Why Your Retirement Plan Should Include Ice Cream

Barron’s: When talking about longevity and retirement, you’ve asked people, “How will you get an ice cream cone?” Why start the discussion with dessert?

Joseph Coughlin: Many people, even financial professionals, may think it’s a silly question. But it has two components. First, it gets you to think about what the little things are that make you smile. What is it that you want to do every day? In my case, it’s an ice cream cone. But the second dimension is: Do you have the ability to get there?

The second-largest cost for people in retirement is transportation. We live in a country where if you don’t drive, you aren’t getting there. So, the ice cream cone question is about: Do you have the things that make retirement a quality life, and do you have the ability to get there?

As people are thinking about where they want to live or move, they should do an audit of their choices. Are things close enough to you that you can bike or walk? Is there public transportation? Many of us live in areas where that option might not exist.

In other words, it’s the little things in life that count?

Yes. The little things that make me happy are a blueberry muffin, a cup of coffee, and a newspaper.

Another question to think about: Who is going to change your lightbulbs? Longevity planning is about not just whether you have the money to do these things, but also are you prepared to do them? And if you couldn’t, do you have the things in place to make sure they continue to get done?

Third question: Who will you have lunch with? That gets to not just how good is your investment portfolio, but also how good is your social portfolio? Do you have friends? If you’re moving in retirement, will you be able to find new friends? It takes time to make a good friend. This also gets at quality of life.

How have perceptions of old age changed?

I just came out of a meeting looking at new survey data that showed people are actually a little reticent about living to 100. The traditional story about old age is that it means old and infirm.

But it isn’t that anymore. We’re seeing old age transforming from a problem to personal opportunity. It’s another life stage, not a life end.

I’ve identified four different phases of retirement. First: navigating ambiguity. When you first retire, you’re thinking about trips, a new car, all the stuff you put off for 30 or 40 years. You see people who volunteer with as much energy as they put into their former work. Some people take on part-time jobs.

Over time, you move to the next phase: big decisions. Is it time to truly stop and have a traditional retirement? Is my home the one I want to continue to live in? I borrow a line from the Clash: “Should I stay or should I go?” At every other stage of life you have celebrities and influencers telling you what to do. But when you reach 65, you don’t.

The third phase is about managing complexity. The big lie about retirement is that this is a time to relax. That’s true for a lot of situations, but it can get difficult to manage some of the day-to-day. You may be taking medications or taking care of a loved one who needs care.

The final phase is living solo. At some point, you are likely to live alone. And this is predominantly a female issue. One of the fastest-growing households is a household of one. When you move through those phases, have you prepared for them? Have you identified trusted providers? Financial planning is about the money; longevity planning is about life.

In your book, The Longevity Economy, you wrote about The Villages, a huge and hugely popular retirement community in Florida. What are the benefits and drawbacks of those kinds of communities for retirees and society?

Let’s start with society. The trouble with how we currently define retirement is that we ask a still purposeful and productive part of society to just go away. To withdraw. That is a loss to society. That is a slice of our society with knowledge and wisdom.

Retirement communities provide people with recreation and opportunities for social connection. That’s good. But I’m skeptical that the younger baby boomers and older Gen Xers will relish those communities. To quote Bob Putnam, a sociologist who wrote Bowling Alone, the generation coming up didn’t join bowling leagues. They didn’t join [social clubs].

What is the alternative?

Our research has shown there are benefits to living in a multigenerational community, meaning people of all ages, not just people who are my age. To live longer and better, you have to remain vital. You want to meet and encounter different types of people of different ages. You want to do and try new things.

When thinking about where to live and the ideal community, look for intensity, density, and accessibility. That means you’ll see and try new things. Is it close enough so it isn’t a major project to get there? And accessibility—can you afford to get there? We make a mistake in thinking retirement is just relaxation. Some people think, “Oh, the wife and I like walking on the beach. We’ll move to Florida and do that.” But what if they don’t have friends down there?

Are college towns an example of that kind of dense, multigenerational community?

Yes. They’re naturally occurring retirement communities. You’ve got sports, cafes, interesting people. Major university towns also typically have a medical college and hospital. So, by moving to, say, Ann Arbor, Mich., or Providence, R.I., you’ve got access. No one goes to Ann Arbor for the weather. They go there for the lifestyle.

You’ve written that women are the future of retirement. What do you mean by that?

The retirement industry is changing, but many people [still] love to focus on guys like me: middle-age men. Traditionally, these have been the breadwinners, but that is misleading and incomplete. Women are the chief financial and purchasing officer of the home. They make 90% of decisions around healthcare, what goes in the home, who is doing what, and they are more likely to be the primary caregiver, not only for their parents, but also their partners’ parents. They end up caring for more older adults than the number of children they planned on having.

So, not only do women have a primary consumer role—even among the wealthy, the person who ends up doing the caregiving is more often than not a female relative—but they are also likely to live longer.

What has changed since your book was published in 2017?

The good news is that aging is on the global agenda. The pandemic showed us that technology can help with connection and access to services. Things that the boomers were scoffing at the millennials for—“What, you have everything delivered?”—they were suddenly adopting themselves. We found that we could create a kind of virtual assisted living in our homes.

When I started at the MIT AgeLab in 1999, it was very hard to find companies that would talk about aging. Today, it’s easy. The 60-plus demographic would be, if you put them all together, the world’s third-largest country. So, aging is on the agenda of major companies, innovators, and the like.

The whole discussion around inclusion is beginning to include people of different ages and abilities. We see more communities that want to be age accessible because they care about building communities for all. Curb cuts are great for baby carriages as well as wheelchairs.

Turning the tables on you here: How will you get an ice cream cone, and what flavor will it be?

My wife and I have decided to age in place, but it’s in a place developing its own mini transportation system. So, on a hot summer night, when I suddenly say I want an ice cream cone, I’m going to get a dark chocolate. There’s no better flavor.

Thanks, Joseph.

Write to Andrew Welsch at andrew.welsch@barrons.com