Retirement is supposed to be a carefree time of life, but for many Americans, it's anything but. A recent piece by MarketWatch discussed many of the issues retirees face today. In response, we'd like to share some solutions to these difficulties.
In nearly a quarter-century of retirement, we've found that by diligently managing our money and keeping our minds open to alternative living situations -- even living abroad -- we can easily make ends meet and keep our stress levels low.
Retirees are broke
According to the Census Bureau, about 15% of people over age 65 live below the poverty line ($15,730 for a couple), while nearly half are considered near-poor, i.e., their income is less than twice the poverty level.
Living in the States at the poverty level is difficult. However, in countries such as Mexico, Guatemala, Ecuador, Thailand, and Vietnam, we met singles who live on their Social Security -- or even less. Couples can easily live on less than $24,000 annually and have a comfortable life. In two decades of retirement, our average yearly spending is well under $30,000.
If your retirement is underfunded, you might consider looking overseas for an alternative location to enjoy your golden years. In addition to a lower cost of living, you might enjoy better weather and higher quality of life.
Retirement is more stressful than it looks
Surprisingly, retirement is rated as the 10th-most stressful of major life events, according to a study by the American Institute of Stress. That makes it more stressful even than a significant change in the health or behavior of a family member, which comes in at No. 11. Studies show that fear of "running out of money to live comfortably" is the biggest concern of retirees, while other retirees are stressed out by the lack of structure to their days.
If money is the No. 1 stressor, then that's all the more reason to track your expenses and manage your daily expenses. If you track where your money is going, then there are no surprises at the end of the month -- or at the end of the year. This puts you in control of your finances and is a big stress-reliever.
If a lack of structure in your life stresses you out, then before you retire, make a list of all the things you want to do, places you want to visit, things you want to learn, and so on. Check out hobby clubs you could join and research websites such as MeetUp or higher-learning sites such as UDACITY and Udemy.
Do this while you're still working, so that on day one of retirement you're not facing a blank calendar and will have things to look forward to.
Retirees spend too much time by themselves
In a 2012 study of elderly people in Great Britain, roughly one in 10 people aged 65 and older reported being severely lonely.
Some retirees don't know what to do with all the newfound time on their hands. If you have a tendency toward loneliness, or you miss your connections from your working life, we suggest volunteering for an organization where your expertise will be useful. Not only will you support a cause you believe in, but you'll also meet many wonderful and like-minded people. You could also take a class at your local university, join a club, get involved in a local religious organization, adopt a pet, or cook meals for a widowed neighbor. We are never too old to broaden our circle of friends.
Retirees face huge and rising healthcare costs
In retirement, the health expenses we face cover everything from quality healthcare and providers to assisted living or affordable convalescent care -- not to mention the occasionally unreasonable costs of drugs.
In our experience, there's affordable and accessible healthcare in developing foreign countries such as Mexico, Guatemala, and Thailand. With baby boomers retiring at a rate of 10,000 per day, foreign countries know there is a business opportunity in providing quality independent living, aging in place, and 24-hour care for this generation. There's no need to pay $7,000 per month for this sort of care when, for example, you can receive worthy continuing care in Mexico for $2,000 a month. Because Medicare doesn't cover long-term skilled nursing care or nursing home care, moving abroad can mean serious savings for many retirees. Further, prices for prescriptions are generally lower than they are in the states.
Retirees are increasingly opting for multigenerational housing
Having several generations live under the same roof is commonplace in many countries. Now it's becoming more popular in the U.S. as well, given the high cost of long-term care in the States. The number of Americans in multigenerational households doubled between 1980 and 2012, reaching an all-time high of 57 million people, according to the Pew Research Center.
But for those who still prefer independent living with a little bit of, these services are very affordable and accessible in many foreign countries. With wages being lower in many Latin American and Asian countries, having someone do this day-to-day help is easy. Transportation costs are also cheaper, with mass transit costing less than a dollar to get to most local destinations and taxis running less than $5 per ride to the next town over.
Getting to retirement may seem like an end goal to you, but once you arrive, you'll find yourself facing a whole new set of challenges -- and opportunities. Keep an open mind and consider our suggestions as ways to stay happy and healthy in your post-career life.
About the authors
Billy and Akaisha Kaderli are recognized retirement experts and internationally published authors on topics of finance and world travel. With the wealth of information they share on their popular website RetireEarlyLifestyle.com, they have been helping people achieve their own retirement dreams since 1991. They wrote the popular books The Adventurer's Guide to Early Retirement and Your Retirement Dream IS Possible.