November 21, 2011

Retirement? We Are On Our Own

The "Super Committee" became the "Super Dud" when 12 politicians couldn't put their differences aside long enough to accomplish anything other than sound bites and finger pointing. In a turn of developments almost mind-numbing in its disregard for the will of the the people to tame the deficit, some in Congress now propose to soften the automatic cuts that are triggered by the committee's failure. In a case of "we really didn't mean to show any backbone," now that they are facing the reality of massive, across the board cuts in about a year, there is a movement to change the rules of the very game they invented and passed into law just a few months ago.

This is not a rant, nor a political post. There is more than enough blame to go around. The Republicans and Democrats are failing us in a way their election-centric brains can't even recognize. But, what is becoming more clear with each passing dose of stupidity from Washington is that we, as retirees or wanna be retirees, are really on our own. We can't count on our "leaders" to do the right thing. So, let's proceed from the very logical position that any hope of having a satisfying retirement is largely up to us.

Financially, we must take control of our own money. If your bank is treating you poorly or layering on the fees, move to another bank or credit union. If you are comfortable with an Internet bank, go for it. If you have a financial advisor or stock broker, are you confident he or she understands your desires, your risk tolerance, and your goals? Sit down with them and review your account. Question everything that doesn't make sense to you. If you are unhappy give that person new marching orders or switch to someone else.

We can't afford to be uninformed about the world of money. If you don't use a budget, start. If you have no idea how much interest your credit card company charges, find out. If you don't understand your pension or IRA, use the Internet to get educated. If you don't understand some aspect of the financial world that affects you, ask questions and get answers you can understand. If you still believe these folks are really looking out for your best interests and ignorance is bliss, then you are likely heading toward a rude awakening.

The government may be unable to figure out how to tame a deficit, but luckily we are quite a bit smarter. We can choose to not spend more than we make. It is easy to eliminate things from our life that cost more than they are worth to us. We  understand we can't afford every want when we want it. Instant gratification is a freeway to financial ruin. Simplifying our lifestyle, cooking more meals at home, using coupons and shopping grocery store specials can save hundreds, if not thousands of dollars a year. We know a 50" LED TV won't really make us any happier than last year's 42" model. We know we can do just fine without the newest 4G smart phone.

What are your health care options? For many of us, the choices are poor: no coverage, expensive coverage with more holes than swiss cheese, or hoping to make it until Medicare or the health care law changes, in whatever their final form, take effect. Have you researched all your options? Are you waiting for Washington to solve the problems? It isn't likely to happen anytime soon.

Many drug store chains offer all sorts of free or discounted tests at various times of the year. Hospitals often sponsor health fairs that have free testing. Take full advantage of these offers. A no-cost blood or colon cancer test can save you hundreds of dollars, and more importantly, your life. Free glaucoma screening could undercover a problem before you lose your eyesight. Watch the paper and check on the Internet for these opportunities. We can, and must take more responsibility for our health and its care.

We control how much we spend on travel, leisure, and entertainment. Leading a satisfying retirement is really about making smart choices. If you have saved enough money for the 12 day Caribbean cruise and it is important to you, take it. If you don't have the money, then stay off the ship. Spend the time finding things going on around you that are free or very low cost. I am lucky to live in a major metropolitan area that, on any given night of the week, has dozens of free or nearly free music events, plays, art exhibits, lectures or films to choose from. Unlike the government, I don't spend money I don't have but I can be as entertained and stimulated as I choose to be. 

Obviously, there are critical parts of our retirement life that are out of our control. We have little say in what ultimately happens to the deficit debacle. The AARP notwithstanding, if there are going to be cuts in Social Security and Medicare/Medicaid coverage we will have no choice but to adapt. Taxes may go up and deductions down. We can adjust our way to living to a degree to make those changes less damaging, but ultimately we will pay the bill.

At least at this moment, I don't expect the government to make the smart and painful decisions required. I imagine we will have to get to the point where many European countries are before the politics stops and the triage starts.

Fortunately, I also believe that I, and you, can do a lot on our own to make our retirement as good as it can be. Attitude is free and makes a world of difference. We control more of our own destiny than we may think. Washington is telling us, as clearly as they can, that we are responsible for much of our fate. We are on our own and I am glad. I have faith in me.


  1. I never really gave moving out of the country a second thought for the retirement years, but lately I think about it more and more. This country seems to be self imploding. Quickly.

  2. Bob,

    Great article. I believe you summed it up very well at the end - "I have faith in me" from a financial standpoint, versus a politician or some self-declared "expert" at any level. Educating oneself and making decisions in you and your family's interests is the only viable approach to take. I for one make all my own investing decisions, and have for many years. I will also compare and contrast pricing on a need, which tends to be more rapid, versus a want, which I can put off for years until getting a price I desire (think TVs and electronics in particular.) Within reason we try to live a healthy lifestyle, and take advantage of any opportunities to lower our costs through Medical Savings Accounts as an example (we even got free flu shots this year from our local electric utility). And on and on.

    The point is that it takes time to get to the point that you are less dependent on the system in general. You have to take the time to educate yourself so that you can determine whether a stock is a good value or not, versus being able to name who did well on the latest installment of Dancing with the Stars. You have to scour the Internet for the best deals on groceries, dining out, electronics, and so on. Cull out those things that are not important, but spend on those that either save you money in the long run, or pay you back on a regular basis.

    These actions might wind up going for naught if our government continues to spend us all into oblivion, but we have to continue to try whether they do or not. To do otherwise is to throw in the proverbial towel, and I have never been one to do so. As always, keep up the great work, Bob.


  3. Roberta,

    My wife and I have talked about the same scenario over the past several years. The problem is there is no place we could see ourselves living that isn't beset by the same issues, or at least affected by them. And, with family here, a move to somewhere else is not likely to happen.

    Plus, I must add that even with all our problems and complete lack of leadership, there is no place with our advantages. But, boy, does it anger me to watch our greatness be destroyed by small people.

  4. I think the one thing that will remain pretty much as it is now is Social Security. All those politicians are just too afraid of us seniors to change it much. Even with no changes it will be able to pay out at least 75% of what is promised even to 2034. I suspect that most of your reader will be long gone by then (ha).

    Another thing to look at is if you are paying a percentage of your nest egg to a financial advisor make sure he/she is really earning that money. I know the stock market as a whole has not really increased much in the last 12 years has your advisor done better? With interest rates hovering around not even bonds are not gaining in any value. It seems that the old mattress is not much different than anything else now days.

  5. Chuck,

    Excellent summary of a reasoned, logical approach to a problem that so far has no end. Europe is in a bigger mess than we were 3 years ago so their screw ups are pulling us down even faster.

    Like you, I am an optimist by nature, but I am not Pollyanna. I am disgusted by Washington but have enough faith in our overall strength to keep plodding forward and search out ways to control what I can.

  6. RJ,

    I hope I'm still around in 2034. 85 is not that old! I have come to the conclusion that another round of my own budget cutting is in order as well as efforts to begin generating some extra income. possibly from this blog and any spin offs.

    Just in the last two days the stock market is off over 500 points and my paper loss in the IRA is tens of thousands of dollars. Just as it was beginning to recover here we go again.

  7. "We are on our own and I am glad. I have faith in me."

    Amen and preach on brother!! I find myself paying less attention to the Washington circus and feeling less frustration. (Although I must admit that thinking about what their ideological impass is doing to my carefully saved 403b makes me want to...well, nevermind...)
    I am in Texas and it is raining. I have the windows open so that I can hear and smell the good rain that we have needed so long.

  8. This isn't about retirement, but I'm facing the same realization with respect to my two autistic sons who will need life long care. They depend on their government benefits, but I can't trust that those will be there for their lifetimes. So the main part of my estate planning is to be sure there are back up funds for them if they need them. My concern is that they are going to "be on their own," too, but without the ability to make the decisions and take the steps that you and I can take on our own behalf.

    I know that is not relevant to retirement, but I find that in many areas of our lives, we need to be responsible for ourselves and for those who depend on us, without counting on "them" to act in our best interests. I share your frustration at Washington. I'm turning to look in the mirror for the help I need. Like Florence, I'm paying less attention to the news and putting my own house in order. I appreciate that you and Florence see the joy in that approach.

  9. Yup,
    Been a survivalist all of my life.
    Dad had a bomb shelter in the back yard (which became a swimming pool).
    No need to change now.
    Save as if it is only for your family tomorrow. Live on the rest.
    Still going to Hawaii
    Still would never move to another country (OK- maybe Canada- but it is REALLY cold up there). BTDT- other countries have problems both different- and the same.
    BTW-Sen Kyle is from your state (and was a darn good Senator until he took the party line about four years ago:<(

  10. Florence,

    I saw a great idea on your blog: make all members of Congress independent contractors. That means we can hire and fire them at will, there are no benefits provided, and they have to fund their own retirement and pension. Under that setup the only people who would serve would do so out of a real sense of service, not greed and power.

    Great idea!

  11. Galen,

    Looking at the mirror for help...a great image. The all powerful "them" only get the power over us we give them. Let's all act like our forefathers did back when they lived on farms or ran a small business and took care of themselves. "They" can do what they want while we have a joyous life filled with the stuff that matters.

  12. Janette,

    When anyone of any party signs a "pledge" from a splinter group to pander to those voters, they are no longer representing anyone except themselves.

    Go to Hawaii...heaven on earth. Stay in the USA and do what we can to make it better but realize ultimately, God has given us the responsibility to lead our lives the proper way. We should not expect others to do as good a job as we can in fulfilling our promise.

  13. Based on our inept government, it is more important than ever to save, save and save. It looks to me like my "satisfying retirement" won't come for quite sometime. Sigh.

  14. I agree with the strategy of taking care of yourself, as much as possible. You do not want to depend on SS for all your retirement income, for example. But in many ways we are all in this together -- from your local police and fire dept. to our national defense and the Federal Reserve. Who said it? We will all hang together, or we will hang separately.

  15. Sharon,

    Your "year of spending less and living more" just might stretch for quite a bit longer, I'm afraid. If you can have a satisfying life then you are ahead of the game.


    Yes, we are all in it together. But, without being too cynical some of "us" have more control over how it all plays out. I feel sorry for the poor, the marginalized, the kids in our schools, the teachers, and the first responders who have to deal with all the human misery such a situation causes.

    But, I look to the future and hope for the best.

  16. Great article, Bob! One comment about living overseas. You mentioned that all parts of the world are beset by the same problems. I spend 2 years each in Spain and Greece while in the military and one aspect of living in another country is that I don't think you get as caught up in the political issues and what's going on there. Of course, it's also possible to just stop paying attention here to things you have no control over either.

    One thing I choose to do to take more control of my health is to put my money into staying healthy and staying away from doctors! I have a membership at the Y and take yoga and tai chi, I walk daily and I spend money on lots and lots of healthy foods, etc. I think staying healthy is the ONLY way you're going to be safe in the climate that surrounds health and medical issues. At least I plan to give it a good try!

    The only thing we have a concern over is how the coming cuts will affect my husband's military retirement. Any Medicare cuts also affect our Tricare health insurance too.

  17. Joan,

    I would bet that the average citizen of Greece is very aware of what a mess their country is at the moment. I just heard a news report this morning that there is no way Europe will avoid another recession, which obviously will further weaken our situation.

    Not paying attention to how screwed up we are isn't the answer for me. Rather, I try to not dwell on it and let it affect my attitude or how I live day to day.

    For those who haven't checked out Joan's blog, do so by clicking on her name in red. She provides a steady stream of health-oriented information...she lives and supports good health.

  18. Hi, Bob...

    You're quite right; we retirees really do have quite a bit of control over our expenditures, and thus, our lifestyle. It's interesting too that so many of the more adventurous aspects of retirement are less expensive. Adventure travel, by bus through less affluent countries for example, cost far less than cruising the seas in luxury. Bill

  19. Bill,

    Expenditure control..maybe those of us who have figured it out should go to Washington and have a seminar!

    Happy T'Giving, Bill.

  20. Spend the time finding things going on around you that are free or very low cost. Good advice. Most of us have plenty of things to do in our own area that now we are retired and have time, can check them out.

  21. Robert,

    I am always amazed at all the stuff to do that is low or no-cost in this area. By checking several local web sites I have a list that could consume my whole week if I let it.

    Except for buying occasional movie tickets and tickets to one of the local theater groups, we thrive on that entertainment.

    BTW, your site about small town retirement is one I check regularly...good info.


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