Worry-Free Retirement

But what happens when the formula doesn't apply? It certainly didn't work for Peter Fuechsel, a Glenwood, Md., engineer. For more than a decade, Fuechsel followed a traditional route, saving as much as possible so he could swap his research lab at Johns Hopkins for a full-time life of leisure by age 62. His plan worked like clockwork — until the day of his retirement dawned and: "I just wasn't ready to give it up." Dreading the thought of not working, he negotiated a three-day-a-week schedule, but he's paying the price for his earlier strategy. He's stuck in his employer's less-flexible retirement plan, and he even had to reimburse the government for the Social Security he collected.

Today's retirement is more complicated and often less predictable than ever before. Thanks to upbeat trends, like our society's increasing health and wealth, and a more unsettling one — the demise of the corporate pension — our most basic assumptions about the very term "retirement" are up for grabs. The postwork years look less like a time of serene sameness and more like an endless array of options. "Sometimes people are baffled by the range of choices," say Ron Manheimer, executive director of the North Carolina Center for Creative Retirement in Asheville, which teaches courses designed to alleviate that confusion. "Now people have to come up with their own plan." And as they do so, they're reaching another, anxiety-inducing realization: Each retirement plan has a very different price tag.

In fairness, the financial world's calculators and five-step plans try to help people manage this morass. Psychologists have found that faced with too many choices, many people don't choose at all — putting off planning and preparation that they badly need. But for a lot of people approaching their 60s, the ideal retirement is far from formulaic. One reason is that with people living longer and staying healthier, the typical retirement now lasts about 20 years, up nearly 50% since 1970. Shifts in financial assumptions are also changing the game. In previous generations company-sponsored pensions effectively dictated when you retired and how much you'd spend. But these days most companies opt for "defined contribution" plans, like 401(k)s, which saddle workers with more responsibility, more decisions — and more uncertainty.

In talking to retirees and advisers across the country, we found that people with a clear idea of what they wanted from retirement — people with distinct retirement "personalities" — sidestepped much of the worry. Above all they had an edge when it came to making sound plans and saving the right amount. Five personalities emerged from our reporting.

Lamar and Debbie Johnson retired to their plush golf-course home, complete with an "outdoor living room," in the hill country outside Austin when their son graduated high school. Golf fees aren't the only reason to make sure you have enough saved: The cost of care for retirees has skyrocketed in recent years. And the asset Lamar thinks is crucial to retirement happiness? Long-term-care insurance. Families with assets between $500,000 and about $2 million are prime candidates for the coverage, says Kirk Kinder, a certified financial planner at Picket Fence Financial — they're too wealthy to ever qualify for Medicaid but not wealthy enough to absorb all the costs of a nursing-home stay.

Fornelius's motives may not be financial, but workaholic retirees like him have a monetary advantage over their peers — they can make a smaller nest egg cover more years of retired life and pay for a better quality of life. For people retiring at age 55 and older, continuing to work for a single year boosts postwork income — from pensions, Social Security and investments — by an average of about 9%, while an additional five years on the job translates to a jump of 56%, according to the Urban Institute, a Washington, D.C., research group.

But Beckman was able to put things on firmer footing with surprising speed. After hearing about a job from a former coworker, she started working as a freelance illustrator — and at a higher rate than she'd earned before retiring. Because an annuity she bought a few years ago is covering many of her expenses, she has been able to bulk up her savings. As a self-employed person, she was able to open a solo 401(k) and put nearly all her freelance earnings in the retirement kitty. Additionally, the income has given her the financial cushion to allow her to put off collecting Social Security until she turns 66, when she'll be eligible for 100% of her potential benefits, as opposed to the 75% she'd get if she were collecting now.