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Retirement Special:
Post Columnist Stan Hinden
Lessons Learned in Retirement

Monday, September 27, 1999, at 11 a.m.

Columnist Stan Hinden retired from The Post three years ago and writes Retirement Journal. Now that he's living in retirement, there are several things he'd do differently to support a comfortable lifestyle in retirement, from investing and saving to learning about such topics as Social Security, medigap insurance and mandatory IRA withdrawals.

Here's your chance to learn from his experiences.

Transcript Follows

Herndon, Va: Enjoy reading your articles. Was wondering if you debated issues about where you would retire, whether being near family was a controlling factor, or discussed lifestyle issues? Is this area, its traffic, etc. a good place for you in retirement?

Stan Hinden: My wife and I spent some time thinking about whether we wanted to move to Florida, where we have many relatives and friends. However, our children and grandchildren are in this area and so we decided to remain here where we would be close to them. I found that the cost of living in Florida might be somewhat less expensive but the desire to be close to our immediate family outweighed the economic considerations. Of course, one of the great advantages of living in the Washington is the access to the museums, theaters and other cultural offerings of the city. I recently received a letter from a couple that decided to retire from New York to Washington because of its cultural attractions.

Portland, ME: Do you have -or recommend- long term care insurance?

Stan Hinden: My wife and I do have long-term care insurance. It is a group policy that we bought through The Washington Post. It pays $125 a day for nursing home care and $55 a day for home care. It costs about $2,000 a year for both of us. The cost is less than otherwise because it is a group policy. I think LTC is a good idea if you can afford it without adding too much stress to your retirement budget. Nursing homes are very costly, although one's chances of going to a nursing home are fairly low. The decision depends on both the state of your health and your finances. It's good to remember that the younger you are, the lower the cost.

Bowie, Md.: Have you experienced boredom?

Stan Hinden: Fortunately, no. Because I had an opportunity to continue to write on a free lance basis after I left my regular writing job at The Washington Post, I have been very busy. My wife says "too busy." But it made me realize that it is very important to continue to be active in retirement. I think that long before you retire, you should decide what activities you want to pursue in retirement. Retirement is a major change of lifestyle. You tend to get cut off from friends at the office and many people miss their workplace. The rule is: Stay active and stay involved with other people. That's important for a happy retirement.

Rockville, MD: We would like to downsize from our house. We estimate to purchase a condo, it would cost the entire net gain we will probably realize on our house. Should we pay cash for the condo or should we take a mortgage with either a large or small down payment?

Stan Hinden: This is an interesting question--and one that requires some calculations. Many people I know are more comfortable knowing that they do not have a mortgage. Others feel that they would rather use the money available for investment purposes. And that they want to take advantage of the home-interest deduction. You may want to ask an accountant to weigh the choices in light of your income, assets and tax situation. There are a number of factors that would go into this decision. In any event, my wife and I find that living in a condo spares us a great deal of work. I am happy not to have to shovel that long driveway in the winter any longer.

Frazer, PA: My husband and I currently have approximately $100,000 saved in our 2 401k accounts. I am 28 and he is 31 years old. By the time we reach retirement age, will we have enough to retire with comfortably? We are both contributing between six and ten percent of our salaries, and both our companies match 50 cents on the dollar up to 6%. Thank you.

Stan Hinden: It's hard to say how much money you will need to retire 30 years from now. But you certainly have made a good start. Far better than I did at your age. Fortunately, you have the most power investment tool: TIME. The return on stocks over the last 40-50 years has been about 10 percent. And if you are investing in equities during the next 30 years and the markets follow their historic pattern, you should be in pretty good financial shape.

Silver Spring, Maryland : What would you have done differently about SS and Medigap. I have both -Gap Plan C- Do you have suggestions?

Stan Hinden: I guess the main thing I would have done differently is to make sure that I studied and understood how Medigap plans work, what they offer and what they cost. If I had done that I would have been better equipped to make a decision on the plan that was best for us. This is a lot of work, and you really have to do it long before you retire.
As for Social Security, I did not know that you can retire at 62 and accept a lower payment, retire at 65 for a normal payment or work till 70 and get an additional payment for each year you wait after you turn 65.
Here again, there is a lot to learn--before you retire.

Arlington, VA: HI Stan! I just wanted to say you are really an inspiration to me! At age 26, I find it difficult to conceptualize the issues I will have to think about for retirement, even though I am trying to save as much as possible. Thanks for your great columns b-c they really elucidate the issues for me. Keep up the good work and all the best to you and Sara! :-

Stan Hinden: Thanks for your kind remarks about my column. Writing Retirement Journal has been very rewarding because there are so many people who care about issues facing retirees.
If you are thinking about retirement issues at age 26, you have my admiration. I know from experience that it is so hard when you are young to think 40 years ahead. And yet it is so important. Like many people, I thought retirement would NEVER come. Yet, one day, I turned around. And there it was. Where did all that time go?

Alexandria, Virginia: My husband retired from a very stressful job two years ago and is says he is really happy just sleeping, eating and doing "desk" work. -I retired so we could travel and we try to do as much of this as the purse allows.-I worry that this sedentary kind of life will be a quick downhill road. How do retired folks find an interest that gets them moving?

Stan Hinden: I have known many people who have decided that they worked so hard for so long that they want to spend their retirement simply "playing" or at least not doing anything stressful. I guess that's fine, if that's what works for you. On the other hand, all of the experts say that it's important for retirees, especially people who have led very active business lives, to remain active and involved with people. There are so many things you can do once you don't have to deal with a job. Hobbies, civic activity, working for charitable organizations. If you are lucky, you can be retired for 20 or 30 years. And I think it's a good idea to fill up those years with endeavors that bring personal satisfaction.

fairfax,va: What process did you use to select the type of retirement housing you have today? Are you in a CCRC? Wouldn't that eliminate the need for LTC insurance? How many different types of communities did you research before deciding?

Stan Hinden: About 7 years ago, my wife and I sold our large five-bedroom house and moved to an apartment in a high-rise condo in a retirement community. . It's smaller, of course, but has many advantages, including recreational facilities. But it has no medical component, such as a CCRC would have. We have looked at a CCRC and found it to be very interesting, although taking up residence in one of the single-family homes requires a large investment. But the cost of care at the nursing home level is not built in and so a LTC policy might still be useful--I believe. Although I'd have to check with several CCRCs to be sure. However, if you want to establish a plan for your future care, a CCRC is worth considering.

Staunton, VA: In regard to SS. I understand that if you retire at 62 and take a lower payment it will be about 10 years before you will make up those payments you'll receive from 62 to 65 than if you wait until 65 to collect. Have you heard anything like this?

Stan Hinden: It is true that if you retire at 62 and take a lower Social Security payment, you will get back the money that you didn't get for the three years between 62 and 65. I'm not sure whether it will take 10 years or not. Social Security might be able to tell you that. I was under the impression that you might get most of it back when you reached 65.
But we'd have to check on that.

Rockville, MD: What strategies have you put in place with respect to taking payouts form your IRAs and 401Ks?

Enjoy your articles very much. Hope to see many more.

Stan Hinden: Thanks. Glad you enjoy the column.
Although you can start making withdrawals after 59.5 years, I am mostly familiar with the required withdrawals after 70.5 years. Many folks try to take the minimum because all of the money you withdraw is taxable. When you devise your strategy, remember the tax factor.

Rockville, MD: Hi Stan. I'm glad to hear that Sara talked you out of selling her GE stock. I worked with Sara at GE - we affectionately referred to the training center she ran as the "House of Hinden." I worked for GE for six years, socking away the max 7% GE would match. I also moved all my other 401k funds into GE. When I bought most of my GE it was selling in the 20s - before the split! Though I'm 10 years from retirement, it's my GE 401k that's going to fund it! Good luck to you and Sara.

Stan Hinden: Thanks. Sara and I both thank you. Would that all our stocks did as well as GE. We would be much better off.

Stan Hinden: Thanks to everybody who sent in questions today. I appreciate your interest in my column and in the ways that we can all have better retirements in the future.

© Copyright 1999 The Washington Post Company

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