Retirement Planning and Living

Retirement can be a gateway to your own personal golden era. The key: A carefully crafted plan. Use these tips from local experts to get started.

#1 Downsize early.

By the time we are 55 years old, we should begin culling through storage areas, says Carolyn Morrison, marketing director at Pohai Nani Good Samaritan Retirement Community. Ask yourself what you absolutely need to keep, especially if you plan to move into a smaller space. And make the process meaningful. “Instead of buying a birthday gift, give your treasures to your loved ones,” she says. “You can see the joy.”

#2 Give gifts strategically.

Seniors who plan to make sizeable gifts after 2012 should consider making the gifts before 2012 in order to take advantage of the current $5 million gift exemption, which allows you to give up to $5 million in assets to heirs gift tax-free, says Rex Matsumura, a Honolulu attorney who specializes in estate planning. “It’s only good for two years, 2011 and 2012,” he says. Matsumura also points out that the gift exemption will be $1 million after 2012. With the federal government looking at ways to increase tax revenues, it’s uncertain that the gift exemption will be increased back to $5 million after 2012.

#3 Meet your neighbors before a move.

If you decide to leave your own home, make sure your new community offers ready social connections, says Bob Ogle, team leader at Kisco Senior Living. Ilima at Leihano opens in 2013, but prospective residents can get a preview of the Kapolei senior living community by attending exercise classes, (yoga, zumba, hula) and sampling their other advance programs such as their Ekahi Club, which consists of future members of the Ilima community. The club invites future residents to get together for educational seminars (on identity theft, for example), for charity events and to provide input on the community itself. It also highlights member accomplishments, birthdays, anniversaries, etc.

Ogle encourages people considering a move to think about their proximity to friends and family, as well as their access to social organizations. Tour the campus, and sample a meal. “Talk to people who live there, because they will become part of your community. This is one of the major decisions of your life.”

Arcadia offers residents a full schedule of programs and activities.

#4 Weigh the social cost of aging at home.

The majority of retirees choose to live at home as long as possible. But as we age, the costs of maintaining our own residences can affect more than our wallets, says Jan Kaeo, marketing director at Arcadia.

The organization offers senior services ranging from home health care to day programs and retirement communities. One of the downsides home-based clients often fail to consider is socialization, Kaeo says.

“When you stop driving, you stay at home,” she says. “It can be very lonely. The benefit of a community is to have programs and activities in place that give a lifestyle with independence.”

Establishments like 15 Craigside, a 170-apartment community for moderate-income seniors that Arcadia opened in March, offer a changing roster of activities and classes, as well as the opportunity to resume long-abandoned interests and hobbies.

“We have worked hard to change the paradigm of senior living,” Kaeo says. “At one time, moving into a community was the beginning of the end. That’s really changed. It’s about living the best possible life. Our residents have an opportunity to accomplish great things in the last years of their lives.”

Kahala Nui's residents enjoy life on a 6-acre garden campus.

#5 Consider the full continuum of care.

You might be drawn to a retirement community with a full slate of activities, but it’s important to consider your future health needs, says Pat Duarte, president and CEO of Kahala Nui, which offers a full range of care options, from individual apartments to an on-site nursing facility.

“You need to really understand what the life care benefits are,” Duarte says. “We don’t have as many nursing homes as most states, so for long-term nursing care, the options may be somewhat limited. The first available bed may not be your choice. That’s one of the reasons a lot of people go to a continuing care facility.”


Kahala Nui guarantees its residents a place in its nursing facility, he says. “We take care of the individual for life.” There can also be financial benefits. The community offers its long-term residents a 50 percent reduction in the cost of nursing care.

Duarte encourages seniors to move into Kahala Nui while the full benefits of a life on the 6-acre garden campus are within reach. “We keep you active and engaged,” he says. “It improves quality of life and helps you remain independent longer.”

#6 Think about purchasing a long-term care policy.

“We’re definitely starting to see an increase in the number of people using the insurance,” says Tricia Medeiros, regional director at Plaza Assisted Living. The company operates an assisted living community in Punchbowl and recently opened a second location in Mililani. Medeiros recommends shopping for a long-term care policy in your 50s, when the premiums are low. Make sure that the insurance covers the level of care you will want in the future.

#7 Take another look at reverse mortgages.

Take another look at reverse mortgages. While some advisors consider these multifaceted financial products for those in serious need, many homeowners 62 and older have tapped into their home equity for a number of good reasons, says Wendy Oshiro, a reverse mortgage professional at Generation Mortgage Company.

“We have to look at the whole financial picture,” she says. “My emphasis is on education.” Homeowners who meet age requirements and have significantly paid down their mortgages may be eligible for the loans. They would first use the loan proceeds to pay off any existing mortgage, thus eliminating any current monthly mortgage payments. The homeowner then continues to pay taxes and insurance, live in and maintain the home.

Additionally, the FHA introduced a new product last fall that helps qualifying homeowners reduce loan fees, Oshiro says.

The benefits need to be evaluated on a case-by-case basis, she says, and she never uses a hard-sell approach. “Reverse mortgages are more about helping families stay in their homes. It’s about quality of life.”

Wendy Oshiro, NMLS #391477. 888-688-6144. Generation Mortgage Company-NMLS #1319. Equal Housing Lender.

#8 Put a premium on flexibility.

You should feel at home in a senior care residence, says Elizabeth Slavens, president and executive director of KinaOle Estates, which operates adult residential care homes on the Windward side.

Find out how management responds to residents’ concerns, she says. While you may need to make concessions to a new community, your voice should count.

“No facility is perfect,” Slavens says. “Communication is the most important thing. If the facility is willing to listen and try to make things right, then there’s a good relationship.”

She recommends researching facilities early. Vacancies can be rare in the eight-bedroom homes KinaOle operates, and interest in a planned fourth home has been high. “If the time comes, you should know where you want to go.”

#9 Invest early, invest wisely.

“Having some money as we get older is going to be a good thing,” says Gregg Takara, vice president and a member of the top-rated Strada/McRoberts Team at Morgan Stanley Smith Barney. “Do whatever you need to do to save more money, and start, or add to, your retirement plan.”

Your investment strategy, of course, is dependent on your age, risk tolerance, and time to retirement.

But smart investors should look at long-term trends, Takara says.  Consider large, multinational companies that have taken years to develop market share, and that have gained pricing power and access to global markets. As the population grows, commodities including copper, lead, zinc, water and timber could represent opportunity, as could the companies that transport or develop those and other commodities. “I am, however, currently underweight in gold, silver and oil,” Takara says. “The prices at this level are too speculative.”

The Strada/McRoberts Team anticipates that interest rates will rise soon, and has decided to trade duration risk for credit risk, he says. That means selling anything that has a maturity and investing either in fixed income products with a variable coupon or interest rate, such as Treasury Inflation Protection Securities (TIPS), or in products with a lower credit rating, such as senior floating rate funds and high-yield bonds.