It’s estimated that 10,000 baby boomers reach retirement age every day. While age may be a commonality among this group, how they choose to spend their free time may be quite different. Certainly, some retirees stick to the traditional archetypes: The Leisure Lover who naps, reads and strolls the beach; the Golfer who can’t wait to hit the next birdie; the Matriarch/Patriarch who wants to spend time with family; or the Gardener who cultivates beauty at home. However, a trend is emerging among today’s retirees: They wish to forge new identities and seek new experiences, and they’re redefining how they spend their time and money.
Read on to see if one or more of these new retiree profiles resonates with you. No matter where you land, having a good idea of how you’ll keep busy when the 9-to-5 is no longer part of your routine can go a long way toward helping you plan and save for the retirement you want.
The Thinker has a deep desire for lifelong learning. They are more likely to retire in a college town, take classes, read for pleasure and engage in contemplative activities. They’re motivated to explore new ideas, languages, instruments or hobbies. Thinkers hope to feast on a lifetime of intellectual engagement, interacting with top researchers, professors and students from all walks of life.
The good news is countless colleges and universities are designing courses aimed at this new senior class. Many are affiliated with the Osher Lifelong Learning Institute that offers non-credit programs for those 50 and older. Campuses can be found in areas with affordable housing, quality education and teaching opportunities, strong job markets, walking and biking trails, excellent transportation and healthcare, as well as a variety of entertainment options.
NOTE: If you’ve established a 529 plan for a child or grandchild, you may be able to use unneeded funds for your own continuing education. Talk with your financial advisor about withdrawing funds without facing penalties.
Cognitively active people are 2.6 times less likely to develop dementia or Alzheimer’s.
Also known as the Volunteer or Caring Contributor, the Giver is motivated by a desire to give back to their community or a worthy cause. They contribute time, talent, and, yes, even their money to support causes close to their hearts. While the typical American spends 20 minutes a day engaged in volunteer, civic or religious activities, the Giver over age 65 will dedicate a half hour or more, according to the Bureau of Labor Statistics.
Giving back comes in a variety of forms that could appeal to just about anyone. For example, one retiree may use her musical talents to play the violin for hospital patients, while another prefers to work behind the scenes updating a nonprofit’s website. Either way, it’s about making a meaningful difference. The work in itself is its own reward.
NOTE: Givers may become too altruistic, spending more time and money than they planned for, which can undermine their health or financial stability.
Caring Contributors represent 33% of working retirees. More than a quarter are unpaid.
The Entrepreneur typically seeks to start a business that’s differentiated from a past career. They want time to explore something new or pursue a long-held passion placed on the back burner. In fact, folks in their 50s and 60s often are very successful entrepreneurs. They bring decades of experience, success, passion and emotional intelligence to their new ventures.
The Entrepreneur seeks a fulfilling career, increased flexibility and enjoyment in their work. The goal for some is to begin a new endeavor which ultimately becomes self-sustaining, allowing for work/life balance.
NOTE: Starting a small business entails a business plan, startup costs, insurance and a financial plan that accounts for your professional and personal finances. It’s a good idea to work with a professional tax planner and financial advisor as you begin researching and building your new venture.
While the Traveler is a traditional retiree stereotype, the Explorer is willing to dedicate up to a quarter of their financial resources on travel. These globetrotters invest in experiences and are willing to indulge their wanderlust while they have the health, energy and resources to do so. Explorers may have traveled their entire lives and wish to continue the adventure.
Another characteristic? Good saving habits. Explorers are focused on their long-term goals to travel and are prepared to save to reach their destination. They desire immersing themselves among other cultures, foods and languages – and relish these experiences.
NOTE: Planning should account for ongoing travel expenses, factoring in desired location, frequency and duration, as well as inflation and foreign exchange rates. Health-related issues may become a limitation to extensive travel in later years.
There are just as many Explorers over age 75 as there are among younger groups.
The Part-Timer, like the Entrepreneur, seeks a career change, either in the same field with reduced hours or in a new industry. They may not wish to commit to a full-time position, yet get satisfaction and a sense of identity from working.
Some Part-Timers favor mini-retirements – periods of work followed by intermissions for relaxation. Think consulting and contracting, for example. A Part-Timer may work 20 hours a week or full-time for a few years, save along the way and then spend the next couple of years traveling. They, too, seek work/life balance that allows them to capitalize on their inherent talents yet doesn’t impede on leisure time.
NOTE: Returning to work, even part time, requires a look at expenses such as new work attire, transportation and dining out. You’ll also want to evaluate the impact of additional income on your current tax bracket, Social Security benefits, healthcare coverage, and potential contributions to your retirement plans.
There are more than 7.1 million Part-Timers age 55 or older.
Many of us enjoy a well-prepared meal and sharing it with others. Foodie retirees prefer quality dining, spending more time enjoying the experience of the meal and their company. Foodies typically spend about an hour and 20 minutes when dining, relishing how food and drink awakens the senses and increases their quality of life. Whether experimenting with new creations, introducing new flavors or bringing friends and family together, Foodies turn culinary experiences into meaningful opportunities to indulge the senses. It helps that both taste and smell help create delicious memories.
Another benefit? Since the Foodie spends time shopping for ingredients and preparing meals, other expenses are typically lower than peers who dine out more often.
NOTE: Retirement plans for food connoisseurs should factor in healthcare costs and inflation, as well as utilities and transportation.
Foodies spend, on average 28% of their income in the food and beverage category.
The Homebody embodies several traditional archetypes (i.e., the Gardener, the Leisure Lover and the Matriarch/Patriarch). They enjoy spending time with loved ones, tending to gardens, watching television, reading, cooking and making home improvements. Homebodies prefer to spend time and money on their homes, which are a source of pride and comfort.
Homebodies – like most retirees – want to live independently at home for as long as possible. To do so may require renovations to accommodate changing mobility and accessibility needs, such as adding safety bars to a bathroom or widening doorways.
Ongoing real estate taxes, mortgage payments, insurance, maintenance and renovations are major planning items. Homebodies also should develop a list of reliable providers and a realistic estimate of costs for home services, repairs and maintenance. This type of retiree should examine current housing expenses as well as anticipated needs, including the possibility of downsizing. Because housing accounts for the largest percentage of retirees’ expenses, it is vital to get this number right and plan accordingly.
People ages 65 to 74 spend nearly 2.5 hours per day on household activities.
Americans are living longer thanks to advances in healthcare and greater awareness about healthful living. The Athletes are competing in triathlons, climbing mountains or playing tennis into their 60s, 70s, 80s and beyond. Age is just a number for these folks; they’re inspired to keep in top form – physically and mentally – and enjoy training and competition.
But even with warmups, stretches and consistent practice, chances are even the healthiest Athlete will slow down at some point or face sudden illness or injury. And healthcare costs can account for a significant share of retirement income, whether in the form of Medicare expenses, prescriptions or long-term care needs.
For Athletes, it’s important to budget for proper equipment and training. That goes hand in hand with selecting an appropriate Medicare or healthcare policy and accounting for potential healthcare expenses that aren’t covered, which is vital for all retirees. Be sure to factor in inflation, as well as the potential for long-term care or assisted living.
Sources: Journal of Financial Planning: “How retirees spend their time”; Bureau of Labor Statistics; Robert S. Wilson, Ph.D., Rush Alzheimer’s Disease Center; Work in Retirement: Myths and Motivation; J.P. Morgan “Cost of Waiting” study; President’s Council on Fitness, Sports & Nutrition