The Secrets of 'How to Retire Happy'
Smart tips from former financial journalist Stan Hinden, the best-selling author of a retirement planning book
Caroline Mayer is a consumer reporter who spent 25 years working for The Washington Post. Follow her on Twitter @consumermayer
And over my years, I’ve learned as much – if not more – from my fellow journalists as I have researching stories I’ve written.
Among my best teachers is Stan Hinden, a former financial writer for The Washington Post (where I also worked).
Stan officially retired from the paper in 1996. Then he spent eight years writing a monthly column about the dilemmas, challenges and decisions that he and his wife, Sara, faced as retirees.
A New York Times Best-seller
In 2000, Stan turned the lessons he learned into a book, How to Retire Happy: The 12 Most Important Decisions You Must Make Before You Retire. The new edition just made the New York Times business best-sellers list, so I was eager to speak with Stan, now 86, and get him to share some tips.
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Stan lives in Montgomery County, Md., but sadly, no longer with his wife of 60 years. Sara, 84, the former manager of the GE Information Systems Training Center in Rockville, Md., has Alzheimer’s disease and has moved to a small group home nearby; Stan visits her almost daily.
The signs of Sara’s illness first appeared in 2007. "Until then," Stan notes in his book, “we had been poster children for a happy, upbeat retirement.” In other words, no matter how carefully you plan for a happy retirement, unexpected – and unpleasant things – can happen.
Highlights from our interview:
Next Avenue: You actually knew very little about retirement finances when you left The Washington Post — and that caused some problems, right?
Hinden: When I retired, I realized that here I am a newspaper writer covering the financial markets and yet I don’t know anything about this stuff, which is eventually why I wrote the book. I figured, if I don’t know anything about this, there are probably lots of other people who don’t.
Medicare is a good example. When I retired and we went on Medicare, it was a bit of a shock to find out that Medicare didn’t pay for dental care or hearing aids or prescription drugs at the time.
You can’t just retire instantly, like I did – that is, leave the job and then learn what comes next. It’s really important to spend time educating yourself in advance.
Why do you believe retirement planning is about more than just money?
Retirement is also about a unique opportunity – providing you are well and active – to find new things that can add a whole new dimension to your life. I don’t think enough people realize that.
How soon should someone begin preparing for a happy retirement?
I would say that when people get to be 50, maybe 55, they really have to start thinking about it quite seriously. That’s when they should increase their savings as much as they can.
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When people get to retirement, they need to have figured out a budget to tell them not only how much income they’re going to have, but even more important, how much they’ll be spending.
I find that most people, upon retirement, would like to continue their style of living, maybe even increase it, because there is a great temptation to take trips and do a lot of things that you didn’t have time to do before. I succumbed to some of that.
Yes, you mention in the book that financial advisers say people should expect to live on about 80 percent of their pre-retirement income in retirement. But you found that you spent more in retirement, not less.
The 80 percent rule of thumb didn’t work for us. We traveled more and had time to go out to dinner with friends and see theater.
After I discovered that, I figured I better cut back on our expenditures to get our spending in line with our income. So I did — and things got better.
You say you had to learn how to spend more time with Sara without getting on each other’s nerves.
This was something of a shock. For years, we both had busy jobs and saw each other only briefly in the evenings, more on the weekends. When I retired, after Sara, we would both be at home together.
We came up with a pretty good plan that worked for us. Early in the week, Sara would spend her days with her girlfriends, playing mahjong and canasta. I used the time to write and do chores. Then, toward the end of the week, we’d do things together, maybe go downtown to a museum or take day trips.
We never encroached on each other’s territory, even though we had also just moved from a five-bedroom house to a smaller apartment.
So what retirement advice would you offer other couples?
I recommend that before married couples retire, they sit down and decide what each one wants from retirement. That way, they can try to come to an agreement about what kinds of things they are going to do and how much money they can afford to spend.
Your book says that one bright spot in Sara’s illness was the fact that you both had bought long-term-care insurance policies. What’s your advice about buying this coverage?
There is a lot to think about regarding long-term-care insurance – both positive and negative, but I’m very glad I purchased these policies when The Post offered them to employees.
The biggest positive is that when you find yourself in a situation such as I’m in, with a spouse in an expensive Alzheimer’s facility, it’s saving my assets from a huge financial hit.
Long-term-care policies can be expensive, though. They can cost several hundred dollars or more a month. And you might pay for them for years and never use them. But I think you can say the same thing about fire insurance.
Still, buying long-term-care insurance is tricky, because policy provisions differ and so do the rates insurers charge. My advice would be to get bids from several insurance companies and read the material very carefully before signing up.
I love the Dos and Don'ts retirement tips at the end of your book. What are two of your favorites?
In the Don’t list, one of my favorites is: Don’t miss your opportunities.
You wanted to see a baseball game last year, but you never called for tickets. You wanted to see the new art museum in town, but never got there. Ask yourself, if you don’t do those things now, when will you do them?
My other favorite is the last one on the Do list: Do find a way to be friends with your children and grandchildren, even though they are very busy. You need them and whether they realize it or not, they need you.
That brings me to my last question. You and Sara talked about moving from the Washington area to Florida but ultimately decided against it partly because your three grown children lived nearby. What should pre-retirees consider when weighing whether to move?
If it’s necessary to move in order to lower your cost of living, that’s not a bad thing to do. But you have to be very careful. There are a lot of places in the country where newcomers are very welcome — and some where they are not.
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College towns are one of the best places to go. They have plenty of activities: concerts, shows and, of course, classes which seniors can often take for free or very little money.
When we were considering moving to Florida, I wrote about our decision-making in my column and that brought a mini-avalanche of mail from readers, most of whom were children of parents who had moved for retirement.
They wrote to say: "Don’t do it. My parents did that and, over time, they lost touch with us and our children."
That’s one of the reasons why we decided to stay here and I’ve never been sorry about that decision.