130 people from 24 states to an unusual event - a three-day Creative Retirement Exploration Weekend. They have come to discuss everything from relocation and finances to education, employment, and volunteer work.

"You're all RITs - retirees-in-training," jokes Ronald Manheimer, director of the university's North Carolina Center for Creative Retirement, as he welcomes guests to this sixth-annual seminar, the only one of its kind.

As retirees-in-training, they represent a burgeoning group - members of a generation planning more carefully, and more boldly, than their predecessors how they will spend several decades of leisure. They are also planning earlier. The average age here is 59, with some participants in their 40s.

Asking the big questions

Thirteen percent of Americans - 1 in 8 - are now 65 or older. By 2010, 1 of every 3 Americans will be 50 or over. As life spans increase, more employees, men and women, must confront questions both economic and social: What is a good retirement, and can I afford it? Who am I when I am no longer defined by a title? How will I fill the hours once devoted to work?

"People can anticipate a period of life they never could have planned for before," says Dr. Manheimer. "They must make a lot of decisions. It requires a lot more deliberateness."

The average age of retirement has remained 62 or 63 for 10 years, down from 65 in 1970 and 68 in 1950. Yet Manheimer finds that the concept of retirement has "changed remarkably" in recent years, producing very different expectations. A more active retirement-age population, he says, "is experimenting with different kinds of lifestyles and combining life activities in new ways."

As one change, Manheimer predicts that more people will retire from a full-time job, probably at the same average age of 63, then work part time, either in the same kind of job or in something related.

In another scenario, Manheimer finds that rather than being "100 percent retired, or 50 percent on the golf course and 50 percent traveling," many people want to combine "some work, some continued learning, some volunteering, some recreation and traveling, and some family involvement - visiting kids and grandchildren."

Charles Longino, a demographer at Wake Forest University in Winston-Salem, N.C., offers one explanation for these shifts. The amount of education in retired groups is going up, he says, describing a pattern that "jumped out" at him in the 1990 Census. That increase, Dr. Longino says, "is going to have a good deal to do with the amount of productivity in retirement, the variety of interests, and choices - whether you want to volunteer, and whether you want to go back to school and get training."

Although crystal-ball gazers predict that baby boomers will redefine retirement, Manheimer finds that the age group represented by these retirees-in-training is already dramatically reshaping attitudes. "We have about 15 years' worth of folks who are moving into retirement before the baby boomers," he says. He puts their numbers at 40 million.

"The GI generation before them had plenty of adventure - more than they needed, with World War II and the Depression," Manheimer says. "This generation came of age in a more stable period. Now in their middle years they want a little more adventure. We're seeing more interest in outdoor activities - mountain climbing, cycle treks, going to more exotic places. Certainly there's more emphasis on fitness."

That emphasis is already visible in some retirement centers. Thirty years ago, when the Del Webb Corp. built its first Sun City in Arizona, shuffleboard was common. Now, says Del Webb's Ken Plonski, "We don't build shuffleboard courts anymore. Today the investment is in state-of-the-art fitness centers. They're the most popular activity retirees in Sun City enjoy. They realize that if they remain active, they can live a longer and more healthful retirement."

To gauge other attitudes toward retirement, Robert Weiss, a senior fellow at the Gerontology Institute at the University of Massachusetts, Boston, spent two years interviewing 75 retired administrative professionals for a forthcoming book. Retirement, he finds, brings "a lot of gratifications. The freedom you get, that's heady."

Yet Dr. Weiss cautions that it takes "a certain amount of fumbling around to see how you're going to live this new life."

For some individuals, the adjustment is easy. He recalls one man saying, "I'll tell you how long it took - the time between closing the door to my office and walking to the parking lot." At the other extreme, Weiss says, "People can't do it. There are people for whom work plays an irreplaceable role in their lives. That doesn't necessarily mean that's all they have. It just means they absolutely need work. And there are some who need work to get away from home."

Marital issues

Even so, he observes that for many married retirees, relationships improve. "There's the old joke that you have twice as much husband and half as much money. That does represent a change in the marriage. But for most couples, it's benign. For lots of people, the quality of life is at least as good as it was during the later working years, and possibly better."

Still, marital issues become more complex in an era of high divorce rates. Age gaps between remarried partners may be greater than in a first marriage, putting couples on different career timetables. Stepchildren add other considerations.

One husband at the Asheville weekend says privately, "My wife is younger, with three kids. Our lifestyles are quite different."

Accepting uncertainty

Some seminar participants express another concern: how to spend their time. "They haven't developed enough interests outside work," Manheimer says. "People have unrealistic ideas about what they'll do in retirement. Travel gets old pretty fast. It gets tiring and expensive."

He emphasizes the importance of cultivating interests before retiring. Whatever one's choice - learning a language, playing an instrument, serving social causes - he says: "You'd better do it now. If the fantasy is illusory, you can cross that off the list and move on to something else."

Manheimer follows his own advice. For his 50th birthday his wife, Caroline, gave him a piano. He now takes weekly lessons.

Retirement, Manheimer says, is "like being an adolescent again and reconsidering what you want to be. You accept the uncertainty and ambiguity of the future and take more risk. You start asking, 'What have I wanted to do but haven't accepted the challenge?' "

For Thomas and Nancy Walter, seminar participants from Medina, Ill., that list is long. Although Mrs. Walter acknowledges "some ambivalence" about leaving her career as a speech and language pathologist in public schools when she and her husband, an engineer, retire in two years, she anticipates "an exciting new phase of life. We want to be involved in the community, read, golf, volunteer, take some classes, travel, and go for walks in the woods. I just can't picture us ever being bored. There are too many things to do."

As attitudes like this ripple through society, they inevitably affect everyone. "The retirement period is like a social movement," Manheimer says. "It's coming increasingly into the consciousness of people at a younger age. Seeing your own parents and grandparents in new roles has to have an effect on how you live your life."

Those changes leave some wishing for a redefinition of terms. "Retirement carries with it such connotations that mean withdrawal, that mean I'm just closing up like a leaf, I don't have any more usefulness," says Glady Thacher, founder of LifePlan Center in San Francisco, serving people in their 50s, 60s, and 70s. "It's really a way of refinding oneself and refocusing. We're not saying, 'This is the end of an era.' We're saying, 'This is a time to get ourselves fitted out for another era in our lives.'"

For many of the Asheville retirees-in-training, including Virginia and Dick Baldau of Silver Spring, Md., that refocusing is spurring reflection. Mrs. Baldau, who retired this year from a federal criminal-justice research agency, sums up the feelings of others in the group when she says, "I'm going to sit still for a while and listen to my head and my heart. For the first time in many years, I have choices and real options. I feel very fortunate."

Putting a Price Tag on Retirement Needs

How much money is enough?

That is the critical question many workers face as they approach retirement. In a study released in May by the Public Agenda Foundation, almost 40 percent of Americans expressed anxiety about their ability to achieve their desired retirement lifestyle, up from 29 percent in 1994.

The same group finds that almost 6 in 10 private-sector workers now reach retirement age without pensions. Employers are moving away from traditional pension plans to retirement programs based on workers' voluntary contributions. One worker in 5 now has a 401(k) or similar plan.

Americans are also in the midst of what Robert Friedland, director of the National Academy on Aging in Washington, calls "a national debate about entitlements." As politicians rethink Social Security and Medicare, and as workers face the prospect of more years in retirement, Mr. Friedland says, "It's not clear if they will have sufficient resources to survive a longer life expectancy."

Says Charles Longino, a demographer in Winston-Salem, N.C., "I can't be the only person who's thinking about retiring at 70 instead of 65."

As a result of changes like this, equations for retirement income have grown more complex.

A new study by Georgia State University and Aon Consulting calculates retirement income replacement ratios for various family configurations. These ratios measure the amount of retirement income needed to preserve a family's preretirement, after-tax level of spendable income. They range from 84 percent for someone earning $20,000 at retirement to 67 percent for a worker earning $60,000. For those with incomes of $90,000, the ratio goes up to 71 percent, because a greater portion of Social Security benefits - up to 85 percent - is taxable for retirees with higher incomes.

"Today it's so difficult to determine how much people will need in retirement," says Ed Towson, a certified public accountant in Asheville, N.C. "Planners used to say, 'Count on needing 60 to 70 percent of your preretirement income.' But then retirees started getting minds of their own. They wanted to build the dream house they couldn't build before, or buy a beach house or a mountain house."

In some cases, Mr. Towson continues, "Their 40-year-old kids started coming home. Other retirees must educate their grandchildren. Others want to travel. So now all bets are off. Some people can live on 60 percent of their preretirement income, but others can't. The range is huge."

Because of that range, Towson avoids using a formula in retirement planning. Instead, he asks clients to spell out what they might like to do when they retire and put price tags on it. Then, he says, "Work backwards. Calculate the net income you will need to cover those costs. Then recalculate to reflect income taxes and assumptions about rates of return on investments. After that, you can devise a plan for accumulating your required asset base."