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The most underutilized resource in the country for preparing people for retirement is retirees themselves.

It's useful to hear what financial planners and financial writers have to say. But it's worthwhile and, as you'll see, comforting to hear how actual retirees manage with money.

"By their own testimony, most long-term retirees have coped with managing their finances during the first decade and a half of retirement well," a recent report from the Society of Actuaries (SOA) says. "Some had to make cutbacks in their lifestyles: A number state they have gone from satisfying 'wants' to satisfying 'needs.' But those who have had to make that transition have accomplished it with resilience and not bitterness."

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See – retirement's not such alien terrain. It's a lot like your life while working and raising a family.

The SOA, based in Schaumburg, Ill., conducted 12 focus groups of people retired 15 years or more – seven in the United States and five in Canada (they were done in Edmonton and Kitchener, Ont.). Participants had investable assets of between $50,000 and $350,000, which is to say, they skewed to the middle class.

A never-ending debate in retirement planning is whether people are doing enough to prepare for life after work. The focus group results suggest that whatever preparations are being made, retirees are managing for the most part. Even when confronted with a variety of financial surprises, "very few shocks financially devastate the long-term retirees participating in the focus groups."

Still, participants in the focus groups reported a wide variety of extra expenses that had to be absorbed. Take note if you're a ways from retirement still. Think about having a safe, separate savings fund that helps you pay for these costs without having to deplete the money you rely on to generate month-to-month retirement income.

Most of the retirees said they remained in the home where they raised their family, and most said the biggest unanticipated expense they faced in retirement was related to home upkeep. Another unexpected cost was dental fees.

Still another surprise was the financial needs of adult children who experienced job loss, divorce or health issues. Boomers, prepare yourself for this expense when you retire. It's a challenge for today's young adults to land jobs that let them build careers, buy houses and raise kids. Financial help may be required.

Medical costs were not a major problem for the retirees in the focus groups. Some were surprised by the cost of prescription drugs, but they said they were able to manage. The same applied to inflation and taxes, which were also mentioned as unexpected expenses.

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Other expenses required major lifestyle changes or were never really covered by the retiree's financial resources, notably long-term care. It's clear this is an area that people must think more about as they plan for retirement. Long-term care insurance is available, but it can be expensive and may not cover all expenses. If you ranked insurance coverage by priority, you'd want life and critical illness insurance ahead of long-term care.

Still, you may at some point in your retirement have to pay the cost of moving into a nursing home or having someone come into your home to look after you. The SOA's summary of the focus group feedback quotes a Canadian woman saying her mother was paying between $1,200 and $1,500 monthly for home care and total costs of $5,700 for care and rent at an assisted-living home.

Other serious financial shocks were divorce and looking after adult children who were unable to care for themselves. Divorce was found to be more devastating than widowhood. "Divorced participants report losing half of their assets and often say they have to move out of their family home as a result of their divorce," the SAO summary says.

The overall view of retirement in the focus group results suggests middle-class retirees are doing just fine in paying their living costs and covering extra costs such as dental bills, house maintenance and gifts to their kids. Affording long-term care is the biggest uncertainty. If you want the best chance of being okay in retirement, spend some time on this question.

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Voices of retirement

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Here are some verbatim quotes gathered from focus groups organized for the Society of Actuaries to see how retirees are doing financially:

What's enjoyable about retirement

"There's a freedom. You can always say no to doing things, you know? You want to do something else, so you are not committed to having to do that. You have the freedom for that." male, Kitchener, Ont.

"Every day is Saturday. You can do what you want when you want kind of thing." male, Edmonton

Biggest financial concerns

"The cost of things. The rising cost of everything. Rent and everything is going up, up, up in Alberta. That's because of the oil, but now the oil is down but none of the other things are down with it. Rent doesn't go down. That's one of my main concerns." female, Edmonton

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Financial lifestyle since retirement

"We buy what we want, but if there is not enough money there I am going to watch what I got there." male, Kitchener, Ont.

The cost of home upkeep

"I had to put a new roof on my house and I had some other work done and that was a lot of money – $4,000 and that was a plain roof, just plain." female, Kitchener, Ont.

Source: Post-Retirement Experiences of Individuals Retired for 15 Years or More, Society of Actuaries

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