Retirement is work

YOU KNOW THE saying "It's not rocket science."

Well, today's retirement planning is rocket science. It's often confusing and overly complex. There's so much you need to know.

Let me put you to the test. How much do you know about the following?

*  When to take your Social Security. Securian Financial Group surveyed baby boomers age 50 to 65 about their plans for claiming Social Security retirement benefits. Only 18 percent knew how or when to go onto Social Security.

* The cost to have Medicare. Nearly three-fourths of boomers surveyed by Bankers Life and Casualty Co.'s Center for a Secure Retirement didn't know that most Americans on Medicare pay premiums, co-pays and deductibles.

*  Long-term-care insurance. Only 14 percent of participants in the Bankers Life and Casualty survey knew that Medicare generally does not cover long-term care. Long-term-care insurance can help cover the cost of nursing homes, assisted-living facilities and in-home care. The insurance pays expenses for those who need assistance with daily activities such as eating, dressing and bathing, or who have a severe cognitive impairment such as Alzheimer's disease.

*  Your company pension. Have you considered whether to take a lump-sum distribution instead of guaranteed monthly payments? Could you manage the money if you took a lump sum?

Even some people with strong financial backgrounds aren't prepared enough for their own retirement.

If anyone should have mastered the science of retirement, it would have been Stan Hinden, who spent the last 12 years of his 45-year journalism career as a financial columnist for the Washington Post. Yet Hinden, now 86, admits that he was not prepared with the breadth of knowledge he needed to handle his affairs in retirement.

But, oh, what experience can teach you.

After 17 years in retirement, Hinden is well-versed in many issues and shares his wisdom in How to Retire Happy: The 12 Most Important Decisions You Must Make Before You Retire (McGraw-Hill, $20).

Be sure to get the updated fourth edition, which contains the most recent information about Medicare. The chapter on health insurance covers the new deductibles for Medicare Part A (pays for hospital stays) and the new deductible and new premiums for Medicare Part B (pays for medical tests, doctor and preventive services). It also gives details on the new monthly premiums for Part D (prescription drugs). The new edition also explains some of the salient facts about the new health-care law.

Also new to the book are the health issues affecting his wife of 59 years, Sara. She suffers from Alzheimer's and lives in a small group home for dementia patients.

"Signs of Sara's illness first appeared in 2007, when she was 78," he writes. "Needless to say, Sara's condition dramatically changed both her retirement and mine. Until then, we had been poster children for a happy, upbeat retirement. . . . My experience with Alzheimer's disease has given me a new perspective on how one prepares for serious illness during retirement."

One way to prepare is to consider getting long-term-care insurance. Sara's policy, which she took out at age 62, is helping defray the cost of her care, which runs about $4,000 a month. The insurance pays $130 a day, or $3,900 a month. But her maximum total benefit is $260,000, which equates to 5 1/2 years. The chapter on long-term care is scary and depressing. Yet it is a must-read.

Hinden invites you into the retirement life that he and his wife have experienced. Their personal journey is what makes this book so readable and relatable. He nicely weaves their financial decisions and dilemmas around the most important information you'll need to go over before and during your retirement.

I asked Hinden what one piece of advice he would give someone close to retiring (within five years).

Start working on your retirement budget now, he said.

"Pay close attention to your likely health expenses," he added. "Prepare to go on Medicare at 65, if you are not already there. See if you can upgrade your secondary health insurance, or arrange to buy it. Study your prescription-drug expenses and see if you can minimize those expenses."

Hinden doesn't come off as an expert wagging his finger at you. He's become smarter and wants to help show you how to retire happier and better informed.