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Wednesday, May 27, 2009

Retirement

I think retirement as people used to think about it is about dead. If you depend on someone else to take care of your future then you will probably be disappointed. Too bad for folks who are pushing 65 and have been depending on others. I think a lot of them were lulled into a feeling that they could retire without any worries. The economy has overall been good and people made a lot of money in the stock market and in real estate. I guess they thought it would be that way forever. Add to that the fact that people are living longer while the retirement age has not been rising as fast.

If you can come up with the wealth to retire at 65, or 55, or even 40, then by all means do it and enjoy yourself, but don't think of retirement as a right.

Here is a good rule:

Look out for number one.

In other words, you need to make the decisions on what will be best for you and your family. If you work for a company that has a retirement/savings plan then take a long, hard look at it and decide if it will give you the kind of living you want later in life. If you don't think it will, then do some investing on the side, or find another company, or do something to fix the situation. Complaining about it probably won't help. Please don't lobby congress to pass some new rule requiring my children to pay for your retirement.


Here is another good rule:

Don't put all your eggs in one basket.

This means don't have just one plan on how you will get by. Diversify your investments and diversify your sources of income.

Once again, I thought everyone knew that. I can remember my grandmother saying that many years ago. I remember my second grade school teacher saying that as well.


Here is one more rule:

Nothing is guaranteed.

Just because you put money into the companies stock doesn't mean you are guaranteed a good and easy retirement. The same goes for social security. Plan on those not being there and provide for yourself. If the company is still in business or social security pays you anything then it's gravy.

I hope the younger people in this country look at this situation and plan for their own retirement instead of planning to let someone else provide for them or just hoping it will be alright.


2 comments:

The Hermit said...

I had most of our retirement funds in the stock market. The market had been going up steadily for a long time. I was getting good returns. I didn't make risky investments, I put the money into preferred stock at financial institutions, and in good companies like Windstream. Unfortunately, before I retired and converted the investments to something more tangible, the market crashed and with it our retirement plans. It's hard to see what else I could have done in retrospect. You could put money into a CD put it wouldn't keep up with inflation. You could buy government bonds but they weren't paying enough to keep up with inflation. I could have buried the money in a jar under a tree I guess. Maybe I should have.

Bitmap said...

Heck, you were investing. I've known a number of guys that were 55 and just started investing. Granted, most of them had their house paid for, so as long as they could make enough for taxes they would have shelter.

We moved our 401ks to a money market mutual fund when the stock market was just off it's high. It was a good move for the short term, but as you noted it won't keep up with inflation. With the inflation that is coming my paycheck won't keep up with it, either.

One investment we made was to buy some working farms. We are the landlords, so to speak, and we have a rental agreement with a farmer to work the land. He pays the expenses and we split the gross from the crops. It's fairly good money for not working and it has many tax advantages, and if we want to we could lease the land to hunters for another chunk of change. There is no guarantee with this plan, either, but retirement is about hedging your bets. We have wealth invested in different things and hopefully they won't all go down at once.

Add this to a couple of other small business ideas we have and we hope to make it.

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