U.S. Markets open in 2 hrs 4 mins

Three keys to a great retirement


Hobbies help you maintain your identity.

The average retirement-account balance rose by 6 percentage points in the past year, the largest gain we’ve measured since the financial crisis hit in 2008, according to a recent retirement survey of online subscribers by the Consumer Reports National Research Center.

But if you’re feeling buoyed enough to start your countdown to retirement, take note: Our survey also identified three factors—not all monetary—that can undermine retirement satisfaction. Here’s how to address them.

[More from Consumer Reports: Top electronic products]

Set money boundaries

Create realistic financial limits with your adult children, especially those more likely to seek your help. Retirees in our survey who reported family concerns had less positive experiences after retiring than those who didn’t. And leading the list of such concerns was financial support for adult children (17 percent) and elderly parents (3 percent). Our readers were generous, providing a median of $8,990 annually to family members.

Jon Gallo, an estate attorney in Los Angeles, and his wife, Eileen Gallo, a psychotherapist, have written two books on family financial literacy. They say that for adult children, four types of expenses are worth paying for, at least in the short run, because they can foster independence: tuition, vocational testing, health insurance, and specialized services, such as psychiatry and treatment for substance abuse.

With any subsidy, the Gallos say, you should communicate your expectations up front and set monetary and time boundaries—in writing. For example, if your son wants to live at home to save money, he should tell you how he plans to earn money, what he’s saving for, and when he’ll be leaving.

In the interim, you can charge rent, assign chores, and even require that he pay interest if you decide to give him a loan. If the money you provide is a gift, limit the amount but don’t attach strings.

Get your house in order

Address your housing situation well before retirement. Our survey found that only 43 percent of respondents who felt stuck in their homes were highly satisfied with their retirement, compared with 71 percent who didn’t feel stuck. Seven percent of respondents said they wanted to sell or downsize but couldn’t.

A home that’s selling for just a bit less than comparables in your area will sell more quickly, real-estate experts say. Pricing it at a round number—say, $250,000 rather than $249,000—will get the attention of buyers searching online for homes up to $250,000 and those looking for homes costing $250,000 and above. And consider improvements that might help you sell. Remodeling magazine’s 2011-2012 list of home-improvement cost-to-value figures includes several projects that can add to curb appeal: a steel entry door (73 percent of the cost might be recouped), a garage-door replacement (72 percent), a wood deck (70 percent), and vinyl siding (70 percent).

[More from Consumer Reports: Appliance ratings and reviews]

Reach out

Plan for hobbies or a second career to ease the transition into retirement. Our survey found that letting go of a familiar identity, say, as an employee of a company or member of a profession, can take its toll. Survey respondents who reported a loss of identity in retirement were only one-third as likely to be highly satisfied as those who felt no such loss. That gap didn’t vary with income.

Nella G. Barkley, CEO of Crystal-­Barkley, a life- and career-coaching company in Charleston, S.C., offers this suggestion. First, list your "inventory of skills," such as troubleshooting or the ability to direct groups in decision-making. Ask others to evaluate you, too, for fresh perspectives.

Match those skills with pursuits—either paid or unpaid—you’d like to try. An accountant who wants to play in a jazz band, for instance, might first offer bookkeeping services to one, which could lead to informal jamming and maybe performances. Researching your interest will help you find people doing what you’d like to do. "Then," Barkley says, "you get sent to the other people who are active in that world, and your knowledge grows."


Update your will after a second child is born.

How are you doing? Better.

Thirty-six percent of subscribers told us they were better off financially than they were a year ago, and 20 percent reported being worse off. That’s a reversal from the results of our 2011 survey. The chart at right shows how our subscribers’ fortunes have fared since the 2008 financial crisis started.

Consumer Reports has no relationship with any advertisers on Yahoo!

Copyright © 2009-2013 Consumers Union of U.S., Inc. No reproduction in whole or in part without written permission.

More From Consumer Reports