Retirement Recap

FIRE and Other Big Retirement Trends of 2018

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Retirement Recap


Retirement plans evolve with your needs, which means the planning as a whole shifts consistently based on the needs of retirees. In 2018, retirement didn't necessarily entail owning a home, spending a lot of time on land, or even taking it particularly easy and spending the money accumulated over decades. We took a look back and found a number of examples of how retirement and retirement planning changed this year, and what those changes might mean for you.

The Fire Movement


Vicki Robin wrote “Your Money or Your Life” in 1992, but the 72-year-old gained new notoriety a generation later for touting the merits of living beneath your means. Called FIRE — an acronym for “financial independence, retire early” — it challenges adherents to track down to the penny where their money goes. If the return doesn't outperform a low-cost mutual fund, exchange-traded fund, or real estate, they're encouraged to reconsider. Buying a three-bedroom home can bring enough rental income from two units to cover mortgage costs, for instance, which ideally leaves more to invest and shortens a retirement timetable. The approach requires a lot of privilege and comes with some burnout, but success stories tout retirees as young as 26 to 41.

Regrets, We Have A Few


FIRE's extreme frugality many not work for everyone, but people planning for retirement often wish they'd saved a bit more. Charles Schwab surveyed 401(k) participants nationwide and found saving is still the top source of financial stress, well ahead of paying off credit card debt and keeping up with monthly expenses. In fact, two-thirds of participants (64 percent) wish they’d spent less in the past to save more for retirement, especially on short-term pleasures such as meals out, expensive clothing, new cars, and vacations.

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Backbone Of The Industry


Management occupations remain the safest of bets for Americans aged 65 and older, employing the most seniors of any sector and jumping 31 percent from 2006 to the time the U.S. Bureau of Labor Statistics reported data in 2016. (Still, seniors make up just 8.2 percent of that giant sector, while at just 293,000 people, roughly 30 percent of farmers are over age 65.)

Delayed Retirement


Full-time senior workers are part of a trend that's been steady for nearly 30 years. The percentage of workers expecting to delay retirement to after 65 more than tripled to 37 percent in 2016 from from 11 percent in 1991, according to data from the Employee Benefit Research Institute. Within a generation, the likelihood of retiring late has nearly doubled.

Employer-Plan Embrace


Participation in employer-offered defined contribution retirement plans — 401(k)s, 403(b)s, and the like — has jumped to 69.5 percent from 64.2 percent since 2007. But you can thank retirement plans with automatic enrollment: Among employers who don't offer auto-enrollment, participation has dropped to just 50.2 from 57.8 percent over the past decade, Fidelity points out.

Don't Put Off Saving for Retirement


Those who haven't opted out of an employer's 401(k) or other defined contribution plan are saving more than ever. Since 2010, Fidelity says the contribution rate (including employer matching contributions) has increased to 13.2 percent from 11.8 of employee salaries. That's still beneath the ideal rate of 15 percent, but it's closer.

Senior Living At Sea


Retire at sea? While the cost of retiring on land can be $1,500 to $10,000 monthly, or anywhere from $27,000 to $120,000 annually, cruises that cost less than $100 nightly can come out to about $2,800 a month. Programs including Holland America's Senior Living at Sea and the luxurious World Residences at Sea can help, but cramped cabins, limited health care options, storage fees, and the cost of managing affairs on land (including taxes and real estate) present downsides. It's more expensive than a retirement community, but it's tougher to see the world from Shady Pines.

Renewed Confidence In Savings


Today, 54 percent of U.S. workers have enough faith in their savings to start making plans to retire, human resources site Workforce says. That represents something of a recovery: Back in 2002, that figure was 59 percent of workers, but during the recession in 2009 that percentage dipped to 41 percent before bottoming out at 38 percent in 2012.

New York City


Nearly one-third of tenant applications in cities are for tenants older than 60, says AARP, with data from property management software company DataCloud. In downtown Detroit, Boston, and Portland, Oregon, you're far more likely to find retirees going from their doorman building to a restaurant or theater than you are to find a graphic designer on a motorized scooter heading to a coffee shop. The draw of dense, walkable neighborhoods isn't universal, but there's a large brood of baby boomers who get it.

They're Less Likely to Talk About It


Couples have distinct ideas about retirement and haven't been communicating them. More than 2 in 5 disagree about their partner’s expected retirement age and more than half argue how much they need to save. This includes 33 percent of baby boomers heading into retirement, Fidelity Investments says.

Be Realistic


The average American's retirement plan has $102,900 in it, according to Fidelity. That's up 17 percent from 2013 and a 62 percent improvement over the past decade. While newer, automatically enrolled employees often contribute less, workers who've been contributing for 15 years or more have $379,600 stored away. About 70 percent of that growth can be attributed to market forces, but extra savings hasn't hurt.



Golf and shuffleboard don't make the Top 10 activities for people 65 and older put out by the Physical Activity Council, though birdwatching, wildlife viewing, and fishing are at the top of the list with working out, swimming, bicycling, and hiking, and camping and fitness classes are not far behind. In fact, 60 percent of baby boomers participated in fitness activities, with 39 percent active in outdoor sports.

What if the RV Breaks Down


Some 1 million Americans have chosen to spend part or all of their retirement on the road in an RV. Though small motor homes can cost $40,000 to $60,000, bus-sized models with apartment-style space can range from $250,000 to $1 million. A travel trailer can cost $10,000 or less, but consider if you still have stuff to store or a home to maintain and gas costs, living expenses, and income concerns. Do your homework, plot your route, see if you'll need to take extra work, and be prepared to pump out your own waste. You can always rent an RV and do a test run before making a decision.

Panarea, Italy
Millionaire Calculator


The number of people with $1 million or more in a 401(k) increased to 187,400 at the end of the third quarter of 2018, up 41 percent from the 133,000 seen last year and nearly 10 times the 19,300 savers from 2008, Fidelity says. The number of IRA millionaires, meanwhile, hit 170,400, up 25 percent over a year ago. The market had a lot to do with that: Among participants who have been in their 401(k) plan for 10 years straight, the average balance reached $305,400, nearly five times the average balance of $65,700 for that group 10 years ago.

Optimize Retirement Contributions


Fewer retirement-plan participants are taking loans from their 401(k) or other plans, Fidelity notes. In the past four years, enrollees with outstanding loans against their plan dropped to 20.6 percent from 22.3 percent. While taking out a 401(k) loan at 5 percent interest to get rid of credit card debt at 24 percent interest may have merit, financial planner Matthew Frankel says, “your retirement funds have higher return potential if they're left alone invested in your account.”

Early Distribution from 401k


It's a terrible trend, but a trend nonetheless: 35 percent of retirement plan participants cash out their accounts when switching jobs, according to Fidelity. Among 20- to 29-year-olds, the cash-out rate is 41 percent despite taxes and an early withdrawal penalty that will reduce $20,000 to $13,600 — and that's only if you're in the 22 percent bracket and your state has no income tax. “If you were to leave the $20,000 invested,” Frankel says, “It could grow to more than $213,000 by the time you're 65 and ready to retire.”

Unhealthy Retirement


Between 1992 and 2010, the percentage of adults ages 51 to 54 who reported fair or poor health grew to 22 percent from 17 percent. That's a big step back from the previous generation, in which adults ages 80 and older in fair or poor health dropped to 34 percent from 43 percent from 1998 and 2012, the Urban Institute says. What’s to blame? More people diagnosed with diabetes, thanks largely to high-fat, junk-food-heavy diets and rising obesity rates.

Ocean View House, Isumi, Japan
Courtesy of


We aren't saying thatretirement downsizing isn't still a trend. More than half of retirees who move still move into homes smaller than the one they owned, Merrill Lynch and Age Wave have reported. But more retirees (30 percent) actually upsize their home after retirement than live in a home the same size as the one they owned before (19 percent). The big homes encourage family members to visit and transform a house “from an “empty nest” to a “welcome home.”

Be Careful Not to Spend it All
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Nearly two in five (39 percent) U.S. retirees spend more than they expected to, Global Atlantic Financial Group finds. This is somewhat surprising, as the typical non-retired U.S. consumer over 40 spends $2,993 a month and the typical retiree spends 32 percent less ($2,008). The most common areas where retirees spend less include expenses such as entertainment (29 percent less), dining out or restaurant takeout (24 percent less), traveling (18 percent less), and housing (23 percent less on mortgage payments, and 22 percent less on rent). Those cuts may not be by choice: More than half (55 percent) of retirees have retirement planning regrets including not saving enough (36 percent), relying too much on Social Security (20 percent), and not paying down debt before retiring (12 percent).

Reveal Location Of Financial Documents


Parents now spend $500 billion annually on adult children — twice the amount they contribute each year to their own retirement accounts, Merrill Lynch and Age Wave find. Roughly 72 percent of parents say they’ve put their children’s interests ahead of their own need to save for retirement and 63 percent report having sacrificed their financial security for the sake of their children. The 79 percent of parents who give at least some financial support to adult children pay for food (60 percent), phone service (54 percent), car expenses (47 percent), school (44 percent), vacations (44 percent), rent (36 rent), and student loans (27 percent). Of the 82 percent willing to make a financial sacrifice for an adult child, 25 percent would pull money out of a retirement account for them.

Taking It With You


Well, kids, don't hold out for an inheritance. An HSBC survey of workers in 15 countries finds that 21 percent of workers would spend their savings rather than leave any to their children. Just 9 percent intend to save as much as possible and pass the money on. That isn't great, as 1 in 3 people with investable assets was relying on an inheritance for their financial security, according to a Merrill Edge survey cited by AARP. That includes 20 percent of baby boomers and 32 percent of Millennials.

Raleigh, North Carolina


Did you retire to Florida, only to find that everyone who annoyed you up north just followed you there? Well, instead of going back, a lot of people have settled in Appalachian country in Georgia, Tennessee, or North Carolina. It's called the “halfback” movement— for moving halfway back to northern towns — and has seen certain retirement-destination counties surge 169 percent from 2010 to 2017, the Wall Street Journal says. That’s the same percentage of growth for retirement destinations in Florida.

Moon Dragon House
Courtesy of


No self-respecting retiree loves the name, but “granny pods” are tied to the tiny-house trend and desire to downsize. They aren't all that much cheaper than houses at $100,000 to $250,000, but they're easy to put in a relative's backyard or a small lot, are easier to take care of, and are often beautiful. Weigh the pros and cons — and check with local authorities— before planting one.

Staying Put


More than 3 in 4 people over 50 want to stay in their community for as long as possible (77 percent), and nearly the same number in their current house, according to an AARP survey. But despite 36 percent planning to modify their homes so they can stay as they age, only 46 think they’ll be able to stay put. “We know that most people want to stay in their own homes, and the fact that many won’t be able to says that we need to do more to ensure that people age the way they want to,” says Joanne Binette, senior research adviser for AARP policy research and international affairs.



It isn't all cheesecake and sassy Floridian banter, but home sharing has taken off among retirees who remember splitting their first place with a bunch of roommates. Services such as Silvernest and Senior Homesharesare there to help, as 32 percent of retirees would take in a roommate if it meant keeping their own house.

Make Sure You Are an IRA Beneficiary


The median retiree had spent down between 11.8 and 27.2 percent of their assets during the first two decades off work, with the lowest percentage of spending belonging to those with the highest level of pre-retirement assets, a Employee Benefit Research Institute survey says. But about one-third of all sampled retirees had actually increased assets over that period, despite retirement sort of being about spending accumulated assets. Why the increase? Because people are nervous they’ll outlive their assets, EBRI suggests.

Multigenerational Living


More seniors are opting to live with younger family members who can help them save on housing costs, assist with medical needs, and keep them company. According to the Pew Research Center, 32.3 million Americans lived in households with two adult generations in 2016, up from 27.4 million in 2012. Despite concerns about privacy and new roles in a family, it could work out if everyone is on the same page.

Stay Sharp with Continuing Education
Steve Debenport/istockphoto


With retirees allowed to take college courses cheaply or even free, they're becoming familiar faces on campus. There are even university-based retirement communities that offer flexible living arrangements, college classes, and the use of campus amenities such as libraries, rec centers, and theaters.