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06.08
Life After
Work: A Former IEEE Staffer's Take on "The Good
Life" — Retiring At 60
By Pender
M. McCArter
Before you have
retired, you should be able to answer without
hesitation: “What do you do?” You might
say “I do a lot of things,” and then (assuming
your questioner is interested in more than what
you can do to help him or her), launch
into your laundry list of new activities in
retirement.
I usually begin
with the answer that I retired as public
relations director of IEEE-USA after a 40-year
career in education, journalism and public
relations. Then, I go on to describe my new
consulting duties at IEEE-USA — coming into the
office
two days a week to work on projects designed to
promote engineering awareness.
And, most
important, I add that my new routine allows me
to do many more things such as taking art
history classes; learning about opera; going to
the theatre; volunteering with my alma mater and
professional societies; and fitting in regular
exercise. I’ve also appreciated the extra time
to visit my sister in Richmond and nephew in
Arlington, as well as to provide moral support
to my long-time friend’s and former companion’s
family, whose mother is suffering from
Alzheimer’s.
In addition, last
year, I enjoyed travel to San Miguel de Allende,
the 16th century colonial Mexican town, where my
cousin and his wife live, and I indulged my
interest in photography on the festival known as
“Day of the Dead”. (See photo of San Miguel
cityscape.) I’m also looking forward to a trip
to Paris in the fall to represent the
International PR Association at the 61st Annual
United Nations Department of Public Information
Non-Governmental Organizations Annual Conference
on the 60th anniversary of the Declaration of
Human Rights at UNESCO.
San Miguel de Allende
architecture
Laying the
Groundwork
I began thinking
about early retirement several years before I
turned 55 in September 2001. I remember making
lists of what I would like to do in retirement.
I even tried out a volunteer activity that I
thought I could add to my routine, talking with
elderly residents at a nearby nursing home. (I
must say this experience, at least at this
particular nursing home, was so upsetting that I
realized it would not be realistic for me to
volunteer there for a long period of time. So, for the last 10 years,
I have assisted with a monthly
soup kitchen at a nearby church.)
Over the same time
period, I took advantage of various calculator
programs and financial checkups provided by T.
Rowe Price. In 2000, I sat down with a financial
adviser who encouraged me to think about early
retirement. But I didn’t feel it was the right
time for me professionally or practically.
I was
glad I held off. Friends and colleagues in other
organizations who retired at 55 regretted their
decision after the dot.com bust of 2001.
From 2001-2006, I continued to add to my list of
things I wanted to do and to refine my financial
estimates with retirement advisers. To help me
plan, I also returned regularly to dog-eared
copies of IEEE-USA’s Ten Tax-Favored Ways for
Saving for Retirement. I went right to the
wire on whether to take the IEEE defined-benefit
plan in a lump sum or as an annuity.
With my
conservative bent, I was glad I opted for the
annuity. And with other savings invested in the
stock market, I don’t worry as much as I might
about my nest egg lasting another 20-30 years.
One regret: I wish I had looked more
closely at charitable annuities, which provide a
monthly payment to the annuity holder, and on the
holder’s death return the principal to a
charity.
One rule of thumb
on what percentage of your income to invest in
the stock market: subtract your age from 100,
and the difference is a recommended percentage
to invest in the stock market. Investment
companies (that can benefit) and retirement
advisers (who may not) suggest that retirees
should reserve a large portion of their savings
for the stock market, since they will need to
stretch their money over a long time. And we
know inflation can be cruel. A case in point:
my last car, a 1976 Rabbit, cost $4,200. More
than 30 years later, I’ve just replaced a heat
pump and air handler for $6,200.
Beginning in 2001,
I started thinking about whether I wanted to
remain in Washington and looked into retirement
cities such as Tucson and Asheville, NC. I made
several trips to Asheville during the five years
before I retired, and came close to buying a
duplex in West Asheville. My plan was to try out
a second home on long trips before eventually
moving to the “Land of the Sky.” In the end, I
wasn’t sure that I wanted to live in Asheville
year-round. And I thought it would be prudent to
try out my “retirement legs” in Washington
before making this commitment.
Several months
before I announced my plans to retire, I met
Nancy Schlossberg, the
author of Retire Smart, Retire Happy,
who interviewed me and
incorporated some of my experiences in a revised
version of her book. In a draft of the new book,
Nancy wrote that my “planning paid off. Life was
not perfect; it was full of ambivalence, but
[Pender] was working on making it a fulfilling
situation.” She lists three reasons why it is
hard for individuals to plan for retirement:
“Their energy is in the present and not the
future; they deny that retirement is a major set
of transitions; and they are unable to engage in
forecasting the future with any degree of
accuracy.”
Getting My
Retirement Legs
I’m glad I decided
to stay in DC. My condo is within 10 blocks of
the White House, the European Union,
Congressional Quarterly, Embassy Row, and
the home where Duke Ellington was born. I walk
everywhere from my condo: to the Kennedy Center,
the National Gallery, the Capitol, even across
four different bridges taking different routes
to Arlington. I bike along the Rock Creek
Parkway and the C&O Canal. In the last 18
months, I’ve gone to the Petraeus congressional
hearings on Iraq, marched on Pennsylvania Avenue
in support of the DC right to vote, and joined
crowds watching the arrival of the Queen of
England and Pope Benedict.
I’m fortunate to
have bought my condo in 1986. While it seemed
expensive to me 22 years ago, it’s probably the
most reasonable housing I could find almost
anywhere. And I wouldn’t be able to afford my
West End neighborhood at today’s prices! With
Chris Brantley, my employer, I’ve been fortunate
to work out twice-a-week consulting at IEEE-USA.
I find this arrangement provides an anchor in my
new routine and helps me to continue to save in an
unpredictable economy.
Making it to
Medicare
As part of my
planning for early retirement, I projected costs
for 18 months of IEEE medical insurance under
COBRA, followed by 33 months of private medical
insurance, before reaching Medicare age of 65.
Since the beginning of my retirement, but most
actively for the last few months, I’ve been
researching private medical insurance. Given all
that we know about the high cost of medical care
and insurance, it should come as no surprise
that insurance is going to be expensive. But it
surprises.
For example,
continuing my IEEE employee’s coverage for 18
months under COBRA ran around $700 a month. And
I could maintain my IEEE policy as a private
policy after COBRA runs out for only $2,800 to $3,800
a month!
After speaking with
CareFirst BlueCross BlueShield agents, reviewing written
materials, and studying the literature on the
Web, I chose a policy underwritten by BlueCross
BlueShield with a deductible of $1,200 in
network and $2,400 out of network. This
insurance, at a cost of $275 monthly, provides
for one doctor’s checkup a year. Costs for all
other doctors’ visits are applied to the
deductible. The same $1,200 deductible must be
met for prescriptions. I find this insurance is good
for early retirees who are seeking to insure
themselves against bankruptcy from catastrophic
illness.
On the
recommendation of Larry Grogan, who assists IEEE
members with retirement planning, I chose to
file my insurance application through e-Health.
I found the agents to be well informed, perhaps
even more than the insurance plan company
employees. A public-relations colleague who
works with an HMO assured me of her company’s
good experiences with e-Health. The e-service
sells insurance at no markup and also
expedites applications in as little as two
weeks, compared with BlueCross BlueShield’s
four-to-six-weeks timing — even when filing
online.
After Reaching
Medicare Age
As I look ahead to
Medicare in three years, when I’m 65, I realize
that I’m still going to have to save for medical
costs. For example, my internist — whom I’ve
used for almost 15 years, does not accept
Medicare payments. Even if I find another
doctor, like other retirees, I will have to pay
higher deductibles on Medicare benefits and
higher taxes on Social Security payments. Since
2000, AARP reports, monthly Medicare premiums
have more than doubled. And national healthcare
costs have increased at twice the value of
inflation since 2005.
I’ve been
considering holding off on taking my Social
Security payments until my full retirement age
of 66. There are strong incentives to encourage
this postponement with penalties for outside
earnings exceeding a threshold (now about
$13,500) before full retirement age.
Further, the amount
of monthly Social Security payments is scaled
back from age 62, when retirees can begin
receiving payments, until they reach full
retirement age. I’m tempted to start Social
Security early, as the first Baby Boomers have
done since January 2008, but I’m reasonably
confident that our lawmakers will fund the
insurance program — if not exactly as promised.
I’m more concerned
about how well our system provides health care
to those without insurance, early retirees, and
those who depend on Medicare — not to mention
the retirees of the future, like my 20-something
niece and nephew, who don’t have defined benefit
plans.
Time to Live it
Up?
If you do your
homework and can be realistic about what life is
like without going to work every day, retirement
(and early retirement) could be for you. I’m
glad to be working to live and not living to
work. As an ad for one investment company
proclaims, “It’s your time to live the
retirement you’re ready for. Lucky you!” And
good luck to you! Take a deep breath and,
as one writer has observed, see how much more of
the future we can inhale.
In 2007, Pender M. McCarter
was appointed senior public-relations counselor
at IEEE-USA in Washington. Prior to his
retirement from the IEEE in 2006, McCarter was
employed from 1981-1994 as IEEE PR Manager; and
from 1994-2006 as IEEE-USA PR Manager, IEEE-USA
Associate Director of Communications & PR, and
IEEE-USA Director of Communications & PR.
During this 25-year period,
he helped fashion a new image and identity for
IEEE-USA to communicate to the organization’s
publics, both in and outside of government; as
well as promoted technological literacy, public
understanding of engineering, and increased
diversity in the engineering profession. If you
would like to read more about McCarter’s
transition to retirement, see
http://www.ieeeusa.org/communications/notable/11-03-06.asp.
Opinions expressed are the
author's.
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