Tuesday, December 03, 2019

On Preparing For Retirement

I was speaking with a friend this weekend, commenting on the fact that I have rather rapidly come to the realization that I have a great opportunity to get my financial house in order and I did not want to mess it up. 

The response was "That is really great for you - sadly for generations following you, probably not possibly. Certainly for me."

The response struck me as odd.

My friend is with 15 years of me so (I guess technically) we are almost in the same age cohort.  Yet to her, it seems as if the concept of not doing a job for which you get paid for the rest of your life is something that cannot be achieved. 

Has the fissure really become this great?

My initial reaction (which I did not speak, of course) was that things may be different, but not necessarily harder.  But is it?  Is this the first American generation that will not think of retiring?  And if so, what changed so dramatically?

Student loans?  Yes, I think that is an element - but then again, that comes back to decisions.  No-one forces anyone to take out a student loan, and there are plenty of ways to make money without a formal degree?

Cost of living?  Possibly, but then again do have to live where you want to live?  For me, and millions like me, we follow the jobs and sacrifice where we might want to live for where we have to live.

Taxes, fees, licenses?  That is a third rail no-one willingly touches, but if I were in states with significant state taxes, I would definitely consider that to be an issue.

Or is just simply the question of spending - that retiring for most of use requires years of planning and sacrifice, something that many - most - are no longer willing to do?  We have become a society of instant gratification, where waiting is considered foolish at best and painful at worst.

One other thought: the painful reality is that we are now in a 24 hours global economy where the tolerance for error has become much less.  We have made some significant errors which cost us - but have had the time and money to recover.  In the new cycle, I suspect such things are now much more unforgiving. 

Perhaps it is all of these.

The better question - instead of all of us bemoaning the fact that less people can consider this, is how do we get more people there?  Sadly, if it comes with sacrifice and delayed gratification, I suspect most people will still say "No".


  1. There’s two sides to it.

    Up here there are young people effectively locked out of the property market. They can’t start families. They start their careers at $30 ~40k a rear. Your average house around here starts at around $300k. The average econobox cars start at $20k. The job market is in the toilet and what little jobs there are - are incredibly volatile. There has never been any job security in Alberta unless you worked for govt.

    My parents were life long snivel servants. Mom was clerical/admin, Pop dropped out of school in grade 10. They bought their first house when they were 23. They traded up the property ladder to a sprawling home with a three car garage. They retired at 55 with gold plated pensions, a huge RV, vacation property in the US and all that goes along with that.

    The kids look at that and they’re going Galt...and part of me doesn’t blame them one bit. They are paying through the nose to fund social programs that will collapse before they can take advantage of them, we are importing people from the third world and giving them our kids’ jobs because they’ll work cheaper, and if the kids complain, people like my parents laugh at them and call them names and tell them they’re spoiled.

    We are betraying our children... and they will eventually reciprocate.

  2. There definitely seems to be a change in how people perceive retirement and how to prepare for it. As a kid, I remember my grandparents explaining that the idea was to have one's home and debts paid off by retirement. Then one could be comfortable and worry-free on a modest pension. Few people seem to think that way anymore. As a tax write-off, a mortgage is considered desirable. I suppose it's the same for consumer debt. So, if one expects to spend the rest of their life in desirable debt, then there is no "not working." People pin their hopes on their investments, but there are no guarantees there. It just seems an odd way to live.

  3. Anonymous9:11 AM

    Sacrifice and delaying gratification.

    The sad fact is that most (all?) of the younger generations now are completely unwilling (unable?) to face this hard truth.

    And it wouldn't hurt if you are willing to work hard; up to and including working 7 days a week. I did and it didn't kill me...


  4. Glen - It is a pickle, for sure. Things are no different down here in the lower 48, especially in the urban areas: if I were in my twenties, I could never consider purchasing a home where we live now or even where I grew hope. I would have to go to the hinterlands to afford something or have a horrid commute.

    At the same time, the younger generation has to shoulder some responsibility: life has always been adjustment, and assuming you will come out of college with a $150,000 job is also foolishness. Most people that have financial success do it slowly. To believe you have a right to a lifestyle that your parents worked 30-40 years to achieve is arrogance at best.

    As to the social programs: Frankly, they vote. If there is such great concern on their side, they could vote to end them (to be clear, they seem to not to. Just want someone else besides themselves to pay).

  5. Leigh, the long term attractiveness of the mortgage as a tax write off has never made sense to me. My income is going down when I retire; why would I want to worry about having to make a house payment after that?

    My grandparents' experience were similar to what you express: modest, paid off lifestyles so that you could live without worry. That generally requires sacrifice - few of us magically get our money.

    People have lots of hopes on their investments - and at least through the 20th century as a whole, it has not been a terrible way to live (certainly beats the current bank interest rate) - so long, as you point out, you do not have consumer debt.

  6. Diane, delayed gratification and hard work is the only way most of us will reach that point. I think we have failed to demonstrate that this is the way to achieve success. Our young have come to believe that they are owed a living in many cases.

  7. With the younger generation, it's not just they don't understand delayed gratification. These are the people who if they don't like what you say, they need a place to be safe.

    They don't understand that life is not safe. And not handed to you.

  8. The InterWeb has changed a lot of thinking, Linda. We can have anything we want anytime we want it, almost immediately in some cases. And we can simply leave instead of dealing with people or situations.


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