How To Retire

Strategies for retiring LATER, investing SMARTER, and living a more ACTIVE lifestyle

Retirement isn't what it used to be. For decades, working people aspired to put in their time on the job, then head off to a life of leisure. That's changing--and in a big way. Americans are living longer and staying healthier. As a result, during the past five years, they have stretched their working lives--after decades of earlier and earlier retirement.

With 77 million baby boomers approaching their golden years, this is only the start. A new BUSINESS WEEK/Harris Poll shows that 75% of relatively well-to-do baby boomers expect to keep working after they retire from their current careers. That decision requires new planning. In our 1998 Guide to Retirement, we give you strategies you'll need.

A new approach to financial planning is crucial. In the past, you've been told as you approach age 65 to skew your asset mix away from stocks and toward bonds and other, more conservative, investments. But now, there's an excellent chance you'll live at least 20 years past the traditional retirement age, so you can take more risk to beat inflation and live comfortably.

If you would rather not figure out the proper asset-allocation mix yourself, a new type of time-targeted mutual fund can do it for you. You pick a portfolio that corresponds to your projected retirement year, and as the date approaches, the investment mix becomes less risky. To quell the fear of outliving your savings, you can turn to several income-producing strategies. They could be especially useful if the stock market cools off as retiring boomers start cashing in their stocks a few years down the road.

There's more to retirement than tending your nest egg. You may want to stay employed--not just out of necessity, but because you enjoy holding a job, want to combat boredom, or have a yen for a second career. To augment your professional life or satisfy a longtime yearning, perhaps you'd like to finish college or get a PhD. In addition to pursuing a second career, you might want to use your life skills helping others as a volunteer in a school for troubled teens or clinic for indigent patients. Former President Jimmy Carter has found fulfillment in volunteerism around the world--and took a little time off to explain what it means to him.

An active retirement can mean travel. But forget the tour bus. A number of travel companies sponsor trips to exotic locales that cater to seniors with a penchant for adventure. And one of the big decisions is whether to move to a new place. A condo on the golf course may not be the ticket. How about keeping busy in a bustling college town? Of course, you'll have to stay in shape. That's where joining a sports team or club of like-minded athletes can make staying healthy fun.

Even if fitness is your goal, you still may need a little help from technology as your eyesight or dexterity wanes. Fortunately, devices such as programmable hearing aids and software that turns computer print into speech can make life easier. And don't forget that more and more online resources are becoming available.

There's no question that retirement can open up a new and satisfying world. "Many people are no longer willing to walk out the office door and just play golf," says Stephen P. Barnes, head of Barnes Investment Advisory in Phoenix. An active retirement can really become the best years of your life.

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