One of the things that concerns me as I baby boom my way to 60 and at some point retirement and that is the question if I can ever actually be able to retire. I know that I am better off than many and not as well off as some. I have written about the retirement of the very concept of retirement http://thissideoffifty.blogspot.com/2009/01/january-2006-retirement-of-pensions.html.
This very idea was covered in a recent article in the Huffington Post, Retirement Crisis: Baby Boomers Near 65 With Retirements In Jeopardy. The article is a bit of a scary read not only for our generation but the generations behind us that may end up with the debt of bolstering both social security and medicare to support us. But the article should be read. According to the article, we are retiring at the rate of 10,000 per day. This will last over the next 19 years. Also, according to the article, we are retiring too early and without sufficient savings. The article re-hashes the litany of reasons for this from the disappearance of pensions, the economic downturn that wreaked havoc with the nest eggs of home value and 401Ks, the strained social security system, and healthcare. Looking at the glass as half-full, it is not a pretty picture.
This is not what we signed up for when we came of age in the 1960s and 1970s. We lived in a country where you put your time in and do your job and you sail off into the sunset enjoying your fully funded, often by your employer, retirement. The companies we planned on working for would reward us for our 30 years by supporting us for another potentially thirty years. Cool. Let’s do it.
Now, at the brink of retirement, I believe that what we were sold on and bought into in 1970-something is simply not all there for the large majority of us.
That ideal plan presupposed a constantly strong and growing economy with a labor force that was also growing and expanding. It presupposed a wealth of good middle class factory jobs. It was a plan that was built around the model of Detroit: The Motor City. You work salary or hourly for a big company or supplier to a big company and everyone was happy. Somewhere along the way, global competition came in and forced productivity and our companies that were essentially monopolies after WWII. Things have changed quite a bit.
Most of us did not change enough with the times. Sure, the wealthiest of us are OK. But I am guessing the vast majority of us are standing here looking forward and not knowing when and if we can truly retire. Even if we don the blue vest, we might not be able to truly have enough money to survive. This will all be magnified tenfold by any serious health issues.
There is another dichotomy here for me as well. In the spirit of this blog, we had other noble ideals when we were coming of age. At least, I did. I thought we would be doing something different than our parents and grandparents. I thought we would have gone boldly forth and created wonderful alternative livelihoods and lived some kind of utopian hippie summer of love laid back perfect dream. I know only one friend that actually became a farmer and he is still farmering today.
To a degree, I bought into the dream. But upon earning a degree, I realized we could not all of us live off opening and running tie-dye t-shirt stores, head shops, quaint music and book stores, and communal farms. The economies of scale were against us. We compromised. We sold out. We rationalized it... I am still not sure how that happened which is one of the reasons I started this blog.
The cold hard fact is that we graduated either from high school or college and then had to do something. Despite all the best laid aspirations, most of us found ourselves working for corporations. We got married, had 1.7 children, and an economic reality set in. Next thing you know and we are buying into the Reagan era boom and saving for our children’s college, weddings, and our own retirements. Life was looking pretty rosy for most of us back in those days.
For many of us, though, there was no substantive saving. Most of us were just getting by and making ends meet. As employers gradually stopped providing the kinds of funded pensions that were largely in place when we entered the workforce, the burden fell on us to save. For this to work, however, we had to have enough money to contribute to our 401k plans, the foresight to contribute to these plans, and the stock market had to play along by steadily growing. For many of us, the first two simply did not happen. For all of us, especially over the past few years, the stock market simply did not do what many of us were counting on it to do. The timing of the Great Recession has been horrible for many of us planning for a retirement like our parents have or had.
What do you think about this? Am I right? Or just full of it? What are your plans? Are you set? Or do you wish you had planned better. If so motivated, comment on this piece. Better yet, write your own story.
This very idea was covered in a recent article in the Huffington Post, Retirement Crisis: Baby Boomers Near 65 With Retirements In Jeopardy. The article is a bit of a scary read not only for our generation but the generations behind us that may end up with the debt of bolstering both social security and medicare to support us. But the article should be read. According to the article, we are retiring at the rate of 10,000 per day. This will last over the next 19 years. Also, according to the article, we are retiring too early and without sufficient savings. The article re-hashes the litany of reasons for this from the disappearance of pensions, the economic downturn that wreaked havoc with the nest eggs of home value and 401Ks, the strained social security system, and healthcare. Looking at the glass as half-full, it is not a pretty picture.
This is not what we signed up for when we came of age in the 1960s and 1970s. We lived in a country where you put your time in and do your job and you sail off into the sunset enjoying your fully funded, often by your employer, retirement. The companies we planned on working for would reward us for our 30 years by supporting us for another potentially thirty years. Cool. Let’s do it.
Now, at the brink of retirement, I believe that what we were sold on and bought into in 1970-something is simply not all there for the large majority of us.
That ideal plan presupposed a constantly strong and growing economy with a labor force that was also growing and expanding. It presupposed a wealth of good middle class factory jobs. It was a plan that was built around the model of Detroit: The Motor City. You work salary or hourly for a big company or supplier to a big company and everyone was happy. Somewhere along the way, global competition came in and forced productivity and our companies that were essentially monopolies after WWII. Things have changed quite a bit.
Most of us did not change enough with the times. Sure, the wealthiest of us are OK. But I am guessing the vast majority of us are standing here looking forward and not knowing when and if we can truly retire. Even if we don the blue vest, we might not be able to truly have enough money to survive. This will all be magnified tenfold by any serious health issues.
There is another dichotomy here for me as well. In the spirit of this blog, we had other noble ideals when we were coming of age. At least, I did. I thought we would be doing something different than our parents and grandparents. I thought we would have gone boldly forth and created wonderful alternative livelihoods and lived some kind of utopian hippie summer of love laid back perfect dream. I know only one friend that actually became a farmer and he is still farmering today.
To a degree, I bought into the dream. But upon earning a degree, I realized we could not all of us live off opening and running tie-dye t-shirt stores, head shops, quaint music and book stores, and communal farms. The economies of scale were against us. We compromised. We sold out. We rationalized it... I am still not sure how that happened which is one of the reasons I started this blog.
The cold hard fact is that we graduated either from high school or college and then had to do something. Despite all the best laid aspirations, most of us found ourselves working for corporations. We got married, had 1.7 children, and an economic reality set in. Next thing you know and we are buying into the Reagan era boom and saving for our children’s college, weddings, and our own retirements. Life was looking pretty rosy for most of us back in those days.
For many of us, though, there was no substantive saving. Most of us were just getting by and making ends meet. As employers gradually stopped providing the kinds of funded pensions that were largely in place when we entered the workforce, the burden fell on us to save. For this to work, however, we had to have enough money to contribute to our 401k plans, the foresight to contribute to these plans, and the stock market had to play along by steadily growing. For many of us, the first two simply did not happen. For all of us, especially over the past few years, the stock market simply did not do what many of us were counting on it to do. The timing of the Great Recession has been horrible for many of us planning for a retirement like our parents have or had.
What do you think about this? Am I right? Or just full of it? What are your plans? Are you set? Or do you wish you had planned better. If so motivated, comment on this piece. Better yet, write your own story.
I know it is tough to make a living through writing, Mark, but in my opinion you write well.
ReplyDeleteI am a bit younger than you, and I am blessed to have already retired. I worked hard for GM for nearly 31 years, and earned a decent pension and benefits. I live together with one of my brothers; we are buying the home our family settled into when we moved out of Detroit. My brother is still working, but plans to retire next July.
Did my life work out as I planned? Well, I am still working out my salvation day by day. Family and friends are the important parts of my life, and I have been richly blessed.