Friday, October 27, 2006
PLANNING FOR RETIREMENT
Those of us in our 50s and early 60s inevitably must face the prospect of retirement. Even those of us who may not want to retire must face the fact that our bodies are not the flesh they used to be, and a time will come when there is no longer a choice. At some point retirement is inevitable unless we drop dead on the job.
In thinking about retirement, one has to consider the longer lives that the previous generation is enjoying. Recent deaths in my extended family have included an uncle who was 99. In my husband's family an aunt is just beginning to seriously slow down at 94. My own mother was 92 when she died. A person retiring at 65 must be prepared to cover the expenses for perhaps 30 years or more. That is a daunting prospect given the rate of inflation that is typical in America and considering healthcare costs. Friends of mine who are in their early retirement years have merely retired to a less demanding job. The notion our parents had that retirement was a time of play and relaxation, perferably in a retirement community setting, seems to be fading. One couple we know retired to such a place in the south, but after 10 or so years down there has moved back to Ohio to be close to family. So much for senior play-time.
When the discussion comes up in mixed company, there is usually one young person who thinks that seniors should have saved their money for retirement and have no one to blame but themselves if they don't have any. The generation approaching retirement now started working in the late 60s or early 70s, a time when America was a humming factory with good jobs to offer for all who were not fighting in Viet Nam. Those factories provided pension incentives to keep the plant rolling. Our fathers had worked at the same factory from high school or college graduation until they retired with pension and health benefits and a nice retirement party. We thought we'd do the same. Then came Reaganomics.
After a working career that has required not only the changing of jobs, but also the changing of career paths, sometimes more than once, coupled with the disappearance of pensions, and the evaporation of health insurance for retirement, my generation is now trying to figure out how to keep eating and buying medicine until the Good Lord calls us home. Pertty much we are doing it on the fly.
I had a conversation with my accountant recently, and given that he is nearing retirement age, the subject inevitably came up. What tips did he have to offer for managing this transition? He had nothing to offer. He found it as confusing and unpredictable as I do. He didn't know any better than I do how this is supposed to work out, and told me that it really wasn't possible to plan for retirement in the changing economic reality that we are faced with. His solution for handling the economics of retirement would appear to be skip retirement altogether, but maybe he just wasn't willing to divulge his strategy.
With thoughts like these in mind, I read an interesting article in our local paper this morning. The article, written by Ken Lahmers, Editor of the "Aurora Advocate," lists the prices he found in an old issue of the "Falls News" (another local paper) from 1964. I thought I'd list them here:
- Sirloin steak dinner at The Brown Derby Inn $1.85. Lunches for $.75.
- McMillen Tire front-end alignment $8.50. Tune-up $8.75.
- Firestone store alignment $5.55. Brake relining $13.88. Used tires $4.
- Goodyear Service Store tires $10 ea., 2/$19, 3/$27, 4/$32. Brake special $1.19.
- Econo Car Rental Chrysler products $3.99/12-hour-day, $4.99/24-hour-day.
- O'Connor Lumber mahogany paneling $3.99 per 4-by-8 ft. sheet.
- Young Brothers Builders new four-bedroom brick ranch $18,900.
- Conmart (used cars) 1962 Ford Falcon 4-door station wagon $1,589.
- Isaly's deli chipped chopped ham $.89 a pound. Baked ham $.59/half pound.
- Family Treat ice cream $.59/half gallon.
- Two six-count packs of Heath ice cream bars $.99.
- W. T. Grant, picture of your baby $.59.
- Thorpe Florist cut flowers $1.25/bunch.
- Lillian Rockefeller's Fancy Pastries decorated 8-inch cake $2.50.
- Goodyear store 19-inch portable TV $128. Westinghouse washer $198, dryer $178.
- J. C. Penney's department store two piece sectional plus chair $88.
- J. C. Penney's entire stock winter coats $16 - $44.
- Sonny Klein's Sport Shop men's suits and topcoats $12.22 each
- Edwards Shoe Store women's flats $2.
- Frazier's Atlantic Service gas station offered a free 8-inch cherry pie with every purchase of $3 or more of gasoline
- Goodyear store 19-inch rotary lawn mower for $29.99.
Firestone store ironing board $3.66. Remington electric portable adding machine $66.66
- Bettie's Fashions, a Kay McDowell walking suit for women for $24.98.
- La Dolle Hair Fashions haircuts $1. Perms $7.50.
Of course back then wages were a bit lower. In 1969 top salary for a graduate from Kent State University with a degree in Industrial Technology, a sought-after field at the time, was $840/month. My own starting salary as a legal secretary in 1965 was $175/month. Assuming that I had put away 10% a month for retirement back then, just how many days living would I have saved for at 2006 prices? How many people today save 10% per month before taxes for retirement? I think this illustrates the folly of suggestions that my generation should have saved for retirement. Assuming that the average working life of a person who enters the workforce at age 20 and retires at 65 is 45 years, and assuming a lifespan that continues to age 90, each working year must provide for approximately 6 months of retirement at an inflated cost of living. Pretty unrealistic.
Something has to change, obviously.
There was a time when retirees proudly posted the sticker on the backs of their campers, frequently seen going down the road, that read "I'm spending my children's inheritence." At the rate things are going, retirees of the future are going to be posting a small fender sticker on their three-wheel bicycles that reads "I'm spending my children's paycheck."
