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Color of Money

Color of Money Book Club: Retirement

Michelle Singletary and Jan Cullinane
Washington Post Business Columnist and Author
Thursday, March 31, 2005; 12:00 PM

This month's selection for the Color of Money Book Club is "The New Retirement: The Ultimate Guide to the Rest of Your Life," by Jan Cullinane and Cathy Fitzgerald (Rodale). Michelle writes that she likes the fact that Cullinane and Fitzgerald begin the book not with a long and depressing discussion of how much money you may need to retire, but with tips on how to ease the transition to retirement.

Cullinane joined Michelle online on Thursday, March 31, at noon ET to answer questions about dealing with retirement issues. A transcript follows.

_____Michelle's Column_____
The Color of Money

Editor's Note: Washingtonpost.com moderators retain editorial control over Live Online discussions and choose the most relevant questions for guests and hosts; guests and hosts can decline to answer questions.

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Michelle Singletary: Good afternoon everyone. We have quite a number questions so let's get started.

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Indianapolis: I've heard that college towns are attractive to retirees...why?

Jan Cullinane: You are correct - this is a big and growing lifestyle niche for retirees considering relocation - many of us yearn to return to those good old college days.

About 60 colleges/universities have developed specific communities to attract retirees, and about an equal number are in the process of doing so. Not to mention people who just move to the college town itself and live in the community.

Look at all a college town has to offer - lots of culture, athletic events, restaurants, bookstores, libraries, and often excellent medical facilities. In addition, you usually have a vibrant economy, a stable housing market, a well-educated populace, and lifelong learning opportunities. Most colleges/universities give "mature" learners a break when it comes to tuition - you can often audit a course for free or low tuition - just think - no papers or exams!

Keep in mind, though, if you're looking to continue working in retirement, you may be competing with all those college kids for the part-time jobs.

Finally, as a man said at one of our seminars - "And there are lots of pretty girls and cheap beer!"

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Roth Bait and Switch?: Hello to you both. I'm worried that the Congress or the Administration will renege on the promise to keep all Roth IRA earnings tax free in the future.

Do you think it's possible that we'll contribute to Roths every year and then 10 or 20 years from now, the earnings might be taxable? Please let me know your thoughts. I hope I'm worrying about nothing. Thanks!

Michelle Singletary: Right now don't worry until there is something to worry about. It's likely (although I have no way of really knowing) that Congress would grandfather in old accounts and if they were inclined to tax future Roth withdrawals it would be on new accounts open. Hang tough and just keeping saving as much as you can. Even if withdrawals are taxed you are still better off having something to tax.

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Washington, D.C.: Do think the Southwest will ever become as popular of a retirement location as Florida is now?

Jan Cullinane: The "guru" of retiree migration patterns is Charles Longino, Jr., gerontologist and a professor at Wake Forest University. His book, Retirement Migration in America, uses data from the most recent census to describe migration patterns. Florida still leads the pack of states for attracting retirees, but the Sunshine State is not attracting as high as a percentage as it previously did. Between 1995 and 2000, Florida was the recipient of almost 20% of adults 60 and older, but looking back to 1980,that percentage was even higher, around 26%.

According to Longino, these are the top 10 states for retirement, if you look at the net number of migrants - in other words, subtracting the number of retirees who move out of the state from those who move into the state: Florida, Arizona, North Carolina, Nevada, South Carolina, Texas, Georgia, Tennessee, Alabama, and Arkansas. Between 1995 and 2000, Florida's net number of over-60 migrants was almost 230,000, compared to a little more than 80,000 for second-ranked Arizona.

There will probably be a gradual spreading out of retirement locations - retirees tend to like mild climates, being around water, less congested areas, lower crime rates, and beautiful settings. However, Florida has been at the top of the list since around 1960, and although its percentages are decreasing, it'll take an awful lot of retirees going to the Southwest to unseat the Sunshine State!

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Baltimore: Through my companies 401k plan (their contributions and my own) I have been putting away roughly $4000 a year for retirement for the past 4 years. I am 27 years old and making around $40,000 a year. Should I be doing more at this stage (opening a separate account, contributing more, etc.) or am I on the right track? It is hard to know when you are so early in the "retirement game"! Thanks!!

Michelle Singletary: Child, early is your investment friend! With so much time until you retire, time is your side. So, if I were you I would max out in your 401 (k). And don't forget to start saving for your 3 to 6 months emergency money too.

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Colesville, Md.: I'd like to move someplace warmer when I retire in about two years, but can't seem to make up my mind where to go. Can you give some some general guidelines?

Jan Cullinane: Ah, yes, the choice issue! This is actually a challenge for many of us - when you think about it, most of us end up in a particular place because of our job, or a spouse or significant other's job, or because it's where our parents worked - occupations dictate our location. However, when you retire, you can potentially move anywhere. The Paradox of Choice (by Barry Schwartz) actually addresses this idea -too many choices can become paralyzing!

A few things to think about - there are often many correct choices! Once you know what your non-negotiable requirements are for a retirement location (for example, do you require good medical facilities, lots of culture, friends and/or family close by, a low cost of living, convenient airports so the grandchildren can visit), there are numerous places that can fit the bill - it's not like there is only ONE place in the world, and it's up to you to find it. I like to compare it to kids researching where to go to college - since I've had two go through the process and a third approaching it - there are many colleges where they will thrive, and some that would be a poor choice, knowing their personalities.

So, once you get to the point of recognizing that there is more than just one perfect place (there isn't), what are some practical ways to narrow your choices?

Some tips:

- Come up with your non-negotiable list of "must-haves" in your new location - the more specific this can be, the easier it is to narrow your choices. If you know you will need to work, for example, you'll need a place with a vibrant economy. If you know you'll be dealing with health problems, excellent medical facilities are a top concern; if you know you need arts and culture to live, a small town far from a big city can be crossed off your list.

- Often, where you vacation is a clue as to how you'd like to spend your retirement years - think about how you like to spend your leisure time.

- The Internet is a great resource. Two good websites that will ask you questions about likes/dislikes/cost of living, etc., then generates a list of potential places based on your individual answers are: www.bestplaces.net (click on "find your best place"), or www.findmyspot.com. Www.realtor.com allows you to look at homes/compare prices from the comfort of your computer chair! You can also find cost of living information (such as the ACCRA) for cities that are large enough and submit information.

- There are many other books (in addition to ours) that rate specific places. It's worthwhile looking through these - most can be found at the library - and get a flavor. However, once you narrow down your list to several possibilities, nothing replaces going there to see for yourself!

- When you've shortened your list to a few real contenders, try visiting in all seasons, talk to people who are living there, try discovery tours that big developments often offer, get the local newspaper so you can see the issues affecting the community, look at the area's Yellow Pages to get an idea of the scope of restaurants, businesses, churches, etc., contact the city's Chamber of Commerce for info (great for some statistics, but of course they have their own agenda - to get you to move there). Think about renting before purchasing so you can be sure the place is a good fit.

- There is a company called Realty Presentations (www.LiveSouth.com) that offers free real estate shows - in the interest of disclosure, Cathy and I have done seminars for them - they have a large number of communities represented (primarily in the Southeast) that provide information about places to relocate - it could be worth going to one of their shows to get a lot of information about a lot of places in a short time.

- Another trend is to get people to move with you! Social contact is so important - if you have like-minded friends looking for a place, get them to come along, too! Actually, we purchased a lot in a southern state, and got some friends to go look there, too - they also bought a lot and/or are building - so we'll have a built-in social group to start us off when/if we move to a new location.

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Washington, D.C.: I'm 27 years old and clearly a long ways off from retirement. If my future wife and I want to retire at age 60 and live comfortably, how much money should we be saving each year? And how will inflation impact the amount of money we will need to have in the bank by 2040? Thanks!

Jan Cullinane: As a young investor you are in an ideal position to start saving for retirement. Because the investments you make now will have a long time to grow, the benefits of compound interest are on your side. Target putting away 10% for long-term savings at this point and include the use of a Roth IRA in your savings plan since the earnings will be available tax-free when you retire.

Inflation is one of the huge risks that long-term savers need to overcome. Inflation in the U.S. has ranged from a low of 2% per year to highs of around 10%, but usually has been under 4%. Using stocks for growth is the best way to beat inflation. Real, after-inflation returns on stocks have averaged 7.3% per year since 1926, almost double the 3.8% real return on long-term corporate bonds and .6% real return on cash . Both stocks and bonds failed to overcome the effects of inflation (i.e. had negative real returns) in 25% of the one year periods, but have been good tools for growing wealth over the long run.

By way of comparison, if you had started investing $4,000 per year in a Roth IRA in 1926 (assuming they were available back then), and kept it up for 50 years (a total investment of $200,000) and invested it all in stocks, your portfolio would have grown to $5.9 million, and even after factoring in the effects of inflation it would have been worth $1.9 million. On the same after inflation-effect basis, an investment all in corporate bonds would have been worth only $600,000, and an investment all in bank savings accounts would have been worth only about $230,000.

While there are no guarantees that this history will repeat itself and there were many five and ten-year periods where returns lagged inflation for both stocks and bonds, most professionals feel that these long-term averages are useful measures to plan for a couple's long term future.

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Indianapolis: If you are considering relocation as part of your retirement plan, what should go into the process of deciding when and where to move?

Jan Cullinane: Where to Retire Magazine did a survey of their subscribers asking what are the factors to consider in choosing a retirement location. They include:

low crime rate

active, clean safe downtown,

good hospitals

low overall tax rate

mild climate

friendly, like-minded people

low cost of living

good recreation/cultural possibilities

low housing cost

major city nearby

full or part-time employment opportunities available

college town with adult education available

Of course, you should think about your own personal non-negotiables - walking distance to church/restaurants/shopping, living near the water/close to relatives, etc.

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Vienna, Va.: 1. Assuming one is in relatively good health, would you recommend taking early retirement under social security (ie, age 62) or regular social security retirement at, in my case, 65?

2. My wife and I will be retiring in the next few years and intend to "downsize" to a less expensive home. What are the current regulations regarding the non-taxability of gains on the sale of a principal residence?

3. Why do many retirement experts say you should be conservative and assume that you will live to 85. Isn't conservative more like 90 or 95?

Jan Cullinane: Wow, three big questions! Here goes:

1. I can tell from this first question that you understand that your health and life expectancy need to be considered in deciding whether to elect to take a reduced retirement benefit from social security at age 62 (or later) or wait to collect the normal retirement benefit from social security at your full retirement age, which is currently 65, but which is gradually increasing to 67. We included a typical example in our book where it took 16 years (until age 78) before the normal retirement benefit starting at age 65 had provided cumulative payments larger that the smaller benefit starting at age 62.

There are a number of other factors to consider, besides just your life expectancy. Some of these other factors are 1) the benefit of receiving payments sooner, rather than later - in other words do you need the money to live!! 2) the potential reduction of your social security payments received before full retirement age if you continue to work; 3) the impact of income tax on your social security payments; 4) the interest rates at which you can invest funds; and 5) situations where you are planning for social security benefits of two partners where the second partner's benefit is based on the first partner's benefit.

About half of retirees use their social security as their primary source of income. If you need it to live, you certainly have to take it at 62. If you don't, take a look at the other factors listed above, and decide based on that.

2. Under the current rules, the gain on the sale of your principal residence, up to a maximum gain of $250,000 (or $500,000 on a joint tax return) can be excluded from your income. In order to qualify for this tax benefit, the residence must have been your principal residence (not a vacation residence), during a least two full years in the five year period ending with the date of sale. As with most areas of taxation there are exceptions to this two year rule, and the exceptions are intended to help. You can qualify for a reduced exclusion when you sell before meeting the two year test if the primary reason for not otherwise qualifying is due to 1) a change in your place of employment; 2) health reasons (either yours or that of a close relative); or 3) unforeseen circumstances, such as a divorce or legal separation, or the death of a close relative.

There is no limit on how many times you can qualify for this exclusion - in fact there are people who use this tax benefit to qualify for what is almost a tax-free business. They are what are known as serial homebuyers, who purchase another principal residence every few years, always trying to find a residence that will appreciate, either due to a rising housing market in the area, or possibly due to their own efforts in sprucing it up. After meeting the two year ownership and use test they sell the residence, pocket the tax-free profit, and move to another principal residence and start the process over.

3. We agree with you - planning for resources to last only until age 85 is probably not being conservative enough for many people. If you make it to age 65 you have an average life expectancy of an additional 18 years (men a year or two less and women a year or two more). But as with any average, there are 50 percent of the people on either side of the mean. In fact, if a couple both live to age 65, one of them has a better than 30% chance of living past age 90. Since people in the U.S. are expected to live longer and longer (although the recent studies about childhood obesity have challenged that thinking some),it may become even more costly the longer you do live (all that healthcare and assistance you might need). So, it would be prudent to plan for you money to last into your 90's or beyond.

Michelle Singletary: Just one note that I would like to add to Jan's 2 point about gains on the sale of your main home. According to the IRS you may use this provision for only one property at a time and one sale every two years. For additional information on selling your home, refer to IRS Publication 523, Selling Your Home or see Tax Topic 701 at www.irs.gov

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Bethesda, Md.: You know, I had to laugh the other day when I was reading your college spring break article. While in college just a couple years ago I went on two spring break trips and went into a modest amount of debt because of them. Am I in uncontrollable debt now however, no. The only debt I have is my own home. I own one credit card and if I didn't have to use it to "build up a credit history" I would have never even gotten it. And no, I'm not rolling in money, I have a typical income for this area.

I just find it rather hypocritical that people love to harp on college students for being so irresponsible with their money all the while our country and states are going into more and more debt trying to fund welfare programs (including Social Security and Medicare) for our older generations who did not plan correctly for their retirements and beyond. These college students are just following what they learned from their parents and grandparents.

washingtonpost.com: On Spring Break, With Their Heads in the Sand (March 10, 2005)

Jan Cullinane: Good point about modeling behavior for our children. On a personal note, we have one child who has graduated from college, one in college, and one looking at colleges. We require our children to earn money to pay for their books (and believe me, that is a big number these days!), their spending money for college, and put money toward any spring breaks they want to do. You're right - we have to ingrain in them a sense of saving and contributing, but yes, there is still room for spring break and fun with some planning!

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Arlington, Va.: Michelle, Thanks for taking my question! I am confused about being penalized for checking credit scores. I am thinking about buying my first home, and would like to both check my own credit scores as well as get pre-qualified for a loan, which would require various banks to check my credit scores. Will all this checking damage my scores? How often can I look them up, or anyone else look them up, without it having an impact?

Michelle Singletary: The rules have changed a bit in the credit checking arena. For the most part if all those credit report checks happen in a fairly short time (say withing 30 days) you will not be penalized in the form of a lower credit score. Also, individuals can check their own credit report as often as they like without it affecting their score. Happy house hunting.

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Huntsville, Ala: Michelle, LOVE YOU and LOVE your chats. You are my role model. My hubby and I have made some very positive and determined changes in our finances, due to your constant preaching and no-nonsense approach to financial matters. I'm just saying thank you, so much. Keep it up, girl!;!;

My question: I've just accepted a new job. What is the best, smartest thing to do with the 401(k) funds I've got? I can't contribute to my new job's 401(k) for another year, but then they'll match my contributions at 25% - not much, but free money. So what should I do with the money I have currently? Let it sit, then roll it into the new accounts? Roll it into a rollover IRA? It's not a lot of money but it's MINE.

I'm 50, female, married, if any of that is helpful. THANKS so much!;!;!;

Michelle Singletary: Wow. You are so very welcome. It's nice to know my fussing is paying off for somebody. And what an excellent question. First of all DON'T CASH OUT THAT ACCOUNT. But if you read me, you knew I would say that. As far as what to do it with look at the account. Are you happy where the money is? Is it being investing in good funds with good returns? If so no need to move the money. Let it roll (but of course reallocated and make sure you are diversified). If you're not happy with the plan choices from the old 401 (k) then certainly roll it over to a rollover IRA with another company. BUT make sure if you do a rollover it's done in a way that the money goes directly to the financial institution. Don't let them cut a check to you directly because your old company will have to take taxes out.

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Silver Spring, Md.: What can you tell me about inheritance tax and is there anyway to avoid it?

Jan Cullinane: Although not always the case, inheritance taxes, which are imposed by the states, are often equal to the tax credit allowed on the Federal estate tax return for state inheritance taxes, and do not really entail an out-of-pocket cost. In these cases, there is little concern about the tax and no reason to plan around it. However, since the laws of the states vary, you should discuss the application of your state's inheritance taxes with a qualified tax advisor.

The bigger tax issue associated with death is the Federal estate tax, which can be very significant and for which there are a number of planning ideas to reduce or even eliminate this tax, both for the decedent and for the decedent's spouse, who will often die owning both their own assets and those of their spouse who predeceased them. These ideas include use of lifetime gifting programs, charitable trusts, and maximization of the deduction for marital bequests through the use of trusts.

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Greenbelt, Md.: I believe you have always advocated paying for retirement before paying for your children's education. How do you know when you're putting enough into retirement, and can begin saving for your children's college fund. I put 5% of my salary into a 401-K and my employer puts another 8%. I'd like to start putting money in for my two children, but can put more money into retirement if necessary.

Michelle Singletary: Honestly, you have to do the math. First figure out how much you will need to retire on. I suggest you use the calculator at www.choosetosave.org. Once you've figured out how much you will need to save for your retirement every month, year or whatever any extra money you have start putting it away for the kid's college fund. With some tight budgeting, cutting expenses you can do both. As you said I do believe people should save first for their retirement but I also think parents should do what they can to help their kids get a college education so they won't graduate with debt to pay for decades.

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Crofton, Md.: Love your chats.

My wife and I are in our mid 30s and are each contributing the max allowable dollar amount allowed by the IRS in our respective 401ks. Recently we heard the S.O. talk show - she was saying to only contribute up to the amount your employer will match and use other vehicles for retirement savings. I think this is a bit misleading; depending on your AGI-other retirement vehicles may not be available (e.g. Traditional IRAs and ROTH IRAs). Am I missing something? What's your take on only contributing up to "the match"? Thanks again.

Michelle Singletary: I think YOU are right. The answer is "it depends." And I contribute the max to my 401 (k) and still save in other vehicles with less restrictions.

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Washington, D.C.: I ordered the book but have not received my copy. Do you discuss anything about gay/lesbian retirement communities?

Jan Cullinane: Yes, we do address your question. It's estimated that about three million gays/lesbians will be 55 this year, and that number will rise to about four million by 2010. Since some gays/lesbians feel they may not be welcome in a more traditional active-adult or retirement community, and others are searching for like-minded people with whom to spend their retirement years, there are quite a few gay/lesbian communities in the planning stages, some that are in development, and several that are already developed.

Two already in existence include the Palms of Manasota - men and women - near Sarasota, Florida (www.palmsofmanasota.com or 941-722-5858), and The Resort on Carefree Boulevard - women only - Fort Myers, Florida (www.resortoncb.com or 239-731-6366). Stonewall Community in Boston is in the planning stages, and RainbowVision Santa Fe should open in 2006.

An excellent source for more information is GLARP - the Gay & Lesbian Association of Retiring Persons, Inc. (www.gaylesbianretiring.org or 310-709-8743).

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Washington, DC: I frequently hear the advice that I should have about 6 months worth of expenses saved in a savings account for emergencies.

But isn't it an equally viable strategy to pay your extra money toward your home mortgage in order to pay it down fast, rather than stash it in a 2% earning savings account, and just have an equity line of credit available for any emergency? Having bought a rowhouse in DC a while ago, I have something like $400K in equity. Aren't I better off in the long run to pay off my mortgage as fast as I can?

Michelle Singletary: You're better in the long run to have CASH available that won't require you to go into debt. A home equity line of credit is debt. You would be borrowing money at the prevailing interest rates (which are going up). Your emergency savings (even at a low rate) needs to be money you can get to that is cash. You could still have a line of credit but use it once you have used up your emergency money.

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Washington, D.C.: Michelle -- You are so right about the beauty of retiring to a college town. I have about two more years to work, and I've had my eye on Oxford, OH, for some time now. Oxford is home to Miami University, is located about 35 miles from Cincinnati, and is paradise compared to big city life. I expect almost any college town with similar demographics and cultural attributes would be similarly appealing.

Michelle Singletary: Thanks for the credit but it was Jan, the author of this month's Color of Money Book Club that suggest you look into retiring to a college town.

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Southern Maryland: What is this deal about parents saving for their childrens' education? Make them work their way through and pay for it themselves. My parents did not contribute a single penny to my higher education. I worked two jobs to pay for six years of night school. My graduation "gift" was a 75-cent plastic pin from my mother (bought at Hallmark Cards) that said "Super Grad." Mom kvetched and moaned about the 25-cent school lunches she had to pay for us while in public school, so you know what life with mother was like!

Nothing gets my back up quicker than someone telling me "my parents helped me" with expenses for living/school/cars/house, whatever. I keep telling my mother that if she had paid for our college we'd have better jobs and could support her in her old age, but she's on her own now. We give back what she gave us.

Michelle Singletary: Don't you think you answered your own question. I decided when I DECIDED to have three kids that I would help them get a college education. That is my life gift to them. So why would you begrudge anybody who wants to help their kids?I'm sorry you feel so bad toward your mom but that's no reason to bash others who do want to help their kids start off life without debt. And here's a thought, maybe your mom didn't really have the money? Or maybe she did. Either way it was her money. If se had it, I believe she should have helped you. But since she didn't get that chip off your shoulder and learn to appreciate that you could go to school anyway.

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Washington DC: Is it worth considering moving out of the United States for retirement so that my money might go further

Jan Cullinane: Yes, it is possible that moving to another country can save you a lot of money. We addressed moving to three countries in our book - Mexico, Costa Rica, and Canada. It is possible, depending on the lifestyle you choose, to make your money go farther, particularly in Mexico or Costa Rica - in fact, when we visited Costa Rica last May, there was a two-bedroom, two bathroom house on the beach - actually a street separated the house from the beach - in the $200,000s - you wouldn't find that in the U.S.! But, keep in mind that you'd want to think about all the other ramifications of living in another country as well - for example, health care, cultural differences, and the infrastructure of the country. It's really some of these non-financial issues that can make or break your decision.

Two good sources for information are International Living (www.internationalliving.com)and Escape Artist (www.escapeartist.com). Great info about people's personal experiences, cost of living, where and how to look for a home, how to buy property, where the expats are, etc. International Living also publishes a magazine, and they are always looking for the next up-and-coming places that are a bargain - they are big on Nicaragua and Panama right now, for example.

One other thought - you can go to www.homefair.com - it lets you compare living costs internationally.

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Fort Washington, Md.: I am one of the most vulnerable citizens in the Social Security debate. I am under 55 and over 40. I don't have the time to reap the perceived benefits of a personal account. I had planned on the three legged stool of pension (got), 401(k) & savings (got), and Social Security (now under negotiation). This concept prepared us for a comfortable retirement. Now that Social Security is being discussed on how it will change, what should I do?

Michelle Singletary: Honestly, keep saving as much as you can and pray that we find a solution to the Social Security crisis that doesn't destroy the one government program that has worked as intended.

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washingtonpost.com: Social Security Story Archive

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Bethesda, MD: Are there some places that are better than others to retire if you're single/widowed?

Jan Cullinane: Yes, there are some places noted as being especially good for singles (I'll use singles to include widowed, divorced, or never married). A few specific examples are Naples and Sarasota (both in Florida), Asheville, (NC), and Las Vegas (NV).

What makes a good singles' place? Some of the ingredients would be a rapidly growing area with people from lots of different places - people new to an area are often more receptive to making new friends. A vibrant city also tends to have many opportunities to get involved - of course, a great way to meet people.

Also, consider big master-planned communities or adult-targeted communities (Del Webb, Robson, and Hovnanian are some big names in the age-targeted group). These will have organized activities through their club houses - again, an easy way to facilitate meeting others. In addition, they are often gated, which can provide extra security.

If you're thinking you'd like to find a place where you can continue to live until you die, think about a CCRC (continuing care retirement community). These allow you to go from independent living to assisted living to nursing care (some have Alzheimer's units) all on the same campus. You can find a list of accredited CCRCs at www.carf.org.

Finally, although we're not personally familiar with the lifestyle we did get several glowing recommendations from singles about living in an RV - like one woman told us "If you don't like your neighbors, you can pick up and move!" It seems people who live this lifestyle go out of their way to help and support one another.

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Manassas, VA: Do you discuss anything about cohousing, both multi-generational and retiree-only? I saw an article about it in the AARP bulletin and am very interested. I like the idea of community but would like other age groups around!; Thanks.

Jan Cullinane: Yes, Chapter 6 of The New Retirement is called Niche Retirement Lifestyles. We include multi-generational, age-targeted (newer name for retirement community), living on a ship, college towns, new urbanism communities, and communal living/cohousing, among others!

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Confused, USA: My biggest retirement question regarding where to live is where will I live that's affordable in 20-30 yrs?...the places mentioned today may not be great (or affordable) tomorrow...coastal land may deteriorate and many college towns are questionable...only thing more confusing is will the investment paradigm change?

Jan Cullinane: Good question, as they all are. You may want to explore some of Harry Dent's books - he predicts the next big places (See Roaring 2000s, for example); places that are affordable now, but may be hot in the future!

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New Jersey: One thing that doesn't compute for me is the number of people saying they plan to continue working. Is this just rationalization because some people need the money? I know hardly anyone who has continued working after retirement except on the most sporadic and occasional basis, and most people I know would rather not continue working. There are so many more interesting things to do for volunteer groups - things that I could never get paid for in the real world, but beckon to me like a siren after retirement.

Jan Cullinane: Turns out there is a HUGE number of people saying they do want to continue to work (80 - 90% in some surveys).

Why? A lot for financial reasons, but for many people work gives people a sense of purpose, structure, they like what they are doing, contributes to their self-esteem and provides social interactions. For other people, they can't wait to stop!!!

A lot of people also think they want to continue working, but can never reach the same salary or level after leaving their primary position, so they don't work, although they had planned to do so.

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Michelle Singletary: Well, I can't believe the time when by so fast. Thank you all so much for submitting questions. And I'm sorry if we didn't get to yours. But Jan has volunteered to answer more,which I'll print in my column. You can also e-mail your retirement questions (colorofmoney@washpost.com) and I'll try to answer some in my weekly electronic newsletter (which I hope you all have subscribed to). Be sure to put "Retirement" in the subject head. For information on how to subscribe to my newsletter just search for my name on the Post web site.

Again, thanks for joining me today. And a many thanks to Jan.

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Viewpoint: Paid Programming