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Retire? How about never?
Old 12-09-2009, 08:59 AM   #1
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Retire? How about never?

IT careers: Retire? How about never?

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Nearly two years into the recession, shrinking nest eggs and the fear of skyrocketing health care costs are forcing late-career IT professionals to trade dreams of early retirement for the reality of toiling extra years in the workforce.

Instead of channeling their energies to around-the-world travel, starting a new business or devoting time to volunteer work, IT veterans find themselves either actively in the job market or desperately safeguarding their current employment. They're refocusing on career management, ramping up their skills training and trying to be as flexible about their job responsibilities as a twentysomething just starting out.
I know I've been spending a lot of my "off" time learning new skills lately.
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Old 12-09-2009, 09:44 AM   #2
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I worked in IT for 25+ years. Historically (as IT goes) it's always been a high paying field. So older IT workers should already be in a good position to FIRE, if they've been good at saving, LBYM, etc. But if they're not, I've always thought that IT was a good field to be in because it's so diverse - if one works at a large company where there's a large IT department, you might have the opportunity to work your way into different areas of IT as your interests shift: programming, system administration, database administration, security, networking, project management... Over my 25 year carrer in IT, I feel like I've had 4 completely different careers. When I got bored with one specialty, I'd work my way into another area. When I was laid off this year, I decided to call it FIRE but I'm pretty sure I could have found something if I looked, but probably with a big pay cut due to the current economy.

In spite of what I said above, I don't think I'd want to be a 20-something year old with plans of a long career in IT.
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Old 12-09-2009, 09:56 AM   #3
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I spent over 30 years in IT and retired at 58. While I was lucky and ended up being granted stock options (that funded half my retirement), I think maybe a few problems like this
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Langford, a project manager in Utah's Department of Technology Services, jumped around a lot during the course of his career, which shut him out from any company-sponsored pension. By his own account, he was lax in proactively planning for retirement with an individual retirement savings plan or 401(k). In fact, he didn't think much about retirement until it sneaked up on him.
might just be self-inflicted.
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Old 12-09-2009, 10:02 AM   #4
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I think maybe a few problems like this might just be self-inflicted.
True. But when people were jumping around a couple of decades ago, I don't think they realized how critical a pension was going to be to early retirement as they reached their 50s and beyond.

I could also say that my decision to go the private sector route was "self inflicted" too, but early in my career I had no way to know that I needed to emphasize a pension and retiree health insurance the way people would today. In other words, those components are a LOT more valuable as part of the total compensation package than they used to be.
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

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Old 12-09-2009, 10:17 AM   #5
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Originally Posted by JoeDreaming View Post
Historically (as IT goes) it's always been a high paying field. So older IT workers should already be in a good position to FIRE, if they've been good at saving, LBYM, etc.
Agreed; been there - did that. Started in the field in 1967; retired (at age 59) in 2007.

BTW, my wife/me still travel around the world (usually two trips ex-US, along with one somewhere in the States) each year. Nothing different than what we have done the last 15 years (12 while we were still wor*ing). And yes, I do volunteer work (deliver meals-on-wheels 2x week, along with a visit to my local "Dracula Parlor - blood donation , every 8 weeks).

I have no complaints, at all. Life is good...
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Old 12-09-2009, 10:54 AM   #6
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True. But when people were jumping around a couple of decades ago, I don't think they realized how critical a pension was going to be to early retirement as they reached their 50s and beyond.

I could also say that my decision to go the private sector route was "self inflicted" too, but early in my career I had no way to know that I needed to emphasize a pension and retiree health insurance the way people would today. In other words, those components are a LOT more valuable as part of the total compensation package than they used to be.
I agree that the health insurance issue wasn't there years ago, but at least you are aware of the need to save for retirement. And I assume you are saving now. The guy mentioned in the quote never thought about it. While there are people like him in IT, there are people like him in every field.

Disclaimer:
I live in Canada so health insurance has never been an issue. Having said that, I've paid much higher income tax bills than those in the USA, so maybe it's a wash.
I have no pension (other than a small DC sum, ~15% of portfolio) and live on my savings.
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Old 12-09-2009, 11:24 AM   #7
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I've paid much higher income tax bills than those in the USA, so maybe it's a wash.
I retired from a company that was based in the U.S. but went through several changes in ownership during my close to 30 years there. It originally was 100% U.S. owned, but over the years was taken over by two different western Euro based firms, both in nothern and southern "Euroland".

Being that I did make many trips to the other side of the pond (my boss, along with a small staff reporting to me was located there), I was well aware of the taxing situation. Depending on country, it ran from 45-60% (maximum) of income, which did provide a great deal of "cradle to grave" coverage.

Not to be political at all, but once you "equalize" what you pay in the U.S. vs. what is paid in taxes in western Euroland, it comes quite close in costs.

However, to our (U.S.) advantage, for those that want to save/invest on their own for retirement, I've found that we have a "better deal" (if we wish to participate in it), IMHO...
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Old 12-09-2009, 11:39 AM   #8
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Quite possibly, I didn't want to take this to taxation etc. and what should be, just mentioned what is. FWIW, I'd rather have paid my own medical bills & kept the extra tax.
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Old 12-09-2009, 12:16 PM   #9
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Quite possibly, I didn't want to take this to taxation etc. and what should be, just mentioned what is. FWIW, I'd rather have paid my own medical bills & kept the extra tax.
Unfortunately your desire (and IMHO, I do agree with you), does little for the "common good", where IMHO, the U.S. is headed in the future ...
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Old 12-09-2009, 12:31 PM   #10
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True. But when people were jumping around a couple of decades ago, I don't think they realized how critical a pension was going to be to early retirement as they reached their 50s and beyond.

I could also say that my decision to go the private sector route was "self inflicted" too, but early in my career I had no way to know that I needed to emphasize a pension and retiree health insurance the way people would today. In other words, those components are a LOT more valuable as part of the total compensation package than they used to be.
Likewise, assisted living and nursing home care are going to be a lot more costly in about 20 years than presently, based on the baby boomers starting to flood such facilities around 2030 or so. So I intend to take that into account in my financial planning as well.

As for pensions, even some of those who earned them are finding that their pensions are frozen and benefits not nearly what they had thought. It is a very sad time for many retirees, IMO.

I really think the recession has pounded the new employees fresh out of college the most, though. I can't IMAGINE trying to get a job in the current recession. It has to be brutal.
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Old 12-09-2009, 12:33 PM   #11
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Likewise, assisted living and nursing home care are going to be a lot more costly in about 20 years than presently, based on the baby boomers starting to flood such facilities around 2030 or so. So I intend to take that into account in my financial planning as well.
Yep, that too. It goes to show that no matter how good a "financial plan" may be when you are 30 -- and no matter how good your assumptions are at the time -- you can count on revisiting it every so often and adjusting to new, unforeseen realities.
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
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Old 12-09-2009, 12:41 PM   #12
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Yep, that too. It goes to show that no matter how good a "financial plan" may be when you are 30 -- and no matter how good your assumptions are at the time -- you can count on revisiting it every so often and adjusting to new, unforeseen realities.
It's pretty hard to do, though, other than just allowing more for nursing home care. But how much more? Who knows. And I'm sure there will be unforeseen complexities. I am not wildly enthusiastic about LTC insurance, which seems like a legitimized scam to me so I am going to try to fund my LTC myself. Maybe I can "fake it till I make it" - - live at home in my old age, and hope that I don't get too batty or feeble before I kick off. But I would really prefer a continual care facility after age 85 or so.

Despite taking a much lower paying federal job mostly for the health insurance in retirement, it looks like I lost that bet now that health care reform will mean health care for all. I am glad for them, but my lifetime earnings were less than they could have been. I don't care, though. I'd rather be safe than sorry (just my nature, I guess).
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Old 12-09-2009, 01:18 PM   #13
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I

Despite taking a much lower paying federal job mostly for the health insurance in retirement, it looks like I lost that bet now that health care reform will mean health care for all. I am glad for them, but my lifetime earnings were less than they could have been. I don't care, though. I'd rather be safe than sorry (just my nature, I guess).
Your retiree health care is subsidized, so you have that advantage. Under the health insurance reform proposals there are subsidizes, but based on low income. Heathcare reform does not yet mean that health insurance will be affordable. So your bet still likely was a good bet.
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Old 12-12-2009, 08:10 AM   #14
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Back to the original story, at first I thought it was going to be about how IT professionals have weathered the storm better than anyone else. It turns out to be the old story about having to keep showing up to work because of poor planning. As for updating skills at the current pace that's expected of most professionals, I think most will need to devote a single page on their CV just to educational experiences by the time they are 50.
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Old 12-12-2009, 12:14 PM   #15
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True. But when people were jumping around a couple of decades ago, I don't think they realized how critical a pension was going to be to early retirement as they reached their 50s and beyond.
When DH and I married 18 years ago, his salary at megacorp (a technical position) was about half mine. In comparison with what people make in my profession I thought he was relatively lowly paid (he thought it was a fine salary and that I was wrong). I thought about whether the fact I made more than him mattered to me and it didn't. I knew he had good benefits and a future pension but didn't really think much about it.

Flash forward 18 years.....

DH still with same company (actually in IT now) and bonuses have vastly increased so I still make more but not twice as much. The spread is not nearly as great now.

But, it is his pension that will allow us to retire. That pension translates to a near 7 figure lump sum. And the subsidized retiree medical for him and his family means I could retire before 65. The biggest contribution to our retirement is really these features and are far more valuable to us than my greater salary.
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