One of my very close buddies is contemplating retirement sometime soon. The image above is how most of us might like to picture life without working.
However, from my own experience, I know that going through this process can be intimidating, if not at least vague, ambiguous, tentative or even daunting.
If you’ve worked at a job all your life, and you’re looking at living without that income, it is not a pleasant contemplation. Large corporations, and even lesser companies, have drastically cut “retirement plans” from their benefits, and have instead encouraged individuals to participate in their employer’s 401k plan or to start their own IRA.
But even though the number of 401k’s and IRA’s has mushroomed, many who now face retirement are looking at least at a significant life style adjustment if not a whole new paradigm for living. This appears to be true even for many of those who have planned to some degree for the “golden years”.
The idea of completely maintaining one’s standard of living in retirement looks now to be completely ludicrous, except for the very wealthy. Virtually all of us must look at ways “to cut back” or “to adjust our lifestyle” as we approach withdrawal from the workforce.
My same bud also tipped me to a most interesting article in USA Today this past Tuesday that notes, among other disturbing trends, the alarmingly increasing debt load being accumulated by seniors. Click here to read the full story or to print it out if you want.
The story points out that it’s those 75 and older that are accumulating debt-weightiness the fastest. Their indebtedness has risen 160% from 1992 to 2004. Even for households of 55 and older, overall debt is growing faster than the rate of the overall population. That sounds like a dead end to me.
A high debt load when approaching retirement is a phenomenon of recent years, the article says. Baby Boomer debt, for instance, is much higher than that of their parents at the same age. Those “golden years” of retirement might well look a bit tarnished.
Those who have owned homes during their working years now have a fortuitous advantage. Many studies of 30 years ago indicated that there was little material difference, over a lifetime, between owning and renting. What few foresaw, back then, was the real estate explosion of the last 15 years in much of the country.
There’s little justice in what has evolved. I know people who’ve sold their paid for, price-inflated California homes and bought new, larger homes in areas in Oregon, Idaho and Washington for CASH and still had enough passive income from the remainder to live comfortably.
Contrast that with the person who’s worked dedicatedly all his life for wages and then finds out the retirement hopes he or she had are dashed, and Social Security is the meager staple. According to USA Today, many are having to work into their 70’s and 80’s before they can even think of retirement.
And God forbid you have a serious health problem as a senior. The increased cost of insuring one’s health is alone keeping many working into their golden years.
Are there answers? Unfortunately, each individual now must look at the available options for them. As Robert Kiyosaki points out in his popular book Rich Dad, Poor Dad, it’s assets, not a job, that will generate a sustainable income. And that’s true whether or not you’re retired.
Kiyosaki’s latest book Cash Flow Quadrant is a quick-read blueprint to a relatively rapid path to financial freedom. It’s not complicated, and his observations are not speculation; they’re proven.
My own problem often can be procrastination. But for us seniors, the time to procrastinate is rapidly evaporating.
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