February 2009 Archives

February 23, 2009

Five Keys to Working After Retirement

The most direct and efficient way for depression-battered retirees to replace the money that has somehow gone up in smoke is to work for it. And despite much doom and gloom about the economy, getting a part-time job is often an easy and pleasant experience.

First, the pleasant part: Probably the most important single factor for enjoying retirement is having a full plate of interesting things to do. For example, as the movie Frost/Nixon illustrates, Richard Nixon spent the most unhappy years of his life after he resigned the presidency because no one wanted him to do anything. While having lots of interesting things to do doesn't need to mean working, it can certainly include doing so as long as the work is enjoyable and leaves enough time for other activities. Or, as a 70-year old ski instructor told me the other day, "Working weekends and holidays teaching little tykes to ski is the most fun I've had in years -- and they pay me, too!"

To find a part-time job -- or, perhaps, during the course of the year, two or three -- it helps to think like a twenty-something. That is, to assume that in many fields the world of 9 to 5 is gone forever and to instead adopt a "gig" mentality. That is, to piece together the desired amount of pay from several easy-to-get part-time jobs. After all, someone has to be on duty at the resort parking lot at 6:00 AM Sunday morning and at the drugstore at 10:00 PM on Monday -- and if you like to get up early or stay up late, jobs like these could be yours for the asking.

Probably the biggest key to older people getting work is to overcome shyness. After 60, even the most outgoing people become socially shyer and shy people can become almost invisible. No, no, no -- resolve that this is not going to be you! Then decide how much you need to earn, what you would like to do, and hit the bricks (or at least Craigslist).

Here are the five easiest places to find work:

1) Where you have worked before. As long as you'll accept less pay and don't try to assert your former status, employers who already know your skills may find plenty of part-time work for you to do. For example, a retired partner in a law firm specializing in intellectual property may be welcomed with open arms if she proposes drafting patent claims two days per week for a reasonable hourly rate.

2) A competitor of your former employer. For the same reason your employer might want you back on a part-time basis, its competitors are likely to want to employ someone who already knows the job. And this will usually be true even if you make it clear that you'll reveal none of your former employer's trade secrets, such as customer lists or pricing formulas.

Continue reading "Five Keys to Working After Retirement" »

February 17, 2009

Your House As a Piggy Bank

In my last entry, I discussed money and perspective. If we can agree that money isn't as important to a good life as having compelling interests, good health, and a rich family and friendship network, why not focus on improving the things that really count? And in a year where the world economy is in free-fall and obsessing about money is guaranteed to make us miserable, shouldn't this be doubly true?

Okay, even assuming you agree that striving for more money shouldn't be anyone's first life priority, I'm happy to concede that financial comfort is nevertheless something that most of us would love to achieve. Or as Sophie Tucker put it, "I've been rich and I've been poor: Rich is better."

So the question becomes: If you suddenly don't have enough money to comfortably support yourself, how do you get more?

For those of us who own houses, home is a good place to look. Though you may not choose to treat your house as a piggy bank in prosperous times, there are, nevertheless, a number of ways to shake cash out of this major asset. Here are the big ones:

  • Sell and move to a less expensive place. In a down real estate market, many people believe that this is a poor time to cash in equity. But that's not necessarily true, since any place you buy will have similarly dropped in value. And especially if you live in an area where real estate values have held up reasonably well and you plan to relocate to a place where the bottom has fallen out of the market, you have a huge opportunity to both change houses and top off your bank account.
  • Rent a room or two. I can already feel many readers saying, "No, no, a thousand times no!" Hold the hyperbole and think of it like this: The problem isn't having another person around (especially one who will pay), but the possibility that the person might be obnoxious, slovenly -- or even dangerous. But instead of imagining a parade of horrible renters, why not do the work to find someone you'll like? Fortunately, by taking advantage of the great filing cabinet that is the Internet, you can do a majority of the necessary research from your easy chair, only bestirring yourself to interview likely candidates. Or, put another way, if you would prefer a studious, religious female who goes to bed at 10:00 PM and hates hamsters, she's no more than a few clicks away. Plus, in many urban centers, there are even services available to match seniors with appropriate tenants.
  • Share with a relative. When times are tough, parents may no longer be able to afford pricey assisted living, siblings may need a place to roost after losing a job, and kids may benefit from a temporary trip back to the homestead. Fine, welcome them -- but, especially if you need money to help finance you current life or retirement plans, be sure to charge them. And don't feel guilty! As long as the rent is slightly below market rate -- and everyone commits themselves to some basic rules of sensible living -- everyone wins.
  • Get a reverse mortgage. If selling the family home and moving to a smaller place is unpalatable and you want to stay in your own house until the day you die, sharing it with no one, you may want to consider a "reverse mortgage". As discussed in more detail in my book Get a Life: You Don't Need a Million to Retire Well, the idea is simple: An older homeowner trades some or all of her equity in her house in exchange for a monthly payment from a bank or other lender. The payment can be in cash or in the form of a line of credit that can be drawn on as needed. After the homeowner's death (or if she voluntarily moves out), the house is sold and the lender repaid (plus interest, of course). Whatever is left over goes to the homeowner's inheritors. When first introduced two decades ago, reverse mortgages were largely a scam. But today they are more closely regulated and reliable. But as with any financial product, you'll want to do careful homework to make sure that you are purchasing a mortgage that truly fits your needs and you're paying a reasonable price. To get basic questions answered, check out the HUD and AARP websites.
February 2, 2009

It's a Good Thing Money Isn't Everything

Anyone who claims to have more money than they did eighteen months ago is either impossibly brilliant, outrageously lucky, or a big fat liar.

For the rest of us poor peasants, it's time to suck up our disappointment and get on with life. In the near future, I'll make some practical suggestions as to how to live well on less. But for starters, let me ask you this simple question: How important is money to you as compared to your health, your family, your close friends, and the things you really care about accomplishing in life?

If you are typical, I suspect you'll rank money as less important than these -- and perhaps a few other things that I'll not mention in a family-oriented blog. No question, if you have no income or savings at all, money will sensibly move up the list. But for the rest of us who merely have less, keeping our priorities straight is the key to maintaining (or restoring) our equanimity.

Think of it this way: If your health is great, your friends many and contented, your family harmonious, and you get up every morning with an exciting agenda of worthy things to do, you may as well worry about your mutual funds. But if you're a bit too heavy and creaky, you don't have as many friends as you would like, one or more members of your family is in distress, or you can't figure out whether you are bored or boring, you have plenty of more interesting things to occupy your time. So, turn off the gloomy TV, put down the misery-filled newspaper, stop whining about the state of the world and go do something more useful.