It Won't Get Easier

Both the WSJ and Reuters has articles yesterday telling why baby boomers are in trouble financially and 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 profecy 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 on an anecdotal basis is that more and 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 are go to have to come to terms with is that nothing related to retirement is going to start getting easier. Anyone who is now 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 one way or another. This might mean paying it, defaulting on it or something else but whatever the case the excessive spending will then (hopefully) have to end.

Navigating stock market cycles for people with investment portfolios is not going to get any easier. One of the pillars of this site has been that the same old same old that worked in the 80s and 90s stopped working a long time ago and I would add is not likely to come back.

People certainly might have more trepidation about investing in equity markets but that is where the growth is even if we are 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 then 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 just 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 it is or is not in. I've said many times I expect to get nothing.

As I have said many times 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 highschool on Facebook about looking forward to retirement.

On a philosophical level I view this as wishing your life away as opposed to focusing on the journey. Also 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. I've mentioned my father here every so often. He is 85 and does a bunch of little things that keep him hopping including "helping" people near where he lives with little business ideas they have going. The reason I put helping in quotes is that this is how he has referred to it for the last I don't know how many years but it turns out he gets paid for these gigs, which I did not know until his last visit here a few months ago.

The example of my father checks off all the boxes as does the example of my neighbor with the backhoe whom I've mentioned dozens of times. This is work they each enjoying doing regardless of the pay. Thinking of it in terms of pre-retirement income is the wrong context; the income derived is a part of their individual solutions.

This is a tie 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 (many commenters have mentioned things like being the Walmart greeter) which is not what I have in mind with these posts.

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.

The picture is of what turned out to be not a serious collision in a practice lap at the recent Indycar race in Baltimore. You can click here for the video but essentially Tony Kanaan's car got airborne and his left wheels got very close to Helio Castroneves' head.