Never Too Late To Plan For Retirement

by: Roger Nusbaum

Both the WSJ and Reuters has articles yesterday telling why baby boomers are in trouble financially. Even sadder was that the articles were about two different things (sort of). The WSJ wrote about boomers having too much debt and not being able to contribute to their savings at a time when they should have their highest income and savings rate. Reuters wrote about fear becoming a self-fulfilling prophecy and the extent to which fear is keeping boomers under-invested in stocks.

One thing captured in the WSJ article and something I can attest to is that more people nearing the traditional retirement age still have plenty of mortgage left to pay. A married couple who'd been here close to 20 years just had to move out over the weekend after getting foreclosed on, and while I don't know, it would seem they got in trouble with mortgage equity extractions.

One bit of reality that people have to come to terms with is that nothing related to retirement is going to start getting easier. Anyone who is facing some trouble as a consequence for living beyond their means (as a function of taking on too much consumer debt) is going to have to face that issue head-on. This might mean paying it, defaulting on it or something else, but whatever the case, the excessive spending will then (hopefully) have to end.

People certainly might have more trepidation about investing in equity markets, but that's where the growth is even if we're not talking about the US market. Avoiding equities is simply a matter of a tradeoff. If you can't live with the volatility that sometimes goes with owning stocks, you need to make up for it elsewhere (saving, spending less, working longer, or a combo of all three). The government is not going to make it any easier as the debate is on about how unhealthy social security and medicare are. Hopefully no one thinks all is perfectly fine with the programs, but there are divergent opinions about how much trouble they may be in. I've said many times I expect to get nothing.

This is a challenge for each of us to solve for ourselves; at least I believe the people who view it this way will have a much better chance of having financial success. One of the people quoted in the WSJ was "not quite 50" and had been hoping to retire by 55 but now feels he cannot. I've seen one or two comments from friends from high school on Facebook about looking forward to retirement.

I view this as wishing your life away as opposed to focusing on the journey. Part of my belief system is that some sort of work late into life provides a reason to get up, keeps people engaged, keeps them challenged mentally, keeps them at least a little active and might bring in a little income. This ties in to a point I've made many times about figuring out how to get paid for doing something you love and would otherwise do for free. Too many people confine their thinking of post-retirement work as being forced to do something they think is dreadful, which is not what I have in mind.

This sort of willingness to innovate will come easier to people who generally like problem solving and planning and will come all the easier to people who not only like problem solving but who also have a little self discipline with their spending and saving. Pity parties and lament is the wrong combination to bring to the table. This will take planning and a positive attitude.