With the first of nearly 80 million Baby Boomers applying for Social Security benefits this past October, and an estimated 10,000 people a day becoming eligible for Social Security benefits over the next two decades,¹ an interesting question emerges: When they retire, what will all these people do with their lives?

What will you do when you retire?

Americans are living longer than in the past, notes Prill Boyle, author of Defying Gravity: A Celebration of Late-Blooming Women. But longevity itself, even enhanced by advances in health care, doesn't ensure a satisfying retirement. "After all," Boyle asks rhetorically, "how much golf can you play?"

Plan 'Out of the Box'
Whether your retirement is years away or just around the corner, Boyle suggests adopting a fresh perspective. "Think of life as a series of chapters," she says, "rather than just a beginning and an end. Look at retirement not as a restriction, but as the opportunity to try new things."

While retirees will always want to travel more, enjoy hobbies and spend time with family, Boyle points out that people in their 60s, 70s and even 80s are more assertively choosing other pursuits-especially volunteer work. Over 46% of persons ages 55 to 74 reported performing some type of volunteer work in the past year. Almost 34% of those 75 years old and older reported volunteering.² (For more information on volunteering see "Do Good" to the right.)

"Organizations are increasingly recruiting older volunteers, who can offer wisdom and experience," Boyle explains. "Retirees of virtually any age can apply; the oldest Peace Corps volunteer is now 80. And you don't have to wait until retirement to get started."

Plan Relationships
For Jan Cullinane, co-author (with Cathy Fitzgerald) of The New Retirement: The Ultimate Guide to the Rest of Your Life, the post-career period has undergone such enormous changes in recent years that old labels no longer apply. "We need to redefine retirement," she says.

For example, many retirees are continuing to work at least part-time after the traditional retirement age. And with average life expectancies continuing to rise, Americans may need to plan on spending 20 to 30 years-or up to a third of their lives-in a post-career 'retirement' period.

Cullinane recommends that people contemplating retirement invest a considerable amount of effort in planning their futures. "The first two years after you leave work can be the most challenging," she maintains. "There can be a big disconnect between expectations and reality-not just financially, but also with relationships between spouses and committed partners. You suddenly find yourselves together all the time. How do you fill those 168 hours every week? It takes planning."

Cullinane offers seven keys for a successful retirement:

1. Build a strong social support network. Friends do matter.
2. Have something to wake up for every day-whether it's a hobby, volunteer position or part-time job you enjoy.
3. Take care of your spouse or partner. If one of you is in good health, it's more likely the other will be healthy, too.
4. Adopt a positive attitude about aging. Exploit new opportunities to follow your passions.
5. Exercise your body and mind. Old assumptions that retirement has to mean physical inactivity and inevitable mental decline are myths.
6. Be willing to renegotiate roles with your spouse or partner. A "staggered retirement," in which one spouse retires before the other, can help you both ease into new patterns.
7. Develop and follow a strong financial strategy.

Plan Financially
Of course, along with planning important quality-of-life issues, you need to also prepare to accumulate the financial resources necessary to accomplish your goals. You may now have to plan for 25, 30 or even more years in retirement, and living your dreams takes money. Health care expenses alone could cost a 65-year-old couple who lives to average life expectancy as much as $295,000 for health insurance premiums and out-of-pocket expenses during retirement.³

How can you build a retirement nest egg that will last as long as you do? Here are three recommendations:

• Don't be too conservative. When investing for a long-term goal like retirement, putting your money in "safer," lower-yielding investments means risking that inflation will significantly erode the future purchasing power of your savings. Investing at least some of your retirement portfolio in stocks could help you outpace inflation. One rule of thumb: Subtract your age from 120 and keep that percentage invested in a well-diversified portfolio of stock mutual funds. (See chart below.)
• Rollover assets. If you change jobs and are eligible to receive a distribution from your retirement plan, don't spend it. You could lose thousands of dollars in taxes and penalties. Instead, transfer the money into a new plan, such as a rollover IRA.
• Rebalance your portfolio periodically. Ask your investment professional to review your portfolio at least once a year and rebalance your assets, if necessary, to conform to your desired allocation.

Cullinane acknowledges there could be shortfalls between the assets you need for retirement and your actual savings. One solution is to keep working, even if you do so on a modified schedule (perhaps part-time or on a consultant basis). Cullinane observes that working well into your 60s or 70s is hardly an exception these days.

"Almost one in four people (23%) between the ages of 65 and 74 were still in the labor force in 2006," she notes. This is up from about one in five at the beginning of the decade.⁴

"If that's what you want to do, then work," says Cullinane, "whether for financial reasons, to receive health care benefits or just because it fulfills you."

Of course, she adds, the sooner you start a long-term savings program, the more options you're likely to have in retirement.

Maximum contribution limits may vary based on the type of tax-deferred savings vehicle. Investors should consult with the plan administrator if they are uncertain of plan contribution limits.