So, brace yourself: This isn’t going to be happy news for anyone looking to retire sooner rather than later. But you can always count on from me for one thing, and that’s straight shooting. I try to be sensitive and use kind words to soften the blow for people, but at the end of the day, I go straight to the bottom line. In other words, this is a “bad news, but I have some strategies to help” situation.
Let’s cut to the chase. The way our parents and grandparents retired is old school. Things are radically different these days. The Baby Boom generation (well, some of them, anyway) got the last “good deal” regarding retirement. Let’s examine why a rock-solid retirement is much more difficult these days.
Factors that make retirement difficult
Social Security. When Social Security was created, people’s life expectancy was strategically close to the designated “full retirement age” of 65. Social Security was not intended to provide twenty to thirty years of income to the masses. Yet our life expectancies have increased, and the government has been ridiculously slow to increase the full retirement age.
Health expenses. Past generations did not have the same access to health care we (theoretically) do today. Treatments and therapies have become much more sophisticated, and correspondingly more expensive. Layer on the crisis we have here in the States with our health care system, and you have a big steaming pile of … problems.
Pensions are dinosaurs. In other words, they are extinct. While there are a few holdouts, the majority of companies no longer provide pension-type retirement plans as a benefit for workers. Instead, they have changed their plans into defined-contribution plans, which most times require employees to draw significantly from their paycheck in order to build a retirement nest egg.
“Needs” look a whole lot different today. My grandparents didn’t have to worry about expensive communication technology and computers. Technology that requires regular upgrades to function well. Appliances lasted longer. In days gone by, there were far fewer things on which to blow a wad of money. Things that once were luxuries or wants are now considered needs.
Buy now, pay later. Modern mindsets are different from previous generations where there were no credit cards. Borrowing was either rare or unheard of. People saved up for big purchases, and as a result, they were deliberate about what and how much they purchased. These days, the mentality is reversed. Buying with plastic and then working to pay the debt off is a losing strategy over the long term.
I could go on and on about the hurdles we face today to achieve what we have been brainwashed to think is our ordained right – the right to retire in dignity, if not in style.
But all is not lost. It would be easy to throw up our hands and assume retirement is just not meant to be. And honestly, for some, that may be true. Circumstances such as illness, death in the family, divorce, and job loss have devastating effects that are not always redeemable.
Get a new game plan
Despite life’s unexpected curves, we can take steps to improve our chances of experiencing some “golden years.” Today we’ll focus on what I consider to be the number one thing people should do to shore up their plan for retirement. It’s probable you won’t like it. But bear with me. Here it is:
Plan to work longer.
Yikes, I know, it’s awful. But it is the truth. That whole life expectancy thing has totally changed most people’s framework and plans for what retirement should be. Retiring at 65 when you might live another five to ten years is one thing. Retiring at 65 with the possibility of having to support yourself for THIRTY years in retirement is quite another.
Before you go throw yourself off a cliff in despair, take heart. Retirement planning is my top area of expertise, and I am chock-full of strategies to help. I will turn this blog post into a series about retirement, so stay tuned and learn some concrete things you can do to make this life’s passage a joyful, rather than tragic outcome.
We can do this!
Comment below with your top retirement worries, and I will be sure they are covered in the series.