quality of life

5 Ways to Embrace Having to Work in Retirement

Emily Guy Birken — Thu, 28 Jun 2018 08:00:15 +0000

We all know what retirement is supposed to look like: You get a nice farewell luncheon and a gold watch from your employer — and then you get busy golfing, traveling, spoiling the grandkids, and generally living it up in your golden years.

So if you find yourself with an underfunded nest egg and the realization that you have to continue working in retirement, you can be forgiven for wanting to throw an epic temper tantrum. Working in retirement is not what we were promised, and if that doesn’t warrant some flailing and crying, I don’t know what does.

But not being able to fully retire doesn’t have to put you in a permanent bad mood. Once you’ve stopped shaking your fist at the heavens, consider these ways to not only accept, but also embrace the reality of working in retirement.

1. You may be happier than retirees

Though it might seem like retirement is the key to happiness, psychological researchers have found that working is actually better for your subjective well-being. According to a 2014 study by Dr. Elizabeth Mokyr Horner in the Journal of Happiness Studies, retirees do experience a rush of well-being and life satisfaction in the first few months after they retire — but they feel a sharp decline of their levels of contentment within the first few years of retirement.

There are a couple of reasons for this decline in happiness. First, anything you spend years planning for is unlikely to live up to your expectations. It’s only natural for retirees to feel let down when they realize their new chapter in life isn’t exactly what they expected. In addition, when you end a career that has helped define who you are, it’s common to feel adrift once that career has ended. Finally, retirement can often lead to a shrinking social circle, since you no longer see co-workers on a daily basis. Lack of social contact can increase feelings of loneliness and depression, which can be a major problem among retirees.

Even if you are not happy about the fact that you have to work past retirement age, remember that working may actually be improving your happiness by helping to define you, giving you a broader social circle, and providing you with a reason to get up every morning. (See also: How to Find Your New Identity After Retirement)

2. You can make your workplace better

One of the benefits of working past traditional retirement age is the amount of knowledge and experience you bring to your job. Not only does that make you a valuable member of your workplace, but it provides you with an opportunity to help encourage and shape the culture there. By taking younger co-workers under your wing and making suggestions based on your depth of knowledge, you can potentially improve the company you work for. It’s tough to do this without the kind of clout your experience lends you.

3. You can put off taking Social Security

According to the Center for Retirement Research at Boston College, approximately 42 percent of men and 48 percent of women begin taking their Social Security benefits at age 62, the earliest you are eligible to receive them. But Social Security benefits are permanently reduced by up to 30 percent by taking them so far in advance of full retirement age.

If you are still working in retirement, you can put off taking your Social Security benefits, and thereby increase your monthly benefit by as much as 8 percent per year that you put off Social Security. In addition, you may also be increasing your Social Security monthly payment by continuing to work, since the Social Security Administration calculates your benefit based on your 35 highest earning years. If you are at the top of your lifetime salary while working past retirement age, these high earning years will replace lower earning years from your youth — and potentially increase your monthly payment. (See also: 6 Smart Ways to Boost Your Social Security Payout Before Retirement)

4. You are in a retirement investment sweet spot

Though working past retirement age may not be your idea of fun, it does give you an unparalleled opportunity to invest. First, since you are over the age of 50, you can take advantage of the catch-up provisions that allow you to contribute up to $24,500 to your 401(k) and up to $6,500 to your IRA, allowing you to reduce your tax burden while funding your retirement accounts.

In addition, since you are working longer, that means you have a longer investment timeline to play with. This can allow you to invest for growth in ways that a typical retiree could not, since she would be trying to protect principal. Since you anticipate working for a few more years, you get a few more years of the magic of compound interest working to build your wealth. (See also: 7 Reasons to Invest in Stocks Past Age 50)

5. You can keep using your employer’s health insurance

All Americans are eligible for Medicare as of age 65, but the program costs more than you might expect and covers less than you might think. Not only do you have to pay a premium of at least $134 per month for Medicare Part B, but you will be on the hook for 20 percent of the Medicare approved amount for health care after you have met the annual deductible of $183. In addition, Medicare does not cover prescription drugs, dental or vision care, foot care, hearing aids, or dentures.

Being able to stay on your employer’s health insurance could be a major benefit to working, since you are likely to have more comprehensive coverage under that insurance and it may be less expensive for you, as well. (See also: 4 Common Mistakes to Avoid When You Enroll in Medicare)

No need to curse the heavens

Working in retirement may not be what you planned, but it doesn’t have to feel like the end of the world. If you take the time to recognize how working in retirement can actually help your emotional, mental, financial, and physical well-being, you can embrace the reality of working when you’d expected to be golfing.

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This article is from Emily Guy Birken of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

15 Surprising Ways Bad Credit Can Hurt You

Max Wong — Wed, 08 Apr 2015 13:00:08 +0000

Everyone knows that bad credit can prevent you from getting a mortgage, credit card, or other loan. But did you know that in addition to hurting you financially, bad debt can damage you emotionally and even romantically? If you have a low credit score, it's important to take steps to improve your number in order to avoid these problematic issues.

1. Damage to Your Relationships

Often when people cannot borrow money from a traditional lender due to bad credit, they turn to friends and family to bail them out. Being late on a credit card payment will damage your credit rating. But being late on a promise to pay back a friend can destroy your relationship.

Bad credit has a terrible impact on marriages. Jeffrey Dow, a Faculty Fellow at the National Marriage Project, has extensively studied the impact of consumer debt on marital satisfaction. Dow's research uncovered that, in addition to being cited as the leading cause of divorce in America, financial disagreements were a much better predictor of future divorce than even sexual disagreements.

"Compared with disagreements over other topics, financial disagreements last longer, are more salient to couples, and generate more negative conflict tactics, such as yelling or hitting, especially among husbands," Dow says. "Perhaps because they are socialized to be providers, men seem to take financial conflict particularly hard. Not surprisingly, new research that I have done indicates that conflict over money matters predicts divorce better than other types of disagreement."

And, talk about kicking you when you are down. During a divorce, a credit score can be used as leverage when dividing up assets!

2. Lack of Access to Emergency Money

One of my friends nearly lost her dog to cancer last year. Because of her low credit score, she was unable to get an emergency loan to cover her beloved pet's medical bills. Luckily, she was able to raise the money for treatment by crowd sourcing. Unfortunately, this kind of happy ending is uncommon. Outspending your means could leave you vulnerable to a medical catastrophe.

3. Limited Mobility

Hurricane Katrina was devastating to just about everyone in New Orleans, but many people were put in harm's way due to financial obstacles. Katrina struck on August 29, two days short of payday for some of the city's poorest residents. With no cash on hand and no credit, people literally lost their lives because they couldn't afford to pay for a bus ticket or gasoline to evacuate the area.

Airline tickets cannot be purchased with cash. While this seems like a First World problem, homesickness and the desire to go home is a universal feeling. In addition to keeping you away from loved ones, having a low credit rating can keep you from getting the best credit card for travel. With the right rewards card, travelers can save thousands of dollars by using mileage points to purchase tickets and accommodations, and avoiding foreign service fees for cash advances and purchases.

Poor credit can also keep you from owning a car or getting affordable insurance, which in turn can keep you from taking jobs that require a car.

4. Jacked Up Car Insurance Rates

Although this is illegal in some states, some car insurers have decided that there's a connection between on-time payments and reckless driving… and jack up the rates or deny auto coverage accordingly. Not having car insurance can obviously negatively impact the quality of life of anyone who is dependent on a car for work.

5. Increased Property Insurance Costs

Some insurance companies see a correlation between low credit scores and high insurance claims, and inflict punitive rate increases on customers with poor credit. Although California, Massachusetts, and Maryland prohibit this practice, people with poor credit pay a least twice as much as people with excellent credit in most states. For example, if you live in West Virginia and have poor credit, you will pay up to 208% more than your neighbor with a high credit score!

6. A Struggle to Refinance a Mortgage

Following the epidemic of foreclosures, new banking rules have been applied that make borrower's creditworthiness even more critical to negotiating a reasonable interest rate for home loans. Getting a loan allowed me to turn my rundown house into a beautiful rental property that pays for itself every month. The ability to get a loan for home improvement revolutionized my life by putting me on the fast track to financial independence.

7. Difficulty Renting

As a landlord, I check the credit score of potential tenants for late payments. I won't rent to people with too many late payments because the eviction process costs me too much time and money. It doesn't matter how much I like the prospective renter; I've learned the hard way that any goodwill I might have will be quickly turned into hate by tardy renters who have to be nagged into paying. I am not alone in this practice of judging prospects by their creditworthiness. In fact, most landlords I know only look at the credit score and don't allow potential renters to put their low score into context (i.e. "I was hit by a drunk driver and my medical bills bankrupted me!").

8. Grim Job Prospects

Most people I know don't have a poor credit rating because they are shopaholics. When the recession hit, a lot of unemployed people had to make emergency financial decisions that are still dogging them today.

There's a push to prevent employers from using credit reports against potential employees. But right now you can be denied a job due to a poor credit score. Allegedly, employers are supposed to inform you if your credit is the reason you were not hired, but this is no consolation to any job seeker who really wants and needs to work. One out of four Americans have had to go through an employer credit check, and one out of 10 are denied work because of a low credit score.

9. Stunted Growth for Start-Ups

Many lenders require borrowers to put up their home as collateral for a small business loan. But even getting a home equity line of credit requires a good credit rating. Like landlords, many franchisers make decisions about licensing new franchises based on credit rating.

10. Higher Interest Rates

Even if you are able to borrow money, borrowers who are considered to be higher risk pay higher interest rates.

11. Loss of Basic Utilities

Utilities regularly check credit before beginning service. If you have been late making payments — especially utility payments in the past — you might be required to pay a deposit in order to get service.

12. Impact on Professional Licensing

The Fair Credit Reporting Act allows government agencies that regulate professions to use credit reports. This means that states can require proof of creditworthiness before issuing everything from medical licenses to doctors, to construction licenses to contractors.

13. Lack of Disposable Income

I am currently working furiously to pay down my home equity line of credit early, so I can achieve the peace of mind that financial independence offers, and save thousands of dollars in interest payments. In order to achieve this goal, I have cut out pretty much all varieties of elective spending. No eating out. No dry cleaning. No college classes. No new purchases beyond the absolute necessities, such as food and health care. While I spend part of every day feeling annoyed and inconvenienced by my lack of ready cash, I make an effort to realize that my situation is temporary. I will enjoy a better retirement because of the savings I am making today.

People with poor credit spend more on fees and interest and, therefore, have less money to spend on experiences that enrich their lives.

14. Increased Stress

When I was 20, I watched as a sales clerk cut up my credit card right in front of me. That experience scared me straight. I will do almost anything to avoid public shaming, including pay my bills on time. However, most people would rather struggle with the stress of debt than admit that they can't afford something.

15. Poor Quality of Life

Debt can keep you from getting an education. It can keep you in an unhealthy relationship. It can keep you from getting a better job. Debt can keep you from fulfilling your potential as a person.

Every journey starts with a single step, including the journey towards creditworthiness. Even if you can only afford to pay down an extra $10 a month on your credit card debt, that is $10 you are spending to make your future better and more financially secure.

Don't you deserve a better future?

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This article is from Max Wong of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

America Is the No Vacation Nation

Nora Dunn — Tue, 06 Oct 2009 14:30:45 +0000

Here is a frightening (or enlightening, depending on how you look at it) passage from Wanderlust and Lipstick about the American approach to vacations:

A 2009 survey from Expedia found that 1/3 of employees don’t take all of their vacation time. While this speaks (to a certain degree) to how individuals make personal choices, there might be something else underlying our reluctance to hit the road.

The Center for Economic and Policy Research calls the U.S. the No Vacation Nation. In a 2007 study, they determined that the U.S. is the only advanced economy in the world that doesn’t guarantee paid vacation for employees. That means you can take a job, work your 40 (or more) hours a week, and it’s considered a bonus to be given paid vacation time.

But when we are blessed with vacation time, what keeps us from taking the time off we earn and deserve? According to the Expedia survey, people who don’t take their vacation time do so for several reasons. They hope to receive compensation for unused time, they have a hard time planning ahead or their partner can’t travel during the same time period. What’s worse? One in five respondents admitted to canceling a vacation because of work.

No wonder we have so much trouble balancing work and life. No wonder a buzz term such as “work-life balance” even exists; why is “work” considered a separate entity from “life” to begin with? From my travels, I have not found that other western cultures maintain the same distinction.

I am currently traveling and living in Australia, where my boyfriend landed an entry-level job with seven weeks of paid vacation per year. Seven. Weeks. This is not an isolated perk in this area of the world either; an Aussie friend recently enjoyed 14 months of paid long-service leave, then he cut his hours down to two days per week for a year, and now he is taking five more months off (at half-pay), then fully retiring…at the age of 50.

How long do you have to work at a company in America before earning seven weeks of vacation time per year? And would you suppose that a paid leave of absence on top of it is too elaborate? In other places, it is not unheard of.

When I vacationed to South Africa many years ago and was chatting with the European-influenced locals, the common question asked of me was “how many months are you here for?”

I looked at them like they were crazy for asking such a question. Who on earth can get months off from work at a time?

They in turn, looked at me like I was crazy. Who on earth travels all the way to South Africa from North America for only a few weeks (according to them)?

These are people who have business or work obligations; they are indeed rooted in reality. One fellow worked for a chiropractor in England, and traveled to South Africa for four months out of every year. He struck an arrangement with his employer to allow him the time off, with the proviso that he would do a few small side projects during his time in South Africa. No problemo.

So where is the disconnect? Why is America fostering a population of people who are tethered to their desks for life, with no respite? Although you might think that America at least dominates the world in productivity given all these hours spent at the office, recent studies indicate that it’s not necessarily the case:

Americans may take less vacation, but are they really more efficient than their European colleagues? Figures from the World Economic Forum certainly show the US remains the world's most competitive country. Yet other data, including countries' GDP per hours worked, reveal Europe still gives America a run for its money. That means many parts of the Old World are at least as productive as the US, if not more, with the added bonus of up to eight weeks off a year.

So why are Americans more committed to their jobs than to themselves? You may know — or be — one of these people if you have heard them say they don’t have time to work out or eat well because of their work schedule.

Do we accept extra work being dumped on us because the company is laying people off and we consider ourselves lucky to have any work at all? In this economic climate, this could be possible. It doesn’t, however, speak for the same work ethos that existed when economic times were better.

Are we working all those extra hours to pay off our consumer debt? (And what of the extra hours worked by salaried employees who don’t receive overtime pay)? I wonder if we are caught up in a lifestyle based on consumption, which in turn perpetuates people’s need to work hard — to earn enough money to pay off their last (or their next) purchase.

Do we opt out of taking vacation time because we can’t afford to go anywhere anyway? Maybe a "staycation" or frugal vacation is possible, or just relaxing and reading a good book for a few days. It doesn’t have to be “work or bust”.

Why do some people brag about having accumulated months of vacation time by not having used it over the years?

Do we burn the candle at both ends because we truly love the work?

Or have we simply lost sight of the forest through the trees?

It seems from the opening quote that there are three core issues which indicate a lack of balance in American society:

We are not using all the vacation time granted to us.
We are not granted nearly the same amount of vacation time that most of the rest of the western world sees.
We (or at least some of us) are prepared to cancel our vacation because of work.

This does not appear to be a sustainable model, and I wonder if we are already seeing signs of its breakdown in the form of depleted health and happiness. It is my hope that by redefining what the workplace — and work — is, we can find out how it fits into our lives in a more balanced way.

This article is from Nora Dunn of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

The Upside of an Economic Downturn?

Fred Lee — Tue, 14 Oct 2008 11:26:51 +0000

Not that anyone would wish economic hardship on anybody, but can the case be made that there are in fact health benefits to an economic downturn? Well, the conclusion is not as simple as you might think, and the answers are surprisingly mixed. In a recent article in the New York Times , researchers found that there are in fact instances where lean economic times might actually have a positive impact on our health.

While it goes without saying that a flourishing economy goes a long way to improving our standard or living, it is interesting to note that there are instances where economic prosperity does not always translate into good health.

Take, for instance, the economic expansion of the past two decades. While we have witnessed unprecedented growth in the stock market along with an incredible accumulation of wealth, the population as a whole has also experienced skyrocketing rates of obesity, diabetes, heart disease, and stroke.

The reason for this seems to boil down to time, or lack thereof. When the economy is good, people seem to dedicate more of their lives to working hard at their jobs. In fact, in a previous post, Xin Lu wrote about a Japanese worker who actually worked himself to death!

While the desire to work hard and do a good job is completely understandable, it also means that less time is dedicated to the maintenance of a healthy lifestyle, which includes healthy eating, exercise, and regular check ups with your doctor. When times are good, people also tend to embrace unhealthy habits like excessive consumption of alcohol (especially before getting behind the wheel), as well as stress and anxiety that can come from trying to maintain a certain lifestyle, which also, in the modern era of consuming, can entail accruing debt.

Then, of course, there is the issue of spending quality time at home with friends and family, which I think is reasonable to say contributes positively to one’s health and brings up the need to distinguish between one’s standard of living and one’s quality of life. This is especially true in the case of raising children.

In fact, some of the data seems to point to the fact that children may actually benefit from the economy slowing down. The reason for this may be hard to nail down, but some theorize that it has to do with more time spent with either mom or dad (who may be unemployed as a result of a slowdown), and the healthy aspects of life that go along with it, i.e., healthy, home cooked meals from scratch, the comfort and peace of mind that come from being around the nuclear family.

It is important to note that for families that are hit harder by a downturn, the results might not be so bright and sunny. In other words, if a family cannot absorb the loss of income, then it doesn’t bode well for the children or the parents. It makes sense, since not only do they have less access to food and health care, but the stress might also compromise quality family time.

On the other hand, if the loss of income can be absorbed, then having a parent spending more time with their children surely can’t be a horrible thing. Sure, you can’t buy as many houses, cars or big screen TVs, but it begs the question, how much is enough? If you can keep a roof over your head, food on the table, and clothes on your back, then maybe the only way to slow down and spend more quality time with your family is to be forced to do it.

So during these difficult times, many of us may have to curb our spending habits. This could mean buying fewer extravagant and frivolous items, and even forsaking our daily latte. This, however, could go a long way in instilling us with a greater appreciation for the simpler things in life, like our famiy, friends, and health.

And maybe even that watered down cup of Yuban, which should be enjoyed in the company of loved ones… slowly.

This article is from Fred Lee of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Quality of Life

Nora Dunn — Fri, 30 May 2008 07:41:53 +0000

Travel is amazing for helping you realize even more about your own country, culture, and home life. And despite cultural differences, language barriers, and economical disparities, we all seem to be fighting the same demons and striving for the same goals.

I’d like to share a story about a man named Joe (a western nickname derived from his longer Thai name) who I met in Thailand. It doesn’t matter that Joe grew up in a place barely imaginable to westerners, and lives a very different life on the outside as us; when he shared his life story with me, I realized that the battle for quality of life exists absolutely everywhere.

Joe grew up in remote northern Thailand. In the sleepy town where he was raised, the small number of inhabitants live off the land. They work two months of the year; one month planting, and the second month harvesting. The entire rest of the year is spent living a “quality life”. Everything is hand-crafted, and beautifully at that. A simple soup ladle has an intricate and ornate wooden handle. Why? Because they have time, and having beautiful things improves their quality of life.

Although Joe says they only work two months of the year, there is still work to be done. They tend their personal gardens for an hour each day. Since everything is handcrafted, time is spent making and repairing their wares. And of course there must always be home repair and maintenance projects on an ongoing basis. But then again, we in the western world also are laden down with many of these tasks, in addition to a 40, 60, 80, or even 100 hour workweek.

But as Joe grew up, like so many adolescents and young adults, he wanted what was on the other side of the fence. He longed to partake in the business of city life, smell the aroma of success, and interact with movers and shakers. And off to Bangkok we went.

Once in Bangkok, Joe led a successful career as a marketing manager. But as successful as he was, and as successful as others saw him to be, he worked long hard hours, and barely made enough money to pay for rent, much less live the life he thought a “successful” person should live.

Joe would wake up at 5am, and would return home from work at 10pm. Only to wake up and repeat the same process, six days a week.

A pair of jeans would cost one quarter of his monthly income. Rent: more than half. Food: another quarter. And after many years of this life, Joe realized that not only was no money left at the end of the month, but also no energy. No life. No love. And no happiness. In short – no quality of life.

Joe’s mind began to wander back to the life of his family, still in his home town. How on earth could he have thought that this life of “success” in the big city was better? Now the years of wisdom in the lines on his parents’ and grandparents’ faces made sense, as did their expressions of astonishment when Joe originally said he wanted to move away. They knew. But they also knew that Joe had to learn this lesson on his own.

Ten years later, Joe returned to his home town. His family and old friends accepted him with the unconditional love and acceptance that comes with the territory.

Now, Joe teaches westerners looking for their own quality of life the value of what may be right in front of them. He is a pioneer in sustainable living techniques, and adobe hut construction. He is now adopting a seed-saving program and other inspirational initiatives so that more and more people can preserve the beautiful world we live in as well as our quality of life (in the food we eat, places we live, and company we keep).

But first and foremost – he doesn’t work 17 hours a day any more. He enjoys the little things that most of us don’t even understand, much less know how to enjoy. And he has defined for himself what “quality of life” really means.

Does his struggle in Bangkok sound familiar to our own daily struggles? Never having enough time or money? Never being able to just “be”?

I wonder if there is a way for us to achieve that life – or at least that state of mind – in our part of the world. If everybody, despite background, culture, language, or family, wants the same thing, then maybe it’s easier to achieve than we may think.

This article is from Nora Dunn of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread: