Why Your Retirement Will Probably Include Another Honeymoon
By Beth Misak
Last month we began an important conversation about historic changes in modern retirement. As noted in a pivotal study entitled “8000 Days of Retirement,”1 retirement can now be an extended, dynamic period lasting 20 years or more. For those who reach their 80s, that’s one-quarter of their lives.
The four phases of retirement identified by MIT AgeLab are: the Honeymoon Phase, the Big Decision Phase, Navigating the Longevity Phase, and the Solo Journey Phase
This month we will focus on the first phase, known as the “Honeymoon Phase.”
The Honeymoon Phase
Those with greater education and income can experience a prolonged span of well-being in retirement. This will allow for far more activity than a regular golf game or long walks on the beach. An average person today in their early 60s is likely to enjoy nearly 20 healthy life years ahead of them.2 It’s not surprising that many look upon this first leg of the journey as a honeymoon. There can be travel, participation in numerous leisure activities, and volunteer work. Some may choose to work part time in order to remain engaged and to secure additional income to support loved ones. It’s estimated that more seniors will remain in the work force than ever before. Among 65- to 74-year-olds, labor force participation is predicted to hit 32% by 2022.³
The Honeymoon Phase can mimic lifestyles during full-time work because it still encompasses ample resources and well-being. Yet it also offers more freedom to pursue interests and shift responsibilities. It is an opportune time to anticipate, plan for, and safe-guard against future potential decreases in resources.
The Honeymoon Phase is not devoid of challenges. Even in retirement, Baby Boomers can find themselves “sandwiched” between continuing responsibilities. They may be supporting adult children at the same time they are caring for frail aging parents. Today, 28% of adult children provide financial help to their aging parents.4 As young adulthood for millennials extends, adult children may also still be living at home or be somewhat financially dependent. In a Pew study, 35% of people age 18 to 34 moved back in with their parents due to economic conditions.5 Supporting adult children and elderly parents is something most don't plan for when assessing their income needs in retirement. This can result in the honeymoon phase requiring a tighter budget.
Next month we will explore the second phase in the 8,000 days, the Big Decision phase.
1Hartford Funds and MIT AgeLab
2Social Security Administration, www.ssa.gov, 2017
3Centers for Disease Control and Prevention, “Productive Aging and Work,” 9/11/15. Most recent data available used.
4Pew Research Center, “Family Support in Graying Societies,” 5/21/15. Most recent data available used.
5Pew Research Center, “For First Time in Modern Era, Living With Parents Edges Out Other Living Arrangements for 18- to 34-Year-Olds,” 5/24/16
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