Life after Retirement-Saving for Retirement

Retired workers support themselves either through pensions or savings. In most cases the money is provided by the government, but sometimes granted only by private subscriptions to mutual funds.  In this latter case, subscriptions might be compulsory or voluntary.  In some countries an additional “bonus” is granted (once only) in proportion to the years of work and the average wages; this is usually provided by the employer.  The financial weight of provision of pensions on a government’s budget is often heavy and is the reason for political debates about the retirement age.  The state might be interested in a later retirement age for economic reasons.

The cost of health care in retirement is large because people tend to be ill more frequently in later life. Most countries provide universal health insurance coverage for seniors, although in the United States many people retire before they become eligible for Medicare at age 65.  In 2006, Medicare Part D went into effect, expanding benefits to include prescription drug coverage.  A poll made in Washington said many people were unaware that “Medicare doesn’t pay for the most common types of long-term care”, 37 percent of Americans who took the survey believe that it does cover it. Medicaid is a federal-state program for the needy and the main source seniors use to pay their long-term care.

Overall, income after retirement can come from state pensions, occupational pensions, private savings and investments (private pension funds, owned housing), donations (e.g., by children), and social benefits. On a personal level, the rising cost of living during retirement is a serious concern to many older adults.  Health care costs play an important role. Retirement might coincide with important life changes; a retired worker might move to a new location, for example a retirement community, thereby having less frequent contact with their previous social context and adopting a new lifestyle. Often retires volunteer for charities and other community organizations.  Tourism is a common marker of retirement and for some becomes a way of life, such as for so-called grey nomads. Some retired people even choose to go and live in warmer climates in what is known as retirement migration.

It has been found that Americans have six lifestyle choices as they age: continuing to work full-time, continuing to work part-time, retiring from work and becoming engaged in a variety of leisure activities, retiring from work and becoming involved in a variety of recreational and leisure activities, retiring from work and later returning to work part-time, and retiring from work and later returning to work full-time.  An important note to make from these lifestyle definitions are that four of the six involve working.  America is facing an important demographic change in that the Baby Boomer generation is now reaching retirement age.  This poses two challenges: whether there will be a sufficient number of skilled workers in the work force, and whether the current pension programs will be sufficient to support the growing number of retired people. The reasons that some people choose to never retire, or to return to work after retiring include not only the difficulty of planning for retirement but also wages and fringe benefits, expenditure of physical and mental energy, production of goods and services, social interaction, and social status may interact to influence an individual’s work force participation decision.

Often retires are called upon to care for grandchildren and occasionally aged parents. For many it gives them more time to devote to a hobby or sport such as golf or sailing.  On the other hand, many retires feel restless and suffer from depression as a result of their new situation.  Although it is not scientifically possible to directly show that retirement either causes or contributes to depression, the newly retired are one of the most vulnerable societal groups when it comes to depression most likely due to confluence of increasing age and deteriorating health status. Retirement coincides with deterioration of one’s health that correlates with increasing age and this likely plays a major role in increased rates of depression in retires.  Longitudinal and cross-sectional studies have shown that healthy elderly and retired people are as happy or happier and have an equal quality of life as they age as compared to younger employed adults, therefore retirement in and of itself is not likely to contribute to development of depression.

Many people in the later years of their lives, due to failing health, require assistance, sometimes in extremely expensive treatments in some countries being provided in a nursing home.  Those who need care, but are not in need of constant assistance, may choose to live in a retirement home. Retirement might coincide with important life changes; a retired worker might move to a new location, for example a retirement community, thereby having less frequent contact with their previous social context and adopting a new lifestyle.  Often retires volunteer for charities and other community organizations.  Tourism is a common marker of retirement and for some becomes a way of life, such as for so-called grey nomads.  Some retired people even choose to go and live in warmer climates in what is known as retirement migration.

It has been found that Americans have six lifestyle choices as they age: continuing to work full-time, continuing to work part-time, retiring from work and becoming engaged in a variety of leisure activities, retiring from work and becoming involved in a variety of recreational and leisure activities, retiring from work and later returning to work part-time, and retiring from work and later returning to work full-time.  An important note to make from these lifestyle definitions are that four of the six involve working.  America is facing an important demographic change in that the Baby Boomer generation is now reaching retirement age.  This poses two challenges: whether there will be a sufficient number of skilled workers in the work force, and whether the current pension programs will be sufficient to support the growing number of retired people.  The reasons that some people choose to never retire, or to return to work after retiring include not only the difficulty of planning for retirement but also wages and fringe benefits, expenditure of physical and mental energy, production of goods and services, social interaction, and social status may interact to influence an individual’s work force participation decision.

Often retires are called upon to care for grandchildren and occasionally aged parents.  For many it gives them more time to devote to a hobby or sport such as golf or sailing.  On the other hand, many retires feel restless and suffer from depression as a result of their new situation.  Although it is not scientifically possible to directly show that retirement either causes or contributes to depression, the newly retired are one of the most vulnerable societal groups when it comes to depression most likely due to confluence of increasing age and deteriorating health status. Retirement coincides with deterioration of one’s health that correlates with increasing age and this likely plays a major role in increased rates of depression in retires.

Longitudinal and cross-sectional studies have shown that healthy elderly and retired people are as happy or happier and have an equal quality of life as they age as compared to younger employed adults, therefore retirement in and of itself is not likely to contribute to development of depression. Many people in the later years of their lives, due to failing health, require assistance, sometimes in extremely expensive treatments in some countries being provided in a nursing home.  Those who need care, but are not in need of constant assistance, may choose to live in a retirement home.

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