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retirement

Securing Retirement

We can always take a cue from the past and move in with our kids, but I hope we won't have to.

Devon, the daughter of one of my colleagues at Kiplinger, recently landed her first teaching job. She called her mom for advice on choosing benefits, which included a traditional defined-benefit retirement plan that she found incomprehensible. “Where’s the 401(k)?” she wondered.

There's no guarantee that Devon, who is 22, will be around long enough to be vested in her pension plan -- or that the school district will be able to afford it (see Public Pensions Get an Overhaul). But it’s encouraging that young people like her are already thinking in terms of saving for their own retirement. They won’t come up short, as many baby-boomers have in the wake of the housing bust and an up-and-down stock market. For people in that position, the options are limited. “Spend less, save more, keep working longer,” as former White House budget chief Alice Rivlin summed it up in an interview with Kiplinger’s last month.

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We can always take a cue from the past and move in with our kids, but I hope we won’t have to. As Rivlin pointed out, various reform proposals would shore up Medicare and Social Security without affecting retirees and those within a decade of retirement. She noted that these proposals have been mistakenly attacked for “throwing Granny off the cliff in a wheelchair, and people are worried ‘That could be me.’ Well, it couldn’t.” At age 80, Rivlin herself has authored a fiscal-reform plan.

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In addition to the safety net, other innovative programs and products are in the works to provide a secure retirement and to make the “spend less, save more, work longer” mantra less grating. In our cover story, Mary Beth Franklin describes one worker who’s easing into retirement and another who started a second career as a successful blogger. Mary Beth says she has “great faith that the financial-services industry will create appropriate products to help Americans turn their savings into a stream of income."

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And don’t discount the ability of people to adapt. A journalist friend of mine wrote a touching tribute to her financially savvy mother, who lived to the age of 90 on a modest income. What my friend learned from her mother was that “retirement spending is flexible, and down­sizing doesn’t ruin your life. People will curtail their expenses to make their money last.”

Moving in with your kids may not be an optimum solution, but as guest columnist Chris Farrell writes, sticking close to home has its advantages. You can keep your personal and professional networks intact -- which may come in handy when you’re charting that second career.

The best cars. When my husband and I were recently in the market for a new car, the first person I consulted was associate editor Jessica Anderson, who writes about cars. I confessed that we were interested in a Honda Odyssey minivan -- even though we no longer qualify as soccer parents and our 23-year-old son is mortified. I learned that many boomers are going the minivan route for the same reasons we did -- a comfortable ride on long trips, space for hauling the occasional piece of furniture, and plenty of room for seven adults when the family comes home.

Jessica confirmed that the Odyssey retains its Best in Class award in our annual car rankings, and she pointed me to a buying service, which made our transaction the easiest car purchase we’ve ever made. You can benefit from Jessica’s expertise in this year’s rankings. Meanwhile, I’m all set if I ever become a soccer grandmom. And my son will just have to deal with it.

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