Tag Archives: Savings

AARP Says More Work And Less Retirement Is Good News

Remember when AARP was an organization for retired persons? Remember when the American Dream included a decent job, a house and yard, and retirement?

The acronym AARP was shorthand for “American Association of Retired Persons.” But the organization decided to change its brand. The spelled-out moniker was dropped in favor of just plain AARP.

The capital letters AARP became the full, official name. The letters don’t stand for anything. I’m beginning to wonder what AARP, the organization, stands for.

Did the organization that advocated for retired persons change its identity — and its mission — along with its brand? Has AARP decided that retirement is no longer cool? It almost seems as if they’ve  decided to support WORK and give up on RETIREMENT.

The cover story for the September issue of AARP Bulletin proclaims:

“Good News for Older Workers: Keep, Change or Improve Your Job After 50.”

The “RP” in AARP now stands for “Real Possibilities.” I’m not making this up.

“Tens of millions of older Americans are working today at ages when their parents and grandparents had retired.

Nearly a quarter-century ago, in 1991, only about 1 worker in 10 planned to stay in the workforce beyond age 65. Today, that number has risen to almost 4 in 10.

In 1991, according to the Bureau of Labor Statistics, some 30 percent of Americans age 55 or older were working. By 2013, the workforce participation rate for those 55-plus had passed 40 percent, and it’s rising steadily. The federal Equal Employment Opportunity Commission says the current era marks the first time in U.S. history when four generations — pre-boomers, boomers, Generation X and millennials — are engaged in the workforce at the same time.”

The above quote is from the article, “The Value of Older Workers: Experience makes them better problem solvers and more reliable,” by R.R. Reid in the September 2015 issue of AARP Bulletin. The September issue is not yet up on the website, but AARP Bulletin Today includes many related articles.

The hard copy of the September issue cites excellent sources for the claim that millions of older Americans who would have been enjoying their hard-earned retirement in the late 20th Century remain hard at work in the brave, new 21st Century. So it must be true. People of my baby boomer cohort are less likely to be retired — and more likely to still be working — than were our parents and grandparents, who were probably retired at our age.

300px-SocialSecurityposter2I’m constantly reading or hearing about the difficulties of retirement. Many people say they can’t afford to retire; some say they expect to work until they die. They believe they have little choice. For many, the cost of living outstrips retirement income based on Social Security, pensions, and savings. See the results of AARP’s latest survey of workers aged 55-64.

Retirement income is usually fixed income. The amount of our monthly income from Social Security, pensions, and savings is not likely to go up. Monthly income is more likely to go down, as a retiree burns through savings. Even the annual Social Security cost-of-living adjustment (COLA) is not guaranteed. See the earlier blog post.

Many people fear that their Social Security benefit will, in the not-too-distant future, be reduced to 75 percent of the present benefit. That fear is based on a drumbeat of negative news. (I personally believe that we can and will find a way to preserve full Social Security benefits, and also ensure that Social Security remains viable for our children and grandchildren. Call me an optimist.)

AARP views the trend to less retirement and more work through rose-colored glasses. But I’m wondering if the American Dream of retirement for nearly everyone has ended. Workers in the 1930s to 1970s era were likely to have pensions and to own houses with paid-up mortgages. But since about the mid-1970s, the trend has been away from guaranteed pensions. In the later decades of the last century, many workers began to rely on home equity loans. People refinanced their homes repeatedly, and never paid off the mortgage.

Only in recent years have many baby boomers started to wake up and smell the burned coffee. The new reality is retirement without adequate pensions and savings. And meanwhile, you’re still paying the monthly mortgage. Is the American Dream of retirement about to become a nightmare?

I can hardly wait to see how Robert De Niro plays a 70-year-old intern working for a much younger boss (Anne Hathaway). Watch the trailer. Is it a comedy or a horror movie?

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Retirement Warning: Cable TV News Is Hazardous To Your Mental Health

The financial news on CNBC today is frightening for retirees and those nearing retirement, as it has been for the past week. If you switch over to CNN, the news is depressing. That’s really all you need to know. Don’t watch Cable TV news unless you feel strong. Cable TV news can only bring you down.

The financial news and the stock markets can be particularly toxic for senior citizens and people on fixed incomes. People nearing retirement often have significant investments in the equities markets, which can be volatile. Few people, if any, know when it’s time to get in or get out. People with too much invested in stock markets can lose a lot of their retirement nest egg in a few days.

People who are already retired are all too aware of the fact that retirement incomes are often fixed. That is, you’re not going to get raises year after year, except cost-of-living increases in Social Security, and COLA increases don’t even necessarily keep up with inflation.

On other cable news channels, talking heads often repeat the most violent story of the day, all day long, with constant replays of the same appalling film clip. Or in the absence of violence, they’ll chew over the insignificant political development of the day, or the most inane comment by a presidential candidate. The frequency of mass shootings, or any kind of shootings, is particularly saddening.

If you want today’s basic bad news, without the gory details, you can read the following indented paragraphs. If not, skip to the closing paragraphs that aren’t indented.

Bad news today, Wednesday: In the middle of the trading day, world stock markets continue to be chaotic. China, India, and Russia have another losing day. The Shanghai Index ended down 1.3 percent for the day. Generally speaking, stocks in Asia and Europe were down Wednesday. Developing economies seem to face a great deal of uncertainty. That’s practically today’s ONLY story on CNBC.

Meanwhile, the killing of a news reporter and photographer dominates the news on the other cable TV channels. That shocking tragedy took place live, on the air, early Wednesday morning. The two journalists were working for a Roanoke, VA, television station, filming a  story on location. The alleged killer is a former employee of the same TV station. The shooter was cornered by police several hours later on a Virginia highway and took his own life. New details of the story were reported all day. It was practically today’s ONLY story on CNN.

The financial losses in China, especially, are shaking markets all over the world, including the developed Western Countries, where economies are said to be relatively strong and continuing to grow out of the 2008 recession. Billions in value have been lost in the past week, especially in China. But even in the West, the economic picture is uneven. Greece and Puerto Rico are in deep debt.

In the past two days, markets in the U.S. and Europe have been trying to rally. But the rally failed in New York in the last hour yesterday. U.S. stocks had a good morning today, faltered in early afternoon, staged a rally in mid-afternoon.  Market experts are saying: DON’T PANIC. Sounds like good advice to moi.

Now it’s 2 p.m. Wednesday, which is like the witching hour. (Something about margin calls.) U.S. markets are now up for the day. People holding their breath from now to the closing bell. The takeaway, don’t watch the hour-to-hour stock fluctuations. Do as I say, not as I do 🙂 If you must, you can see the latest numbers from CNBC here.

On CNBC, analysts are naming stocks they say are down so far that they’ve become bargains. I’m not paying any attention to that. But then, I don’t have any money in the stock market, and I don’t have any to invest. Meanwhile, some experts are speculating that the market might be turning into a bear market. This stuff can drive you crazzzy!

I usually avoid giving advice, especially specific advice. I’m not qualified to give advice on most subjects. And even if one is qualified, unless someone asks for advice, I avoid volunteering it. Unsolicited advice is usually unwelcome.

The exception is advice from your health care professionals They need to give you advice, even if you don’t want to hear it. It’s for your own good; sometimes it can even be a matter of life or death. Listen to advice from your health care professional. Of course, when there are decisions to be made about treatment, the patient has the right to make the decision. Usually, the patient is wise to consult with health care professionals and family and friends. If you like, get a second opinion from another doctor.

Another exception is weather news. Often, knowing the weather news can help you stay safe.

Regarding news, I’m a retired newsman, so I claim a degree of expertise. Having been close to breaking news all my life, I hope I’ve built up some resistance to bad news. I also know when to shrug off news as irrelevant or silly or simply incorrect. I understand the effect that too much bad news can have on people. Older people have a tendency to watch too much television news, and are more susceptible to depression from the news, at least sometimes, than younger folks.

Scary Times In The World’s Stock Markets, Expensive Housing In My Own Back Yard

Dollars and cents have been on my mind ever since I retired in 2013. I had known for a long time approximately how much my income would be after I stopped working. I naively thought it would be comfortable enough. I knew that I would bring almost no personal savings into retirement, for reasons I might or might not go into in another post.

Actual retirement focused my mind on my financial situation, and I got the housing equivalent of sticker shock. I discovered that — in 2015 dollars — my retirement income didn’t stretch as far as I thought it would a few years back. The cost of living in general has gone up, but the cost of renting or buying a home in the county where I grew up had gone through the roof. (I call housing, “Shelter From The Storm.”)

As a result, I’ve been preoccupied for the past year with searching for the right place to set down retirement roots for the long run. It has to be affordable over the next ten or twenty years, at least.

I’ve done a lot of research. Back when I was sixty, I started a blog intending to focus on living a simple and frugal lifestyle. It became a general-purpose blog, but I did write a number of posts, early on, about the differing costs of living in a number of geographic locations, such as North Dakota and Maine. (What made me think I’d ever want to live in such cold places?)  I’ll have to provide links to some of those earlier posts, but not tonight.

Tonight, the news is focused on a stock market meltdown in China, and reactions in stock markets  around the world. You might think China’s general economy is in a shambles, but that must be hyperbole. Despite problems, China’s economy is reportedly still growing. But growing how much? How’s that for burying the lead? What I’m saying is that you’ll read more about the difficulty of finding affordable Shelter From The Storm in future posts. A lot more! Establishing a permanent retirement home is Job One, for me.

But tonight, all eyes are focused on financial news. Makes me realize how fortunate I am, not having any money invested in the stock market. Also reminds me how important money and frugal living are for retired people like me. I file everything about money under Dollars And Cents.

I was glued to CNN for a couple of hours tonight, and I imagine many other retired folks were too.  The news is perhaps most riveting for those who plan to retire in a few years. If you’d like some analysis, try Stock Market Bears Are Growling.

A lot of folks postponed retirement during and after the recession of 2008. One would hope we all learned a lesson from that one. However, the U.S. stock market returned to apparent health, and I suspect many people plunged right back in. Some have been trying to recoup losses from the recession. Many others awaken, late in their careers, to how little they’ve saved, and hope to make up for lost time.

Breaking news: this just in! The Shanghai market was reported declining late Tuesday morning, China time. But other Asian markets were trying to rally. In the U.S., investors must be nervous as hell waiting for New York markets to open Tuesday morning.

Background: Last week saw a general selloff in world stock markets. In the U.S., the S&P 500 was off 3.2 percent on Friday alone. The Dow-Jones Index fell 1,000 points, or 5.8 percent, for the week. The Dow opened the new week with a 600-point loss on Monday.

You want to know what financial advice they’re talking about on CNN? I can summarize it in two words: DON’T PANIC!  Thank goodness I’m not writing one of those retirement blogs that try to sell you on investing all your money in stocks, or bonds, or gold. Hog bellies, anyone?

If we’re not about investments, what are we about? “Retirement Made Simple” is now into its third week, a good time to remind readers, and myself especially, what it’s all about. I outlined the general scope of the new blog in this third-day post: Housing And Money And Cars, Oh My

Retirement Investment Advice: NOT!

Have you Googled “retirement?” You’ll find no shortage of information. I got 236 million hits. Nine of the first ten retirement hits were about retirement investment and savings. For example: Fidelity Retirement Planning. Here’s another one: New York Times Retirement Planning, information on IRAs, 401Ks, annuities, and such. One more: The Harvard Business Review, on the “Crisis In Retirement Planning.” Here’s an excerpt from the Harvard Business Review:

“The result was an acceleration of America’s shift away from defined-benefit (DB) pensions toward defined-contribution (DC) retirement plans, which transfer the investment risk from the company to the employee. Once an add-on to traditional retirement planning, DC plans—epitomized by the ubiquitous 401(k)—have now become the main vehicles for private retirement saving.

“But although the move to defined-contribution plans arguably reduces the liabilities of business, it has, if anything, increased the likelihood of a major crisis down the line as the baby boomers retire. To begin with, putting relatively complex investment decisions in the hands of individuals with little or no financial expertise is problematic.”

Such information is aimed at a target market of the wealthy and the affluent, high-income earners with surplus discretionary income. I imagine they’re a lucrative market for the investment industry.

That’s not me. It’s not most American workers. The high-flying investment advice is for the top one percent, maybe the top ten percent or twenty percent. This blog is for the rest of us.

Forgive and forget the past

For myriad reasons, we haven’t saved much over the course of a working lifetime. Or we haven’t been able to save anything at all. Why not? Children to raise on an insufficient income. Baby needed new shoes. The family needed food on the table, TODAY, not next week. Unemployment. Babies to be born. Illnesses. College tuition. The list goes on, but there’s no sense in rehashing the past.

The investment gurus might point the finger and say it’s our own fault. Mea culpa.

Time to let go of the should-haves, could-haves, might haves. Let the past rest. Retirees and future retirees reading this blog need to move on. Forget the past. This blog, “Retirement Made Simple,” is concerned with today, tomorrow, the rest of our lives. It’s about retirement done my way.

If you’d like to vent, you might as well get it over with now. The comments section below is available for free. It’s cheaper than a therapist. Go ahead and scream that primal scream, write down your feelings and get them off your chest.

Next, in a day or three, we’ll zero in on some of the common concerns we’re all facing now, or will face in the not-so-distant future.