Retirement: A once-in-a-civilization opportunity?

[ziggy29]

Something I've been thinking about for a few months, actually -- made all the more front-and-center with the huge losses in so many retirement accounts.

A recurring theme in society and economics seems to be the unsustainability of so many post-WW2 economic blessings.

The immediate post-war era was an era of job security, top-notch benefits, affordable health care and first-rate defined benefit pensions. All of these helped lead to a less stressful existence with little need to keep an eye on Wall Street to keep your long, comfortable retirement dreams alive.

Obviously, all of these have been eroded in light of changing world economies and demographic shifts. And yet, looking back in history these concepts have never been so close to a "birthright" as they were, say, 50 years ago. And it's looking more like it never will be again.

Job security? Gone, at least in the private sector.

Health insurance? Getting chintzier and chintzier for employees and almost non-existent for retirees, especially those not yet retired or close to it.

Pensions? Anyone in the private sector under the age of about 40 can forget about those too, and many over 40 have already had their benefits "frozen" and replaced with their "savior," the 401K plan.

Social Security? I don't think too many people under the age of 50 is counting on much of that.

Taxes? The more debt we pile on, the worse each generation has it. And the less they get in return for their tax dollars.

The bottom line is that virtually every economic and demographic factor is conspiring to make the concept of "retiring" while healthy and able bodied seem to be more and more out of reach. Since the 1970s or so -- once foreign competition began cranking up -- once emerging markets began seriously developing (Japan) and other European war-ravaged nations had all their infrastructure back -- it just seems like on ALL these fronts each successive generation is destined to get a worse deal. And I wish I saw an end in sight to that, but I don't. Will history record there were three, maybe four, generations of Americans for whom retirement -- much less *early* retirement -- was an attainable middle-class concept?

In the end, I'm beginning to think this thing called "retirement" is little more than an historical aberration, created by an artificial boom in U.S. manufacturing and information sciences created by WW2. The aftermath of that war made the U.S. industrial infrastructure the only major economy not ravaged by war, leading to unsustainable prosperity.

I really hope I'm wrong and I do still expect to be able to retire -- and maybe even before my full SS eligibility at age 67 -- but as little as 3-4 years ago I was confident that I could be out by age 55. I have zero confidence in 55 and almost none in 60 today. There just seem to be way too many headwinds for younger generations to overcome -- at least in the private sector. And I suspect at some point, even the public sector's retirement security will fall victim to increasing public unrest over paying higher and higher taxes to protect someone else's retirement -- a retirement they no longer feel is possible for themselves.

And now, bring on the last hour of trading. -200 already so far, and the last hour has been very ugly lately.

[Marquette]

If I were a conspiracy guy, I'd be tempted to say that the 1970's started a push to destroy the middle class and consolidate power among the rich. I might be further tempted to look at recent events in light of that...

Good thing I'm not a conspiracy guy!

Very well-thought out post.

[dex]

I agree with your general concepts.
ER really is a post WWII idea. (Social security was just to help people out - keep them off the streets - in old age which was 62 then - they died earlier then)

The ability to ER really only applies to the first half 1947-55 of the baby boomers - in the USA and less in western Europe. The second half are not doing well financially.

[Notmuchlonger]

Work till 80 here I come!

[Walt34]

The view from here is that the U.S. economy since the early '70s has been built on borrowing and credit. That is not sustainable. I think the dumbest thing Nixon did was go off the gold standard. Borrowing works for the short term - for a real emergency, or a one-time purchase like a house that will eventually be paid off if you stay there long enough or even a car if you keep it longer than the loan term - but not as a matter of lifestyle, for either individuals or nations.

Who was it said "You cannot borrow your way to prosperity."?

For the U.S. economy, The Piper Will Be Paid. The Bailout may work at keeping the wolves from the door for another five or twenty years, but eventually the bill for the U.S. debt will come due and have to be paid. In full.

[statsman]

Originally Posted by ziggy29

I really hope I'm wrong and I do still expect to be able to retire -- and maybe even before my full SS eligibility at age 67 -- but as little as 3-4 years ago I was confident that I could be out by age 55. I have zero confidence in 55 and almost none in 60 today.

That's where I am at now. Back in the spring, retiring at 55 was definitely not going to be a problem (6 years from now). The problem with the downturn in the economy goes even beyond the value of our retirement investments, which now I estimate I need to work until at least 58.

I would like to stay employed with the company I am at for 3.5 more years, then my pension a little more than doubles per month starting at 55. I would also qualify for retiree medical coverage, which would pay for about 60% of our monthly premiums. Get laid off before that time due to a bad economy would likely mean I end up working until I'm 65.

[Lusitan]

Originally Posted by ziggy29

In the end, I'm beginning to think this thing called "retirement" is little more than an historical aberration, created by an artificial boom in U.S. manufacturing and information sciences created by WW2. The aftermath of that war made the U.S. industrial infrastructure the only major economy not ravaged by war, leading to unsustainable prosperity.

Pretty much sums it up. All the rest of the things people talk about are just details.

[lazygood4nothinbum]

early retirement is sooo over rated.

[unclemick]

Hmmm - the market wasn't so great when they canned/er layed me off at the tender age of 49 in Jan 93.

Pissed me off so much - I learned to ER.

heh heh heh - .

[cute fuzzy bunny]

I'll bet that taught the bastards!

[Behan]

So if less people are able to retire then I guess more of them will be a) working, b) unemployed or c) dead. Which do you think it will be?

[harley]

Originally Posted by Walt34

The view from here is that the U.S. economy since the early '70s has been built on borrowing and credit. That is not sustainable. I think the dumbest thing Nixon did was go off the gold standard.

OK, everybody, feel free to write in Ron Paul in November.

I've been wondering if the MSM would ever remember that Paul's main economic stance is return to the gold standard. Everybody was laughing at him back in the run up to the nominations. I wonder whether he'd have been taken more seriously if this had all collapsed 6 months earlier.

[lazygood4nothinbum]

steps to secure a permanant early retirement:

Originally Posted by Behan

So if less people are able to retire then I guess more of them will be a) working, b) unemployed or c) dead. Which do you think it will be?

funny you should ask...

WIVB-TV News4 Buffalo, NY |Murder-suicide in California

PORTER RANCH, Calif. (CBS) - Police believe money problems triggered a murder-suicide at an upscale southern California home.
An unemployed man, distraught over his financial situation, reportedly fatally shot his wife, three sons, and his mother-in-law before killing himself.

Fannie Mae forgives loan for woman who shot herself - CNN.com

Fannie Mae said it will set aside the loan of a woman who shot herself as sheriff's deputies tried to evict her from her foreclosed home.

[ziggy29]

Originally Posted by harley

OK, everybody, feel free to write in Ron Paul in November.

I've been wondering if the MSM would ever remember that Paul's main economic stance is return to the gold standard. Everybody was laughing at him back in the run up to the nominations. I wonder whether he'd have been taken more seriously if this had all collapsed 6 months earlier.

So many had been calling Ron Paul a kook with 19th century ideas about money, but he's been the only one of the bunch who has been right all along about how this was destined to play out.

The sad thing is that I and many other ordinary, non-politically connected people were saying the same thing about how this would likely play out as early as 2004. I'll admit that it's looking worse than I figured, though -- and I figured it fairly ugly.

[Behan]

Originally Posted by lazygood4nothinbum

steps to secure a permanant early retirement:



funny you should ask...

WIVB-TV News4 Buffalo, NY |Murder-suicide in California


Fannie Mae forgives loan for woman who shot herself - CNN.com

oh, not funny. I was thinking more along the lines of unavailable/unaffordable healthcare possibly leading to shorter life spans.

[ejman]

Originally Posted by harley

OK, everybody, feel free to write in Ron Paul in November.

I've been wondering if the MSM would ever remember that Paul's main economic stance is return to the gold standard. Everybody was laughing at him back in the run up to the nominations. I wonder whether he'd have been taken more seriously if this had all collapsed 6 months earlier.

Absolutely right. As everyone knows the depresion/panics of 1819, 1873, 1893, 1907, 1929 did not really occur as we had the gold standard back then....