3 ways to rethink old age and retirement, MIT expert says

The following is an excerpt from “This week, your wallet,” a weekly audio show on Twitter produced by CNBC’s Personal Finance team. Listen to the latest episode here.

 Americans are living longer — and it’s changing the nature of retirement planning.

The classic retirement framework aims for seniors to have enough money to fund their lifestyle in old age. While not incorrect, the framework is “incomplete,” Joseph Coughlin, director of the Massachusetts Institute of Technology AgeLab, told CNBC.

“Longevity planning” is a better way for society to think about old age — especially since the future is “much grayer than it’s ever been before,” he said.

There’s a roughly 50% chance that Americans who are 65 years old today will make it to 85 — a period that lasts about 8,000 days, or a third of their adult life, Coughlin said.  

Instead of a short period earmarked purely for leisure and travel, retirement in the future will be increasingly dynamic one, in which people might have different part-time gigs and find other ways to stay happy and engaged.

“Leisure is a story we wrote for retirement when it was short,” said Coughlin, author of “The Longevity Economy: Unlocking the World’s Fastest-Growing, Most Misunderstood Market.” “Life is the new story we need to write when it becomes so much longer.”

“This is an entirely new longevity frontier,” he added.

Within that framework, there are some big questions people planning for their retirement years should be asking — but which are often overlooked.

Here are three of them, according to Coughlin.

This question gets to what makes you smile — and how you’re going to get that thing.

Imagine it’s a hot summer night and you’re craving an ice cream cone. Ice cream, in this case, is what makes you happy. But do you have the transportation to get to the store, without asking a neighbor or adult child, for example?

In other words, can you get the ice cream when you want it?

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Seventy percent Americans over age 50 live in suburban and rural areas, where public transit may be spotty or inexistent, Coughlin said.

The answer has financial implications, too: Transportation is the second-largest cost in retirement for Americans over age 65 , Coughlin said. (The first is housing, and health care is third.)

Seniors may need to pay for transit not just to do things they enjoy, but also to travel to the doctor and the grocery store, for example.

Yes, your bank account and financial portfolio are important in retirement — but so is your “social portfolio,” Coughlin said.

Ensuring we have enough friends, who we can socialize and have lunch with, who we can learn from, have fun with and lean on when life “goes to heck,” is an important part of longevity planning, he said.

This is something in which retirees should plan to continually invest in old age, Coughlin said. As one woman in her 80s told Coughlin, there’s a certain “attrition” to your friendships as you age.

The lightbulb represents all the things — big and small — we might take for granted in retirement.

Take maintaining a home, for example. There may be a time when climbing a ladder to change a lightbulb seems hazardous or impossible, Coughlin said.

Home maintenance is among the “hidden costs” of retirement, he added. (Transportation is another, he said.)

“There will be a whole cost in retirement to outsource all that help you may need to stay independent and well,” Coughlin said.