The Retirement Arc

Planning for retirement is not as simple as it used to be. In our parent’s day, it was often enough to consider just downsizing and moving to a warmer climate for your golden years. For our grandparents, it could have been as humble as outliving the mortgage and finally enjoying your home.

This generation of retirees however faces an unusual challenge. With increased life expectancy and better geriatric care, people are healthier and more active into their 80’s and even longer. Add to that the fact that more people are choosing to retire early, and you may need to plan for as much as thirty years – more than a third of your life – in retirement.

This trend has been clear for some time. Looking at the information tracked by the Social Security Administration (SSA), we see that in 1940 the average age of retirement was 70, while the life expectancy was only 61. No wonder retirees represented only 5% of the population. By 1970, the national retirement age average had dropped to 65, but life expectancy for those retirees was just 67 – still no need for major plans.

The big change started at the turn of this century, with retirees starting at an average age of 62 while expecting to live another 11 years. This year, the SSA shows for the first time an average retiree age under 60 (59.8). What’s more, if you are 60-years old right now, you can expect to live to be 83. With over two decades to look forward too, today’s retirees need more than a retirement plan; you need to be thinking in terms of a retirement arc.

Chart from 1950-2008, and the trend is accelerating

This is something my wife Rita and I discovered over time when we moved to the coast of Ecuador in 2013. We really thought we had it all figured out. Rita was 63 and had just retired from a successful career as a realtor. I was 55 and still working as a network engineer, but I was able to do my job remotely. Because of our greatly reduced expenses in Ecuador, I was able to retire two years later at age 57.

So there we were – no mortgage, no need for a car, living the good life in a great modern condo right on the Pacific Ocean in the resort city of Salinas. If we wanted a break from the beach we had all of Ecuador to explore, and we took advantage of that to visit some incredible places and meet wonderful people. Everything was perfect, and we were all set for retirement, right?

Wrong.

Some unplanned consequences of our choice of Ecuador began to complicate things. First of all the healthier food, better climate, and just generally more relaxed lifestyle, helped me to lose weight. I went from 319 pounds down to 205, and I no longer needed medication to control my Type 2 diabetes. Rita also felt that her health had improved, and we found ourselves walking six miles or more a day for fun and exercise.

The year 2017 was a breakthrough year for us in the way we looked at our retirement. Our health had improved to the point where we were able to successfully hike the 26-mile Inca Trail to Machu Picchu, something we would never have dreamed of just 4 years earlier. Furthermore, after so many years living in a foreign country and working on our Spanish, it seemed no big deal to decide to stay in Peru for a few weeks, exploring Lima, Cusco, and the Sacred Valley. As long as we were that far south, we journeyed on to Uruguay for another two weeks, and of course it would be crazy not to pop over the river to Buenos Aires and see a tango show while we were that close.

That was the year we began to understand that we were looking at retirement all wrong. We are used to thinking of our lives as a story arc; birth, childhood, young adult, career and family, then retire. Now we know that retirement is not a final destination, a peaceful oasis at the end of your working life that you stagger into and gratefully collapse. Instead, it should be the start of a new phase of your life with its own story arc.

This epiphany changed our lives once more. We realized we were reaching the end of the first part of our retirement arc – and that we had developed the tools and gathered the resources for the next phase. We decided to spend some time thinking about what we really wanted to get out of what the Ecuadorians call tercer edad, or “third age”.

We agreed that we both want to travel while we are still in good physical shape. Another factor in our planning is that by the close of 2018 our four children had produced nine grandchildren, and we wanted to make sure we were able to be a part of their lives. As we talked it over, we reluctantly concluded that our beloved condo on the beach was no longer the ideal spot for us. The two-hour drive to the airport in Guayaquil made flying in and out more difficult, and maintaining a property in Ecuador while we sampled new locations around the world just added complications. A new plan was needed for a new phase of our retirement.

We decided that what will work best for us over the next five to ten years is a lifestyle gaining popularity now called roving retirement. There are several ways to rove. We have friends who have no fixed home, they just travel from location to location with a few bags, staying for a couple of months at a time before moving on. We know another couple that does home exchanges, swapping their place in Florida with homeowners in other countries, and yet another friend who offers pet and housesitting services to travel the globe. 

Because of our grandchildren, what works best for us is to have a home base in the US. We did a lot of research to find the perfect place. We looked for a state that did not tax retirement income, with a Goldilocks-sized city close to an airport. We wanted a moderate climate and a community that was maintenance-free since we expected to be away as much as six to nine months of the year. Finally, it had to be a more or less centrally located to our grandchildren – not an easy task, as they are scattered over three states.

We found what we were looking for in eastern Tennessee, and boldly implemented our plan. We bought a perfect home basee, sold our beach condo in Ecuador, and took the next step along our arc.

Today, as 2020 begins, we have finished all of the preparations and are excitedly looking at options for our first roving destination. We will want someplace warm, possibly somewhere in Central America, to spend the winter months. After that? Well, we don’t know – there is so much of the world from which to choose. It might just come down to where we find the best deal on a flight.

What we do know is that the first six years of our retirement arc in Ecuador gave us the resources, the skills, the finances, and the courage, to set out and explore more of the world. We are ready to enjoy the roving portion of our arc, and more importantly, we understand now that there will be another change down the road. At some point, we will be ready to choose a place to settle down. It might be in the US, or it might be in Ecuador. After all, we still have our Ecuadorian residency and we really loved living there. Or maybe we will find a place during our travels that calls to us like Salinas did back in 2013.

Wherever our arc takes us, we have learned something that everyone approaching retirement needs to take to heart: retirement is no longer just a goal, it is a journey to be enjoyed and cherished.

A condensed version of this post was published in “The Savvy Retiree” January 2020 Edition. For more information or to subscribe, click here.

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