Finance and Economics > Investing and Saving

“I’m going to work until I die”

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--- Quote from: bigbear on October 12, 2017, 02:27:44 PM ---A little perspective is in order:  Until recently (like within the last 100-150 years), retirement was only for the very wealthy.  After Social Security and pension plans and all the other currency manipulation and industrial revolution...  It was built on ever increasing productivity, consumption, tax structures, and slight lever adjustments to shift some of it down the road.  Prior to that, most people worked in some way or other until they physically/mentally couldn't.  And they didn't have $X,000,000 to pay for medical costs to prolong life.  So they essentially worked until they died.  "Retirement" is a First World phenomena that may or may not be sustainable as a goal for the majority of people.  That doesn't mean to not plan for it.  That doesn't mean not be responsible. 

Economists haven't seen the wage growth they have been hoping for after the ongoing currency manipulation (low interest, helicopter money, QE).  They seem to think it's still coming.  But with developing nations putting pressure on domestic wages, it's easy to see the headwinds for "retirement" as we know it and as most people expect/hope for.

--- End quote ---

Very true.  Add to that that when Social Security was started in the 30s, the average workers only  lived a couple of years past "retirement age."  Now people can live 20-30 years after retiring.  A LOT can happen in 30 years to upset financial situation: need to hire more help as your mobility decreases, vastly greater medical expenses, constant barrage of scams to suck away savings, vehicles wear out, etc.  Plus, there is an expectation that you will be going on cruises and travel around.  Not to mention the societal and broader economic changes (bubbles, taxes, inflation). I think few people have a realistic idea and plan for the risks to be faced over 20-30 years of retirement.  I've seen a very few people enjoy the picture book retirement, very few.  I've seen many die long before retirement age, or acquire major disabilities prior or soon after retirement, savings wiped out, scams rip them off of everything, unbelievable medical expenses even with cadillac plans.

David in MN:
It's a little murky. My grandparents never retired, technically. When gramps dropped the day job they legally became farmers full time. Contract the land and work futures markets to balance risk. I guess for about 4 generations in my family there was no retirement as they just went back to the farm.

But then, the farm was a MASSIVE asset. My grandmother passed in a decrepit farmhouse with floors that weren't level, a roof that leaked, a heater that broke weekly, plumbing that was essentially a coin toss, and a failing foundation while sitting on $1 mil of land. Were it not for the garden, sunroom and her collection of cacti she'd have gone sooner. She loved that land.

So I don't know. We've only been industrialized a while. Even in the 30s the depression solution was to retreat to the farms. I think we're in a big experiment where we move away from the land as a primary resource. It's a good question. Would you swap your 401 for a few hundred acres of farmland? It damn near tore my family apart selling it.

That is a very common situation, David.  Around this area there a lot of family farms dating back to the late 1800s.  They were passed on from gen1 to gen2 and perhaps gen3 intact, and even expanded as offspring started their own farms. Many farmers my age are now selling off large tracts and keeping 50 acres to lease out.  Nothing really sustainable to pass on to their kids.  And nowadays it is common NOT to pass the farm to the eldest or the one who stuck around, but it gets sold and divided evenly. Nothing left of a farm legacy.  Not many of the "kids" want to farm anymore.  Can't rely on cheap illegal immigrant labor as much as before.

I spent time in Iowa in the 1970s where this all happened decades ago and every family tract of 500 or so acres got bought up by the industrial Ag businesses.  You end up with fewer and fewer family farms and more vast horizon-to-horizon industrial farms.  Then they have such an advantage of economy of scale that the family farms struggle to compete in their own area.

Same old story: Big govt eventually leads to loss of family businesses and consolidation of resources into a few multi-national corps.  Big loves big and squashes small.  And most of the local family farms were all for government intervention: favorable tax rates for farms, national subsidies, land use restrictions, etc.  You don't get govt favors without the blowback which is the giants crushing the family farm.

Just as we see the family doctor dying off under the burden of national healthcare, we see family farms withering away under tax/zoning/seed licensing/subsidies.

My paternal grandparents had an incredible place on Hood Canal for their retirement (Seabeck).  My grandfather nought two wooded lots in the 1950s with cash, then logged one of them and traded the local mill for finished lumber.  He used that to build a small cabin while he built his retirement house, then sold the cabin and its lot.  It was one of the very few places within miles that had easy access to a pristine gravel beach, the lawn literally sloped down to the beach.  He died at 75 after long years of dementia and hip problems.  My grandmother lived in her house until she died at 100 yrs. He had a govt pension from the shipyard and social sec. But they never had mortgage payments, not a day of debt of any kind, and their 1957 BelAir lasted until neither could drive. Then the beach house was sold to be divided up between three surviving sons and the buyer leveled the house (which had beautiful stonework, fireplace, built-in cabinets and firewood box) and built a strange modern copper clad thing.  No trace of that legacy left.

I think being free of debt and keeping as small an expense footprint as possible helps a lot.  My grandparents also had a thriving garden and beehives that supplied much of their table produce, plus canning.  They could walk to the local marina/market for their mail and groceries.  The VA covered the worst of my grandfather's care (not ideal but better than not or facing crippling debt).

Smurf Hunter:
Hood Canal is nice.  I spent time in that area 3 different times last summer.  It's interesting how the real estate prices vary from opposite sides of the bridge.

If never had to go into an office in the city...

David in MN:

While the average 50-55 has $125,000 saved for retirement the median has only $8,000. That means half of those in the age group have UNDER $8k for retirement. It's the default position to believe everyone is just like you. I have more than $8k in Verizon stock right now.

Now I get the push for socialism. Half of Gen X have no plan for retirement. More than half. THE AVERAGE 50-55 HAS AN $8-9k CREDIT CARD BALANCE. They're in the red. And if they're paying the kids' college debt Bernie starts making sense. Not that I agree but I understand. Without a damn good pension you're basically homeless.

I can't believe it but I'm changing my tune. The economic disaster that will destroy America isn't the Fed and the funny money. It's a lack of savings. I just blanket assume that every 60 year old is a millionaire. Turns out they're penniless.

How did I manage such luck? I married a woman who, like me, automatically put 10% in a 401, 10% in IRAs, and let me have 5% to play with. I thought that was normal. This really is a disaster.


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