April 20, 2012

How To Mess Up A Retirement

I subscribe to a dozen different Google Alerts to help me get ideas for blog posts. It works like a newspaper clipping service used to operate. Once a day Google sends me links from the Internet and relevant blogs that contain information based on key words I supply. For example, any time the words "retirement blog" or "Senior Health" appear in a blog or a news story, Google sends me a link.

For the past nine months or more, the number of links that contain negative information have dominated these e-mails. Almost all financial stories are doom and gloom. The inability of seniors to retire, or the negative effects on health from stress and worry fill these alerts. If I believed that was the full story I'd pull the plug on Satisfying Retirement, since apparently no one is having one anymore.

Like you I know that negative news usually trumps good news. Politics is a prime example. Only bad news about the economy, a misstatement that causes embarrassment, or the leveling of a totally erroneous charge against the opposition will make the news. Entertainment reports are filled with divorces, deaths like Whitney Houston's, or stories of plastic surgery gone bad. That is what attract viewers. And, don't get me started on the tabloids (I had a Martian's baby?).

So, if you want to ruin a perfectly good retirement only allow these type of stories into your life. Believe that everyone is close to living on the street, we are all eating dog food, haven't been to a doctor in two years, and divorce is right around the corner.

Actually, there are five more ways to mess up what can be the best years of your life: insist things be the way you want them to be. Can you relate to any of these?


Insist that your retirement look like your parents' retirement. The world is a different place than it was just one generation ago. Retiring with a solid pension, a good health plan, a dependable Social Security check and Medicare coverage made mom and dad's retirement years generally rather safe and steady. Golf, travel, sleeping late, and lots of reading filled their days.

Well, wake up and smell the deficit. Those carefree days are gone and not likely to return. Most of us wouldn't be content with such a laid-back lifestyle for 20 or 30 years anyway, but the security and stability would be nice. Hold out for what dear old mom and dad enjoyed and you will be disappointed.

Insist that that it follow exactly your plan. As I noted in The Illusion of Control a guest post on Galen Pearl's blog, control is something we crave, expect to maintain...and are kidding ourselves. Plans are important, but not necessarily reality. John Lennon had it right: "Life is what happens while you are making other plans." By insisting that the retirement you plotted out for yourself oh so carefully follow that script without deviation is folly. A satisfying retirement requires flexibility.


Insist that "they" are responsible to provide you a nice lifestyle. There is no more "they." Neither business nor government can guarantee you anything. Life doesn't work that way. If you don't take responsibility for your own investments and savings, for living beneath your means, and bypassing immediate gratification for a more secure future, I'm afraid 'they" will not be there to rescue you. Life isn't particularly fair, but blaming someone else will really get you nowhere.


Insist that you will not get sick and need help. There is no need for health insurance, long-term care plans, or prepare for when it is time for a nursing center. You have great genes and a family that will take of you. Both those facts may be true, but if you don't plan for poor health you are buying yourself a boatload of trouble. The human body is designed to wear out. Our lifestyle and dietetic choices hasten that process. You can do a lot to delay the decline and improve the quality of your later life. But, the prudent person also makes plans for when all else fails.

Insist that no one else saves much and they are fine. We read all sorts of stories of 50 year olds with $25,000 in their retirement account, or folks living off just Social Security and doing fine. Both stories can be true, but what is missing is the quality of the retirement these approaches produce.

If you are in your 50's (even 40's) and have saved virtually nothing for retirement you have two choices: have a rich, older relative who has you in first position in his/her will, or plan on working until you die. Those are the only ways having such an insignificant savings account will work.

Yes, you may be able to exist on just Social Security with Medicare help, but your daily lifestyle will be quite restricted. With the average payment just over $1,100 a month you will have little or no discretionary income. After the necessities are paid for the money will be gone.


Every one of these reasons you find yourself in trouble instead of in the midst of can be the greatest time of your life doesn't have to happen. Each of the five is controllable by you. Can the economy or government screw ups, bad luck in the health department or an unavoidable accident ruin even the best laid plans? Absolutely. But,  why contribute to the odds of problems? Don't mess up your chance at a truly satisfying retirement lifestyle by denying personal responsibility for what happens. If you look for a scapegoat it is very likely that it will look a lot like you.

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34 comments:

  1. Every one of these reasons you find yourself in trouble instead of in the midst of can be the greatest time of your life doesn't have to happen. Each of the five is controllable by you.

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    1. That is the real answer: personal responsibility and planning. That is ultimately what is encouraging.

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  2. Hey Bob,
    * I'm just not ready to give up on the contractually promised pension from my thirty years of service to the company I retired from.
    * I'm not ready to give up on getting some of the money back I paid into Social Security for over 35 years.
    * I'm not ready to chuck out Medicare simply because the radical right insist on putting our wealth into our war machine instead of helping to care for its seniors.

    These are things that I will fight for tooth and nail. I am not surrendering and going on my own in these areas. Yes, I realize that pretty much nothing is totally in my control. I could save all the money in the world and end up not getting any interest payments on it because someone decided to keep them at 0%. Or worse yet I could see my savings basically dwindle away due to rampant inflation as is happening in other countries.


    How is that for a contrarian comment :)

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    1. Actually, it is quite in line with the post, RJ. You are insisting on what is rightfully yours and actively managing your future. You are not just sitting back and assuming it will be fine, and then griping when it is not.

      I am banking on Medicare relieving me and my wife of some of our very large yearly expenses for health insurance and medical care. We have carried our own, private insurance for 36 years while I paid into the system. But, during those 3+ decades we didn't insist that someone else pay our medical bills by using emergency rooms or public hospitals.

      I expect to start receiving Social Security checks in a year. But, I didn't build my retirement plan on them. They will be an important addition but not the foundation.

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    2. Steve in Los AngelesSat Apr 21, 05:13:00 PM MST

      Bob and RJ: I also am insisting on what is rightfully mine. I also am actively managing my future. I definitely am not just sitting back and assuming everything will be fine. I now am age 56 years and 2 months. Although I do have a pension and anticipate starting Social Security at age 70, the bulk of my income will come from two annuities I set up with my own savings. For at least the next five years, I will continue to live frugally. I have a comfortable home, which is a two-bedroom and two-bath condominium that I purchased about 3 1/2 years ago. I will have the loan paid off between 59 months and 123 months from now (as I have been making principal-only payments in addition to my regular monthly loan payments). I also have a part-time job. Although I do have health insurance, I keep myself in shape with a lot of walking and a good diet. I have NO health problems. My health currently is excellent. Consequently, other than my monthly health insurance and long-term care insurance costs, my health expenditures (including dentistry and optometry) are substantially less than $1000 per year. I eat and prepare the overwhelming majority of my meals at home. I rarely drive my car. Instead, I almost always walk or use public transportation.

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  3. R.J. is right...I too, am not ready to throw in the towel on Social Security and Medicare or even pensions. These were some of the greatest social achievements of our country. Yes, big corporations, insurance companies, banks, and billionaires tell us they are unsustainable and therefore must be done away with. They tell us to put our money in the stock market because pensions are dead. They fill us with fear for the future. Guess who benefits from that strategy? What we really need is proper management and oversight of SS and Medicare, regulations on coporate shenanigans, controls on health industry gouging. Let's put our energies into saving and improving upon the best social programs we'll ever have! We can still live beneath our means and plan our retirements well, but know we have the safety net in place to cushion us from unforseen events.

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    1. Did you read the story about the stockholders at the annual meeting for a banking corporation that voted down the $15 million salary for the CEO? That is apparently the first time that something like that has happened. Those stockholders decided enough is enough and paying anyone that kind of money, particularly when the bank is performing poorly, is obscene.

      I agree you you and RJ. I'm expecting Social Security and Medicare to be there. But, my retirement will not collapse if they have been gutted by politicians who insist that weapons are more important than people.

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  4. My husband worked for Kmart for 35 years in management. He had planned on and counted on his pension which was why he hung in as long as he had to for all of it. Unfortunately in the last year of his 35 the company was going bankrupt. They turned everyone's 401k's into stock only and the stock dropped like a stone. Then they filed bankruptcy and there was nothing left. His pension is half what we anticipated.

    Does it make a difference? You bet it does! We are fortunate to have made some good real estate investments and that will help us through the worst, I'm praying.

    As for me, I love what I do and will never retire in the true sense of the term.
    Good post Bob! thanks!
    b

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    1. That is the type of story that drives me crazy. Your husband plays by the rules, does everything he should, and still gets screwed by the company and left holding the bag. I will bet the key executives had golden parachutes or kept their jobs after Sears bought Kmart.

      Through no fault of our own, except for showing loyalty and dependability, our retirement can be messed up if we trust others to do what they are morally obliged to do. Unfortunately, all is fair in love and war and business.

      Our generation has gotten caught by this massive shift. We started our working lives in an environment where company loyalty did maker sense. But, 30 years later we find ourselves being played for suckers for doing so.

      Is there any wonder younger folks show little commitment to a company they work for. They are well aware of stories like your husband's and what awaits them if there is the expectation that "they" will take care of them.

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  5. Interesting posts today. I agree completely with the thrust of your post, Bob. We have always lived below our means, carried proper medical insurance, paid our way and others way, but I still have a feeling that it could all be taken away tomorrow. That is what happens when we have a government that feels it can distribute the fruits of your labors better than you can. But I digress. The point of your argument is to prepare for your own retirement since no one cares about it more than yourself. I too look at Social Security as deserved and a welcome addition to my cash flow, and will accept Medicare grudgingly when we also hit that age (since I buy into a better health care plan and would prefer to stay with that, but will be forced out of it when we hit a certain age coinciding with Medicare eligibility.)

    For those who live for the moment and never prepared for retirement, I believe you should reap what you sow. For the rest of us, I hope we can enjoy a number of years of fun and personal enrichment.

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    1. "Reap what you sow" is a good summary for too many people. But, as Barbara's story relates in the comment above her husband did everything he should have and got nailed by a corporation's poor decision-making. Luckily, Barbara and her spouse did what many folks didn't and hedged their bets with other investments. We must always be proactive in protecting our future. Maybe nothing bad will happen, but then again, maybe it will.

      Have a great weekend Chuck. Enjoy a nice Tennessee spring.

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  6. Best post I've read on the topic in quite a while. I'm going to memorize the whole thing -- including the comments -- and meanwhile I'll hope for the best, but prepare for the worst.

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    1. Thanks, Tom. That is all we can do isn't it: hope for the best and prepare for the worst.

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  7. I'm sorry Bob, but the reality is that most people are suffering. Period. Most people aren't agile enough to roll with the punches. Especially when you are older. I can't shy away from all my friends hard luck stories, nor can I say 'But for the grace of God, there go I'.

    I would have to say that 99% of the people I know have all had to dumb down. Most are suffering and still put up a false facade. It's tragic and sad.

    Me? I no longer expect anything in my future. I just live for the day, do my best, try to have the best laid plans but know anything and everything can change in an instant. I'm semi-retired BUT must still work. Thankfully, a writer can write till the exact end of life. Think Andy Rooney. He's my idol.

    I do not diminish anyone anymore. It is what it is. People will indeed reap what they sow. I no longer feel sorry for them anymore. I only care about myself. Survival of the fittest.

    The only rule that I know is golden is 'Prepare for the worst. Expect the best.'

    Morrison

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    1. Hi, Morrison. You are still missed in the blogging world, but I can certainly understand your moving on.

      I think you and I agree on the central point that nothing is guaranteed to us. If someone insists that things must operate a certain way he will probably get burned.

      There are many ways to mess up a retirement, some we can do nothing about and should feel no blame or guilt. The ones noted in this post are the ones under our control and can affect the quality of the experience.

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  8. Bob, thank you for sharing this post and telling it like it is. I don't get the links sent to me but daily I read blogs and the news in the newspapers on the computer. Sometimes, I have to back away and go to something else such as your blogs. All the negative is way too much. We have to stay positive and do what we have to do. Taking care of our health and not expecting others to take care of us is two things that I work on daily. Times change and we can change also. I stay focused and strive for the best that life has to offer. As I have said before, I really enjoy reading everything that you have to write. It is almost like having a personal friend. Great Blog!

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    1. I think of those who read this blog and those who leave comments, as friends. If it hadn't been for that, Betty and I wouldn't be heading to Oregon this summer to spend time with other bloggers.

      As Morrison notes in the comment just above yours, through no fault of their own a lot of people are hurting. People like Barbara's husband (see above) played by the rules and was screwed over at the last possible second by his employer of 35 years. There is no way he could have known his fate, but he and Barb did provide for secondary streams of income, thank goodness.

      I try to present a case for those who wander aimlessly into retirement, with little thought and less planning, that they are destined for a rather ugly wakeup call.

      A sincere thank you for your comments and presence.

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  9. Bob... I especially appreciate our point about a satisfying retirement requiring flexibility. As they say, "the best laid plans of mice and men." Bill

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    1. Did your trip to Peru require flexibility? Could you have seen that coming a decade earlier in the middle of your management consulting career in Southern California? No. But, you and Wendy decided to shake it up and go for the adventure. I would bet you agree that flexibility has paid off nicely.

      By the way, Betty and I are giving some serious thinking time to two scenarios for our retirement direction in the not-to-distant future: living part of each year on a cruise ship seeing the world, and living in an RV as a volunteer host in National Parks each summer. Folks like you and Wendy and other blogger friends like Early Retiree Tamara are giving us a new vision of our future. I'll have a post on that coming up in a week or so.

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    2. Bob, I believe you would be very, very qualified to be hired as a cruise ship lecturer should that be something you'd consider. Cruise ships are always looking for interesting speakers, and in return you and your wife would both get free passage. In particular I believe Princess, Holland America and Cunard would all be good fits for your audience demographic.

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    3. Well, there is an interesting thought. Wouldn't the number of people hoping to land such a gig be huge? I wonder how you qualify? I'm sure they would want someone who has some type of track record of similar presentations. It is worth exploring.

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    4. Here's a link with some pretty specific info. :-)

      http://www.cruisecritic.com/articles.cfm?ID=1176

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    5. Fabulous...I just looked and it answers most of the questions. It is interesting that agencies book most of the speakers and can charge more per day than it would cost to go on the cruise!

      I will definitely check this out. Thanks so much for the link.

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  10. Bob, hearing more and more about the cruise ship lifestyle and those who live it. Fascinating that some people can save $ and have a more enjoyable retirement doing so. And the RV angle is something we thought seriously about doing, but moved instead. Both are outstanding ideas. I look forward to ready about the adventures in either if you and Betty go in that direction. Have a great weekend.

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    1. We were actually talking about the cruise idea tonight at dinner. Our personalities are probably better suited to the river cruise type ships: smaller, less of the casino/entertainment/high end dining lifestyle. We'll see. But, we did agree we are within one year of buying an RV. We'd like to rent an RV and spend a few weeks in the San Diego area this fall just to see how we and the puppy do.

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    2. Bob, Same thought would apply to river cruising too . . . you'd be a terrific guest lecturer, in return for free passage. Your thoughts on how to structure a satisfying retirement lifestyle would be an absolutely natural fit for the typical river cruising passengers.

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    3. I certainly would be comfortable doing that. I just wonder how someone "proves" his or her qualifications.

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  11. The RV idea is neat. Volunteering at a park is a great way of fulfilling the desire to be involved while enjoying the beauty. Our state park (large lake) has a volunteer group that works ( and lives) there year round.

    As for ruining retirement, we are slowly pacing ourselves with our budget. Flexibility of working a few days a month in a classroom has eased us away from using our nest egg at all. Does that make me semi retired? I don't make enough to deposit a full IRA, but I do make enough to enjoy some extra flights to see "the kids".

    As for those who are hoping an older relative will leave them something, probably have a long wait. With our parent's generation living into their late 80's and early 90's the "children" are well onto their 60's or 70's before they inherit anything. Knowing the most expensive part of life is the last two...there might not be much left. Don't forget the inheritance tax goes back to 650,000 next year...
    We are planning for little SS and no inheritance. With my figures crossed, I am fairly sure both will be there in the end.
    Enjoyed the positive spin to a negative subject.

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    1. The ping-pong of the "death" tax total for the last several years has made estate planning a royal pain for everyone. Congress gives no thought to how tough it is to keep having to adjust every few years because they can't make the hard decisions.

      Will they really let the %5.2 million exemption revert back to under a million? Even if it does there will likely be a retroactive fix. But, that doesn't help my dad any. He is 88 and can't assume the lawmakers won't do something stupid so he must re-work all sorts of parts of his trusts just to be safe...and then find out all the money and worry was for no reason.

      Pacing yourself is a good way to think of it, Janette. I bet you will be just fine.

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  12. Admittedly I fall into the contrarian camp on this one, lol. I have a government pension, social security and dont expect either to go anywhere for us. The younger generation is a different story. I work, but its not necessary, its something I love and I will only do it for a few years. However, I realize that for many folks the pension has gone the way of the dodo bird.

    Of course, medical care is the elephant in the room, as always.

    I'm a cruise girl myself..while I like the road trip and rv idea, I generally need a little more luxury....and of course MOST of the time those cruises are in warmer weather, lol. Would you continue to live where you are or downsize more if you chose one of those options?

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    1. WE'd plan on a downsize again to a condo, so someone else could worry about any maintenance issues, heating & cooling costs are less, and security is better for any extended periods. We cut from 3400 to 1700 sq. ft. during our last move. This time I'm thinking something in the 1200 sq ft range will be about right.

      If we did the cruise idea it would have to be in short bursts for the next several years. Neither Betty or I are comfortable with the idea of putting a dog in a kennel for anything exceeding 2-3 weeks.

      The nice thing about the extended RV trips or spending the summer at a park is the dog would fit in nicely to that lifestyle.

      The "elephant" of medical care is likely to outlive all of us. Regardless of what happens to so-called Obamacare, our politicians don't have the political will to really solve the underlying problems because we have become too used to others paying most of the bills. An actual fix would be too painful for anyone to accept, so my guess is we will continue to muddle along far into the future with a system that is fundamentally flawed but too ingrained to be uprooted.

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  13. Steve in Los AngelesSun Apr 22, 06:22:00 PM MST

    Bob: I have been living in my condominium, located in a suburb of Los Angeles, for about 3 1/2 years and I love it. My condo, which has two bedroom and two full bathrooms, is about 849 square feet and meets my needs very well. For me, unless I need long-term care MANY years from now (as I am only age 56 and have no current health problems), my current residence will be my last residence. I do have long-term care insurance, which is very reasonable in price.

    With regard to health care, I still pay for my health insurance. Fortunately, Kaiser Permanente is reasonable. Furthermore, I do my very best to stay healthy. I walk quite a bit and am in EXCELLENT physical shape, have a great diet, avoid cigarettes (and avoid secondhand smoke as much as possible), and get health physicals once a year. Fortunately, my lungs are in EXCELLENT shape as I can walk briskly, ride my bicycle, and even run occasionally with NO problem. I DELIBERATELY avoid smokers of all types when I am outdoors. I also make sure that I get a lot of sleep each night. I am 5 feet, 10 inches tall and weigh about 145 pounds. When I reach age 65 in less than eight years and ten months, then I will be in Medicare. Some people may say that eight years and ten months still is quite some time away. That MAY be true. However, time has a tendency to go by quickly (at least according to our perceptions) as we get chronologically older. I clearly remember celebrating my 50th birthday over six years and two months ago. That time went by quickly! Some people have a hard time believing that I am age 56. I inform them, as hard as it is for them to believe it, that I REALLY am age 56. When other people make such comments, I take such comments as compliments and thank them. I must be doing a truly EXCELLENT job of taking care of myself. As important as my financial well-being is to me (and I take my financial well-being VERY seriously), my health is of far greater importance. Fortunately, I never again will have to worry about my long-term finances. I currently live very frugally. I always will live conservatively.

    Everyday, I think about my Mom and Dad. My Mom passed away in January 2000 at the age of 72. My Dad passed away in October 2002 at the age of 81. Both of my parents worked very hard during the working years of their lives. They also provided me with a lot of life values which I always will keep. However, sadly, both of my parents were cigarette smokers. They each started smoking during the early 1940's. My Mom clearly passed away from the effects of smoking cigarettes as she had chronic obstructive pulmonary disease (COPD). My Dad, who had health problems different from my Mom's health problems, had a fatal heart attack. My Dad, who quit "cold-turkey" from smoking cigarettes for five years starting in the summer of 1969, eventually went back to smoking cigarettes. However, I do believe that the five years that he was a non-smoker saved him from my Mom's fate. My Mom did not stop smoking until it was too late as there was already too much irreversible damage to her lungs.

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    1. Thanks, Steve, for the detailed look at your situation. I'm pretty sure most readers would agree you are not on the path to messing up your retirement.

      My eldest daughter had a condo of just under 800 sq ft and it was just the right size for her before she got married. Since Betty and I each have projects that require some space I would guess we'll need 3 bedrooms, 2 of which will be office/project space. I'm guessing that will require at least 1000-1200 sq ft to not feel too closed in.

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    2. Steve in Los AngelesSun Apr 22, 09:24:00 PM MST

      Thank you, Bob. I learned a lot from my Mom and Dad. I was very observant of how my Mom and Dad conducted their lives during my earlier years. I also wish to add that I go to my parents' grave sites, which are next to each other, on a regular basis and, of course, think very deeply about them.

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