Finances and Aging

I'm always fascinated to read articles wherein political figures make statements that are obvious. I find myself wondering if a) it's not at all obvious, but it is to me because I'm so astute (I like that one), or b) it's obvious, and they just realized it, or c) they have no idea if it's obvious or not -- it was just on the index card that a staffer gave them to read into the microphone, so they read it.

In this case, I was reading an article on the CNN site about aging and the workforce. The article noted that people are starting to bail out of the workforce before the normal retirement age, and cited the growth of private pensions, as well as Social Security and Medicare benefits. It goes on to make the point that reliance on those sources of income may be misplaced, and that, therefore, retirees may have to rely entirely on their own resources. One person says that even a million dollars may not be enough if you're planning on living another 20 or 30 years. Although that's an amazing concept, I think it's exactly right. If you expect to live another 15 years after retirement (the current life expectancy is 75 for men, 80 for women), and you require $60,000 a year to maintain an acceptable lifestyle, that's $900,000 right there. When you add to that $60,000 a year the need to fund expenses which were met before then by your employee, you might be adding an additional $10,000 a year - which bumps you over the million dollar number. (This assumes no growth of assets, which is of course not a realistic assumption, but rather a worse-case one without catastrophic loss. Catastrophe will cost you more.) So the idea of 'a million is just barely enough', though amazing, is realistic.

Pause while I think about tax cuts and presidential spending.

The phrase that got my attention, incidentally, was this one:

“If you leave the labor force thinking you have plenty, and then realize that you don't, then you are stuck."

Um...yeah, thats a good assumption. Not a lot of 75 year olds getting hired these days. But perhaps that should change. Will have to change. Perhaps we should be looking into retooling the econony so that seniors can continue to work if they need (or, god help me, want) to -- and do it without bagging or working as a floor sweeper at Burger King. And perhaps some thought should be going into why people bail as soon as they can -- why they find what they do so unappetizing that they would rather leave -- even with this financial question -- than hang around one more year than they have to.

It's a vital question.