Retirement is for sissies

Retirement is for sissies

Do older workers count the days till they can retire, or do they want to keep working until they drop? Once they do retire, are they eager to get to where they can play golf year round? Or is it more accurate to assume that they resist retirement and refuse to make space for younger workers? One view has it that older people lose their edge and should retire, but they hesitate to do so because they're afraid that it will be depressing, or perhaps they are just plain greedy. Also, many people think that older adults can always get work if they want to, so in a difficult economy they always seem to crowd out the young workers. By contrast, some people believe that retirement seems like easy street: lots of financial benefits and warm weather are waiting. Here we will discuss what research has to say about the effectiveness of older workers and the status of the laws relating to workplace discrimination against them. Then we'll delve into the myths about retirement – who enjoys it, who can afford it, and who is moving to the Sunbelt.

Myth #29 Older workers are inferior to younger workers

A common myth is that older employees are much less desirable than younger ones. Even the American Psychological Association advises psychologists to beware of the stereotype that older adults are inefficient in the workplace (American Psychological Association, 2013). There are several aspects to this myth. First, there is the assumption that older employees are less competent than younger ones (e.g., they're slow, unable to learn or use new technology). Second, there is a belief that older workers are unreliable and bound to take more days off from work than younger workers. Finally, it is often taken for granted that, due to their age, older workers will not last long with the organization. But what do we actually know about older employees?

With regard to competency, jobs vary in their requirements. Some jobs require extensive knowledge about technology. It's generally the case that the present-day older cohort is not well versed in the use of technology compared with younger cohorts, who probably started using it in their school years or even earlier. Nevertheless, in an early study conducted long before “Google” became a household word, Ansley and Erber (1988) demonstrated that older adults had a positive attitude toward computers and were fully capable of using them. It may take more time to train older adults because they are not as accustomed to using technology as younger adults are. For the most part, however, older adults are willing and able to learn (Sharit et al., 2004). In the coming years, cohorts moving into their mature years will have more extensive technological background and experience – this is already occurring – so it will not take much effort for them to adapt to nuances that are constantly changing.

Important as it is for some jobs, technology is not the prime consideration for all types of employment. Older adults are generally just as capable as younger adults, perhaps even more so, when jobs call for social skills and a store of wisdom and relevant experience (crystallized abilities), which are discussed in more detail under Myth #9, “Brain power declines with age” (Bowen, Noack, & Staudinger, 2011). Also, older adults are just as vigilant as younger adults, that is, capable of the monitoring that is necessary in order to detect errors (Kausler, Kausler, & Krupshaw, 2007). Nevertheless, in highly complex situations that call for keeping track of a large number of tasks at the same time, older adults may be moderately less accurate than younger adults (Kausler et al., 2007; Rogers & Fisk, 2001). Although speed of processing may decline with age, it can often be remedied with practice and training. And for many jobs, accumulated knowledge and experience can compensate for any decline in speed (Cleveland & Shore, 2007; Salthouse & Maurer, 1996). In jobs that allow employees to process tasks sequentially (as opposed to multitasking), especially when accuracy is valued more than speed, older workers can certainly compete with younger ones.

As to the assumption that older employees are unreliable, the reality is that they have a lower rate of absenteeism than younger employees do (Panek, 1997). Older workers tend to be highly committed to their jobs. They have a great deal of investment in the work role and express greater job satisfaction than younger workers do (Ekerdt & DeViney, 1993). Their satisfaction seems to be especially high in human service jobs (Cleveland & Shore, 2007). It's also important to consider what the Towers Watson Global Workforce Study (2012) calls presenteeism – lost productivity at work. This refers to a situation we are all familiar with: one can be present at work but not be working very hard. Perhaps more gets done than when we don't go to work at all, but this sort of lost work time can add up. We can infer that older adults, by being highly committed to their jobs and by having a big investment in their role as workers, would also be more engaged in their work, and thus have lower presenteeism than many younger workers. According to this study, highly engaged employees have lower presenteeism as well as less absenteeism than disengaged employees.

Now let's turn to the belief many people have that, once hired, older employees will not last as long with the organization as younger employees will. Indeed, younger adults probably have more years of full-time employment ahead of them than older adults do. But the years younger adults spend toiling in the workplace will not necessarily all be with the same employer. Younger employees are more likely than older ones to move on to other jobs, partly because they are at the stage in their career trajectory where they are searching for the “ideal” job. Given the culture of the contemporary American workplace, changing employers is often the route to salary increases and promotions, which are especially attractive to younger employees, many of whom are starting families and in need of a higher income. In addition, many younger adults enter the workplace with student loan debt, so their financial needs motivate them to search for jobs that offer higher salaries. In contrast, older employees' positive attitudes and job satisfaction mean they are likely to stick with an employer longer than younger employees will.

In sum, there's abundant evidence to bust the myth that as workers, older adults are inferior to younger ones. Even so, ageism still exists and will be discussed further in Myth #30, “Older adults hardly ever have trouble getting work.” Although older adults may be at a disadvantage in jobs that emphasize speed and multitasking, they're highly capable of excelling in jobs that require care and accuracy as well as a store of knowledge and social skills.

Myth #30 Older adults hardly ever have trouble getting work

Thanks to the Age Discrimination in Employment Act (ADEA), blatant instances of age discrimination are less common now than they were in the past. The ADEA was first enacted in the U.S. in 1967 and covered workers aged 40 to 65. It applied to companies with more than 20 employees and covered both the hiring and treatment of older workers. The ADEA was revised in 1978 to cover workers up to age 70. One further revision in 1986 eliminated, with some exceptions, any upper age limit for covered workers.

Since the enactment of the ADEA, job ads rarely state age requirements anymore, and job applications do not ask for age. Even so, when it comes to hiring, the ADEA laws are not easy to enforce – it's difficult to determine whether an older adult job applicant was as qualified as, or more qualified than, the younger applicant who was ultimately selected (Rix, 2011). The rare exception favoring older applicants seems to be for jobs considered stereotypically suitable for older adults. In one study (Perry, Kulik, & Bourhis, 1996), young adult business students expressed a positive attitude toward hiring older workers for jobs which at that time were considered well suited for older workers (selling stamps or coins), but they were less positive when the jobs were considered well suited for young workers (selling CDs). In some cases, older adults who are viewed as experts in a professional field may be in demand. For example, in the academic world it is not unusual for individuals in their 50s and even 60s to move to new colleges and universities for promotions or higher administrative positions. But for older individuals who are not established experts in select professions, being hired is not always easily accomplished, especially if they have lost their job in a recession and are trying to find a new one. In fact, older workers who lose their job are out of work longer than their younger counterparts, with an average duration of unemployment as long as 56 weeks as compared to 38.5 weeks for younger job-seekers (Rix, 2012).

The ADEA laws may be somewhat more effective when it comes to unfair treatment of older employees in the workplace. Employers cannot legally demote or terminate workers solely because of their age – rather, employers must show evidence that the older employee's work record is deficient, that the older employee's job has become obsolete, or that budgetary constraints necessitate letting an older employee go. Even so, the ADEA has not been successful in eradicating subtle forms of age discrimination such as denying older workers on-the-job opportunities or passing them over for promotions. But if older workers maintain careful records of their performance evaluations, those who think they have experienced age discrimination may be able to make a case for deserving something they did not get.

Nevertheless, in 2009, in the case of Gross v. FBL Financial Services, Inc., the U.S. Supreme Court narrowed some of the protections of the ADEA . The court ruled that the standards of the Civil Rights Act of 1964 did not apply to the ADEA. This means that if age is only one of several reasons for firing or demoting an employee, then the employer is acting within the law. In contrast to the situation with other types of discrimination, age must be the only reason for discrimination for the employee to win an age-based claim. As a result of this Supreme Court decision, legislation (the Protecting Older Workers Against Discrimination in the Workplace Act) was introduced in the Senate in March of 2012 that would make it “clear that when a victim shows discrimination was a ‘motivating factor' behind a decision, the burden is properly on the employer to show it complied with the law” (Senator Tom Harkin, 2012). Unfortunately, this law was not enacted (S. 2189, 2012). It failed at that time and was reintroduced on July 31, 2013 (Schuman, 2013, July 31). As of this writing, the 2009 Supreme Court decision holds: age discrimination is the only form of discrimination that has a special burden of proof; it must be the only reason for discrimination, rather than one of several reasons, in order for an employee to sue successfully.

The AARP (2012c) conducted a survey of 1,000 registered voters aged 50 and older to determine their attitudes toward age discrimination in the workplace and the then pending Protecting Older Workers Against Discrimination in the Workplace Act. Over one-third of those surveyed reported that they, or someone they knew, had in fact experienced age discrimination in the workplace. When they were provided a brief description of the 2009 Supreme Court case which makes it more difficult for older workers to make discrimination claims against employers, 81% of those surveyed believed it was important for Congress to take action to protect older workers.

In sum, the existence of the ADEA may be the reason for the myth that there is no age discrimination in the workplace. But age discrimination in hiring is difficult to monitor, and the fact is that older adults who lose their jobs are out of work for longer than are younger workers. Furthermore, the large number of age discrimination cases filed (though not necessarily won) by older plaintiffs, as well as the fact that many older adults think they or someone they know of have experienced age discrimination, testifies to the likelihood that many older workers are not leaving their jobs just because they want to (Sterns & Sterns, 1997).

Myth #31 Retirement is depressing, so older adults only retire when they are forced to do so

For most adults, work is an essential part of life. Until recently, this may have been more so for men than for women, because men were more likely to spend decades of uninterrupted participation in the workforce. It stands to reason that giving up the work role abruptly calls for some degree of adjustment. The opening scene in the movie About Schmidt, a 2002 comedy drama based on a 1996 novel, shows a large wall clock with a second hand moving to 5 p.m. on actor Jack Nicholson's last day of work. This scene is capped by a formal but dreary retirement dinner, a scenario sure to reinforce the myth that retirement is not a desirable event. But is retirement actually a traumatic event, and do older adults really suffer from depression when they retire?

Prior to the enactment of the Age Discrimination in Employment Act (ADEA) in 1967, mandatory retirement was the rule for most jobs – workers had to retire at a specific age, typically 65. In 1986, the ADEA was amended to cover workers with no upper age limit. The result was that mandatory retirement was eliminated for most workers. If older adults were anxious to keep working beyond the age of 65, it would have been reasonable to predict that once the ADEA was implemented, the median age of retirement would increase. Yet the median age of retirement dropped from approximately 67 in 1950–1955 to approximately 63 in 1985–1990 (Gendell & Siegel, 1996), indicating a trend for workers to leave the paid labor force at a younger age.

Admittedly, many factors influenced the decline in retirement age, an important one being the prevalence in those years of Defined Benefit (DB) retirement plans. DB plans typically pay retired workers a pension (often in the form of a monthly check) for the rest of their lives if they have worked for a company or institution for the required length of time. Workers often plan to retire as soon as they qualify for a pension from their employer and/or when they are eligible for early (though reduced) Social Security benefits at age 62.

So what about the percentage of older adults who are still working? In 1985, 15.8% of Americans aged 65 and older were in the paid labor force. By 2012, 18.5% of adults aged 65 were in the paid labor force (U.S. Department of Health and Human Services, Administration on Aging, Administration for Community Living, 2012). The increase from 15.8% in 1985 to 18.5% in 2012 demonstrates the reality that Americans are continuing to work to later ages.

What factors might lead to older workers' increased labor force participation? Recent years have seen a drastic decline in the number of employers offering DB retirement plans that guarantee a pension check for the life of the retiree. If anything, the retirement plans available to most workers are of the Defined Contribution (DC) variety, wherein both the employee and the employer make regular contributions that are invested and grow tax-free. With the recession that hit in 2008, pension plan investments lost value, thus causing the worth of most DC retirement plans to shrink. This meant that the pool of money which older retirees could count on once they left the paid labor force was considerably reduced. The overall effect of this downturn has been that many older workers are postponing retirement, because if they continue to work they are able to build their retirement investments back up. Also, more years of work mean fewer years in retirement during which retirement investments will have to be expended. In sum, economic factors are a likely reason that older adults are now remaining in the workforce for longer.

In earlier times, many companies offered workshops for employees approaching age 65 that encouraged them to develop hobbies or interests that would fill the void once they retired. In contrast, much of today's advice to individuals who are about to retire involves money management. (Financial factors are discussed in more detail in Myth #32.) Aside from monetary factors, however, the myth that retirement is depressing likely has its roots in the belief that separation from the work role is a traumatic event with negative emotional implications, because work plays such a prime role in the identity of many people.

An ideal way to study the emotional effects of retirement would be to follow the same people from the years prior to retirement to those following it. This type of research is not easy to accomplish, but Reitzes, Mutran, and Fernandez (1998) conducted a two-year longitudinal study, testing levels of self-esteem and depression in 757 male and female workers (83% European American, ranging in age from 58 to 64) every six months. During the course of the study, 299 workers made the transition to retirement but the rest continued to work full-time. For both groups, the level of self-esteem remained relatively stable over time. Also, counter to the myth that retirement is depressing, depression scores actually declined in the group that retired. Perhaps the retired individuals enjoyed some relief from work-related stress.

Although it may appear so, retirement is not a sudden event for many people. Based on over 5,000 responses of men and women aged 51 to 61 who participated in the 1992 Health and Retirement Survey, Ekerdt, DeViney, and Kosloski (1996) found that the older respondents in the sample were more likely than the younger ones to have retirement plans. Also the men (especially those who were married) were more likely than the women to have concrete plans as well as an actual target date for retirement.

According to Atchley (1994), there can be a lengthy remote pre-retirement phase, during which workers entertain fantasies and ideas about what they wish to do in retirement. This phase is followed by a more immediate pre-retirement phase, during which concrete plans are laid. The actual event of separation from the labor force may be followed by a honeymoon phase, during which new retirees travel or engage in other activities that they could not do while employed. After some time spent in the honeymoon phase, retirees may experience a degree of emotional let-down (disenchantment phase). However, most retirees then go through a reorientation phase, during which they make efforts to establish a stable day-to-day life in retirement. Trips and special activities may still be on the agenda, but the pace is less frenetic. Atchley contends that not everyone goes through every single retirement phase in sequence, but in general, retirement is a process that occurs over time.

Many older adults look forward to retirement after years of hard work. This is more likely the case for those who anticipate an adequate income once they retire. It's particularly applicable to men who have worked consistently and know that they will receive a comfortable pension and/or have been able to accumulate adequate savings. Older men who are married, especially if they have a high level of marital satisfaction, are the most likely group to have a planned retirement date (Reitzes, Mutran, & Fernandez, 1998). Women are less likely to have a concrete target retirement date, possibly because their work history is less consistent – they do not qualify for a pension, their pension will not be adequate once they exit the workplace, and/or they have not been able to build an adequate nest egg.

So what do people do once they retire? Do retirees spend the day lying in a hammock sipping an ice-cold drink? Some retirees strive for continuity; for example, professionals such as teachers, lawyers, and physicians often continue to identify with their professions even if they are not actively practicing them on a full-time or even a part-time basis.

Nowadays, however, many older adults who retired from full-time careers may be working at encore careers. A 2011 Metlife Foundation/Civic Ventures survey (combined telephone and online) of over 2,300 Americans aged 44 to 70 focused on the subject of encore careers. The authors of the survey posit that the way many people feel about their work changes after midlife, and they may be in search of a new kind of work that has deeper meaning than their first career. They want to focus on careers that provide purpose and passion but also a paycheck. Nearly a third of those surveyed viewed this next stage in their lives as a time to help others, but some saw it as a time to work just enough to cover expenses and maintain health insurance. Survey respondents who were currently in encore careers or interested in pursuing encore careers planned to work until an average age of 69.1 years and 68.6 years, respectively – 3.5 years longer than they had anticipated working a mere three years earlier. The majority (70%) of those pursuing an encore career wanted a personal stake in leaving the world better for future generations.

Retirees who do not work in paid jobs any longer often claim to be busier in retirement than they were when they were gainfully employed (Ekerdt, 1986). A sizeable proportion of older adults do volunteer work. Many retirees help out with grandchildren because their adult children have full-time jobs. For example, they pick up their grandchildren from school and care for them until the parents get home from work. Or they take care of grandchildren when schools are closed for vacation. Sadly, an increasing number of older retirees are actually raising grandchildren because of their own adult children's divorce, addiction, and so on (Hayslip & Kaminski, 2005). However, in a recent article in the New York Times, Korkki (2013, May 14) reports that some retirees opt to adopt children, some of whom are older or have special needs. Perhaps these retirees always wanted children but never had them, or they want to refill an empty nest now that they have the time and resources to enjoy doing so.

When contemplating what kind of life people will forge for themselves in retirement, we can revisit McCrae and Costa's (1987) Five-Factor Model of personality (NEO-AC: see Table 3.1), which we introduced in our discussion of Myth #17, “Older people are hypochondriacs.” According to this model, there is stability across the adult years on five factors of personality and the traits subsumed under each. For example, individuals high on the neuroticism (N) factor are more likely to experience anxiety and related difficulties both before and after retirement compared to those low on this factor. Those high on the extraversion (E) factor likely had jobs that involved interacting with people. Once retired, they will probably become involved in social activities and/or volunteer work that can satisfy the same needs.

Before leaving our discussion of this myth, we should keep in mind that there will always be individuals who love to work and do not want to retire. They like the structure of getting up each day and going to a job. Perhaps the job offers a social network they don't want to give up. If they can't work full time, they may find bridge jobs, which usually involve part-time employment, either in an occupation similar to what they had before or perhaps in an entirely new occupation. Bridge employment allows a gradual transition from full-time employment to retirement (Bowen et al., 2011). Also, bridge jobs allow people to supplement their Social Security checks before they give up paid work altogether. As noted earlier, some older adults launch encore careers, working in a different field from the one in which they had earlier spent years or decades. Others might want to retire but financially cannot afford to, so they must continue to work.

In sum, the evidence does not support the myth that retirement is depressing or that people only retire when they are forced to do so. Individuals who plan for retirement ahead of time, who are in reasonably good health, and who have adequate finances usually look forward to and enjoy retirement. Nevertheless, for people who are forced to retire due to poor health or perhaps because of downsizing, retirement is not voluntary and could well be associated with negative outcomes, both physically and psychologically.

Myth #32 Retired older adults are privileged financially

According to a Pew Research Center survey (2009), when asked to envision their lives after age 65, 67% of Americans (aged 18 to 64) anticipate that they will have more financial security than they do at present. The myth that older Americans are well-off may stem partly from the fact that they have “entitlements.” Another aspect of this myth is that retired older adults are in an improved financial position because they have fewer expenses than they did when they were younger and still working. For example, their dry cleaning bills are down and they save on fast food because they have time to cook.

Thanks in part to Social Security (enacted in 1935) and Medicare (enacted in 1965), older adults as a group do enjoy a better standard of living today compared to earlier times. Those who reach a certain age and have worked for the required amount of time are eligible for Social Security benefit checks for the rest of their lives (an entitlement that younger generations fear will not be available to them). Originally, the age required for the full Social Security benefits was 65, but a Social Security Amendment passed in 1983 gradually raised the age of eligibility for full retirement benefits starting with people born after 1938. With this amendment, the age of eligibility for full benefits reached 66 for people born between 1943 and 1954. For people born after 1959, the age for full benefits will be 67. These increases in age of eligibility for full benefits addressed a growing concern about a possible shortage of funds and also took into account the improved health and longer average life expectancy of older Americans. The debate about whether to increase the age yet again is ongoing at the time of this writing.

There's little doubt that Social Security is an important factor in the decline in poverty rate among older adults, which was 35% in 1959 but only 8.7% by 2011. However, an additional 2.4 million, or 5.8% of the elderly, were classified as “near-poor,” meaning that their incomes were less than 125% of the poverty level (U.S. Department of Health and Human Services, Administration on Aging, Administration for Community Living, 2012).

Social Security was never intended to replace 100% of working income. Rather, it was meant to serve as a financial cushion – a base level of economic security – for retired older Americans. Even so, as of 2010, 86% of older adults reported that Social Security was their major source of income (U.S. Department of Health and Human Services, Administration on Aging, Administration for Community Living, 2012).

In 2011, the median income for older Americans was $19,929–$27,707 for men and $15,362 for women (U.S. Department of Health and Human Services, Administration on Aging, Administration for Community Living, 2012). Living arrangements are an important factor when it comes to poverty, and older persons living alone were more likely to be poor (16.5%) than older persons living with families (5%). With regard to gender, 36% of women aged 65+ live alone, but only 19% of older men live alone; 72% of men live with a spouse, but only 46% of women live with one (U.S. Department of Health and Human Services, Administration on Aging, Administration for Community Living, 2012). So it should not be surprising that older women had a higher poverty rate (10.7%) than older men (6.2%).

Medicare is another entitlement available to individuals once they reach age 65. While working, employees pay a Medicare tax as well as a Social Security tax. When they reach age 65 they qualify for Medicare health insurance if they have worked and paid the Medicare tax for the required amount of time. Medicare Part A is free and covers many hospitalization costs, brief stays in a skilled nursing home, and short-term home health care following a hospital stay. Medicare Part B covers approximately 80% of health costs such as physicians' fees, laboratory tests, physical therapy, and some medical equipment. Medicare Part B is not free – the premiums are based on the older adults' income from all sources, even including earnings from tax-free municipal bonds.

Medicare has been under the gun lately, but it is an important reason for today's lower rate of poverty among older adults. However, it is important to keep in mind that Medicare Part B does have deductibles and co-payments even for covered services. For this reason, older adults who retire and are no longer covered under employer-sponsored health insurance usually purchase medi-gap insurance from private insurance companies so they will be fully covered for expenses not covered by Medicare Part B. Such policies can be costly and may not be affordable for all older retirees.

Some people mistakenly assume that Medicare will cover the expense of assisted living facilities and nursing homes if there comes a time when older adults need it. In reality, Medicare may cover brief nursing home stays following hospitalization, but it does not cover the cost of assisted living facilities or long stays in nursing homes. Long-term care insurance is often recommended to cover such costs. However, this type of insurance is costly (it can run into thousands of dollars a year), especially if purchased late in life, so it may be out of reach for many older Americans.

Given the high cost of assisted living and long-term stays in nursing homes, those who have not purchased long-term care insurance but now need these services are typically forced to “spend down” to deplete their savings so they can qualify for Medicaid. The reason for this is that Medicaid is a means-tested government program (meaning that to qualify for coverage, individuals must fall below a certain income level and can have only limited savings and personal property) that will cover medical expenses and long-term stays in nursing homes. Some people think older adults give money and property away to family members so they can qualify for Medicaid and thus be covered for long-term stays in nursing homes. Nevertheless, individuals, including family members, who have accepted monetary gifts from older adult Medicaid applicants within the past five years will be asked to return them.

In addition to the health-related expenses already mentioned, the cost of prescription (and possibly nonprescription) medications increases as people get older. The relatively recent Medicare Part D plan covers certain costs of prescription drugs but these are by no means free. The Medicare Part D premium varies depending on the specific plan an older adult selects. With Medicare Part D, not all medications are covered and there are co-payments for medications that are covered. Also, dental costs are not covered by Medicare or medi-gap policies, and the dental insurance policies available to retirees are usually expensive and very limited in coverage.

Overall, Social Security and Medicare have been successful in reducing the poverty rate among the older population, but do they free older adults from financial worries? To maintain a lifestyle close to what they had before retirement, older adults will need income in addition to Social Security. Also, if older adults do not want to incur medical expenses beyond what they can afford, they will need to purchase health insurance in addition to Medicare.

What about the assumption that the income people need once they retire is far less than what they required during their working years? It is true that items such as clothing and commuting costs will probably decline in retirement. Nevertheless, the total income people need in their retirement years is unlikely to decrease; in fact, it will probably increase. The most obvious reason for this increase is the cost of health care, as mentioned above. Health insurance costs increase for older adults who had subsidized insurance from an employer while they were still working. In some instances, retired employees may be able to keep their employer's health insurance, but usually they have to pay much more for it once they leave full-time employment.

Another item that increases in retirement is discretionary spending for things such as travel, hobbies, gifts, and entertainment. During their full-time work careers, many older adults dreamed of a life with sufficient income for these items, which may fall into the nonessential category but definitely add to the allure of having more leisure time. It may come as an unpleasant surprise to older retirees when they learn that the budget for such items will have to be severely curtailed so that they can afford essential expenses for food, housing, utilities, medical care, and taxes.

If older adults want to maintain a standard of living close to what they had while working, they will need a nest egg of savings that is sufficient to last throughout the years of retirement. There are many financial ideas on how best to ensure that retired individuals do not outlive their savings (see e.g. Quinn, 2013). Unfortunately, projections based on available figures for individuals approaching retirement indicate that the majority have nowhere close to the savings they will need even for the near-term, let alone for the decades that lie ahead.

Many older adults who retire were counting on their homestead to provide the nest egg they would need to supplement their Social Security benefits. Perhaps they planned to downsize from a large home to a smaller one, thus realizing extra cash to generate additional income once they left the workforce. Unfortunately, many locales have seen a decline in the value of the large homes that many retirees were counting on for extra income, and it may be difficult or impossible to sell those homes. Nevertheless, if older adults did not use their home equity as a piggy bank during the “go-go” years, they may be able to keep living in the same home without a mortgage, assuming they can afford the upkeep, and also provided that the home continues to provide a safe environment for them in their later years. It can be helpful that some states and counties make property tax allowances for retirees. Assuming housing prices recover (and they are already doing so in some areas), future retirees may be in a better position to use their homes as a nest egg, but this source of savings is no longer the safe haven it once was.

Related to the present discussion is a myth touched upon elsewhere (Myth #18) – that older adults are stingy and viewed as “greedy geezers.” As we mentioned earlier, but it bears repeating here, many older adults provide financial help to adult children and grandchildren. Indeed, many older adults provide not only monetary help, but also housing and other types of support for adult children who have their lost jobs but have not found new ones that pay enough for them to adequately support their households. In fact, there is often more support going from the older to the younger generation than in the opposite direction (Fingerman & Birditt, 2011). This situation often continues until very late older adulthood, at which point people may begin to have health problems that affect how much support they are able to provide for the younger generation.

In sum, older adults who have worked for a sufficient amount of time are usually eligible for entitlements such as Social Security and Medicare. These entitlements provide a financial cushion, but they don't ensure a comfortable or carefree retirement. Given the economic turmoil of recent years, it's not surprising that we now hear much less about the importance of developing hobbies prior to retirement. Rather, we hear more about strategies for accumulating savings during the working years and preserving them once we retire so that we can approximate our pre-retirement lifestyle, or at the minimum just stay financially afloat.

Myth #33 After they retire, older folks want to move to where it's warm

A prevalent myth is that just as soon as they retire, older adults head in droves to warmer climates where they live out their days in the sun. Fueling this myth is visible evidence for the construction of numerous retirement communities and condominiums in states such as Florida, Arizona, and North Carolina. In many areas, new communities with multiple senior living units and developments have created an economic boom because the expanding population of older retirees calls for shops, car dealerships, and all the other services necessary to support everyday living.

It is certainly the case that some retirees migrate to warmer climates, and their numbers are sufficiently large that it may appear to casual observers that all older adults are making long-distance moves. In reality, only a small percentage of older adults move to new communities (regardless of climate) when they retire, and an even smaller percentage relocate across state lines. The majority of older adults “age in place,” meaning that they continue to live in the same locale and often in the same house where they resided prior to retirement.

Stoller and Longino (2001) studied the migration patterns of older adults who relocate to the Sunbelt once they retire. They found that this type of long-distance migration typically occurs among the young-old (65–74) age group, when individuals (often married couples) are in relatively good health, have adequate financial resources, and are able to enjoy the amenities offered by retirement communities. However, Stoller and Longino also noted a trend among people in old-old (75–84) age group to migrate in the reverse direction – from the Sunbelt back to the Frost Belt. The reasons for this outmigration were that by their mid- to late 70s, many individuals had become widowed and were beginning to experience moderate physical and/or cognitive difficulties. They were moving back to their home states to be closer to family members, including adult children.

The Urban Land Institute has produced a report on where people over the age of 65 are living now and also where they are expected to be living in the foreseeable future (McIlwain, 2012). Rather than refer to the young-old and old-old, the report distinguishes among groups by cohort as follows: the Greatest Generation (born between 1901 and 1927), the Silent Generation (born between 1928 and 1945), and the Leading-Edge Boomers (born between 1946 and 1956). The report notes that the Leading-Edge Boomers are unique in that they are in better health than earlier generations were. They are expected to be active and productive for many years into the future. Furthermore, as we have noted elsewhere, those who fall into the Leading-Edge Boomer category have recently experienced an economic crisis. They tend to have less money saved for retirement and greater debt than did people in earlier generations when they were that age. It is expected that Leading-Edge Boomers will have to work longer than earlier generations did. Thus, it may well take an extra decade before they are ready to retire and possibly move into housing communities designed for older adults. This report predicts that the recent recession will slow any existing migration to the South and West. The housing crisis has trapped those in the Leading-Edge Boomer generation in their suburban communities, where they are unable to sell their homes. As a result, some of these suburban areas are becoming naturally occurring retirement communities.

In sum, it has always been the case that a relatively small percentage of older retirees uproot themselves to move across state lines in order to settle in milder climates. With the recent economic recession, however, this percentage is expected to be even lower. Even so, in today's world, it's likely that their adult children may not remain in the area where they grew up. In some cases, older retirees relocate to geographical areas that are not necessarily warm, but where an adult child has made his or her home.