Think Like a Retiree

Richard Connor

I’VE BEEN TRYING to imagine what the immediate future will look like. How do we make sense of a situation where we seem to have so little control? You hear estimates of a few weeks to 18 months before things get back to normal.

I’ll admit I’ve lately had many sleepless nights worrying about all of this. How can we think about the financial implications in an organized way? It strikes that maybe we should ponder the financial issues we currently face in the same way we think about retirement.

Cash flow. As part of a solid retirement plan, we should identify the income available to sustain decades of not working. But today, instead of decades, we need to focus on the months ahead.

Unemployment is rapidly becoming a reality for many people and it’s highly likely for lots of others. What short-term income sources are available to these folks? Possibilities include unemployment benefits, savings, part-time or temporary work, home equity loans, family loans and selling possessions.

The other side of cash flow is expenses. What’s necessary and what isn’t? Many families will need to make tough choices. Could you delay or negotiate down some expenses, such as rent, mortgage and car loans? It’s best to be proactive with your lender or landlord if you think you’ll have trouble paying. It also looks like some government support will be coming, plus the tax-filing deadline has been extended until July 15.

Health care. Many early retirees, until they turn age 65 and become eligible for Medicare, struggle to find adequate and affordable health care. If you’re forced out of your job in the weeks ahead, you may be able to enroll in your former employer’s health care plan, thanks to COBRA. But be warned: The premiums could be steep. There are also health care plans available through the state exchanges, short-term (or gap) plans, and Medicaid and other government-sponsored programs. Check out for a comprehensive list of the options available.

Housing. Retirees spend a lot of time considering where to retire and what type of housing they want. Today, you might rethink your housing situation based on government actions (business shutdowns, shelter-in-place rules), local conditions (access to health care and groceries) and your own finances.

Can you work from home? Would it make sense for distant families to combine? My wife and I discussed going to our vacation home for the duration. But we realized it wasn’t equipped for a long stay. We feel we need to be in our main home, which has basically everything we need for the long haul.

Daily activities. Retirees need to think hard about what their days will look like. The transition from a long and meaningful career to not working is often difficult.

Similarly, being told to shelter in place is a huge transition. But we aren’t getting much time to plan, so we’ll have to figure this out in real time. Many of our best-known and beloved routines have come to a halt. It’s really hard to plan long-term when we don’t know how long the situation may last. But we don’t have much choice.

For instance, you may be struggling to work from home, while suddenly being responsible for homeschooling your children. My son and daughter-in-law are self-isolating. Each day, they put an agenda on the chalkboard for their two young sons. It includes school subjects, projects, outdoor time and activities. It gives the boys much needed structure, as well as plenty of time for play, and the kids are handling the situation well—so far.

Richard Connor is a semi-retired aerospace engineer with a keen interest in finance. Rick enjoys a wide variety of other interests, including chasing grandkids, space, sports, travel, winemaking and reading. His previous articles include Not Too LateCheat Sheets and Choosing Life. Follow Rick on Twitter @RConnor609.

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