Not That Person
WHAT DO WE MEAN BY an “enjoyable” retirement?
I suspect there are as many answers as there are retirees. But one thing remains a constant: the need for an adequate income. Given a choice, I don’t think many people would choose to live a frugal, barely financially sufficient retirement.
My father retired at age 66. I say “retired,” but the reality is one day the owner called him into the office and said he was no longer needed. My father loved his job selling cars and had done it for decades. The next day, the owner called my father, literally crying over what he’d done, but he didn’t change his decision.
To say my parents weren’t prepared for retirement is an understatement. There was no pension or retirement plan. They had $30,000 in a checking account, plus some shares worth $2,625. Their sole income was Social Security. They survived financially because my sister and her family lived with them and shared expenses, including the mortgage.
Did they enjoy retirement? They never complained. But they also did next to nothing—no travel, no entertainment except playing cards every Saturday night with my aunt and uncle. My father died at age 78 from emphysema and heart disease, the result of years of heavy smoking. My mother died 17 years later, at age 87, her body riddled with cancer that she never mentioned to anyone, including a doctor, until we forcibly took her for treatment when she could no longer stand the pain. Despite my request, a doctor told her she had cancer. She died the next day.
During my career, I spent many years helping retired employees with their retiree benefits. I also received hundreds of letters from retirees begging for a cost-of-living adjustment to their pension. Those letters had an impact on me.
My views on saving and retirement income are clearly influenced by my parents and by my experiences.
In the years immediately before I retired, I had no target retirement date and certainly no notion of retiring before age 65. I didn’t plan to travel or relocate or even downsize. But I did think about income. Frankly, based on the stories I’d heard from our company’s retirees and the unions who represented them, I think I was afraid of not having sufficient income for the rest of my and Connie’s life. That may have been illogical, given that I have a pension which—when combined with our Social Security—is equal to my job’s base salary. But it doesn’t seem illogical to me, not even today after 14 years in retirement.
I didn’t want anything to change after I retired, and I certainly didn’t want our financial situation to force me to make changes. I often read that, upon retirement, living expenses decline because there’s no longer a mortgage, commuting costs or any need to save for retirement. But while that’s clearly the situation with others, it wasn’t our situation: We were already used to living without a mortgage payment and I had no commuting costs because I had a company car.
What about saving for retirement? Because I knew I’d have a pension, there was no need to save huge sums every year for retirement. I saved 10% of my pay in the 401(k), though the percentage was lower during the 10 years we were paying our four children’s college costs.
There’s no doubt that, absent my pension, our lifestyle before and after retirement would have been very different. That makes it hard for me to understand how others manage to retire in their 50s on savings alone. Because of my pension, we never had to save like that, so we were used to living on a bigger percentage of my salary.
Moreover, the 10% going into the 401(k) was easily offset with our retirement’s increased discretionary spending, mostly on travel. In retirement, our annual health insurance premiums have also increased many times over, so today they cost the two of us $16,515 a year. Meanwhile, inflation has eroded the buying power of my pension. Indeed, inflation alone makes me wonder about the long-term viability of a very early retirement.
I was recently told I need such a high retirement income because I had to maintain our “sumptuously rich,” “luxurious” lifestyle. I acknowledge nearly everything about me isn’t typical for my age, including income, net worth and my views on many things. But we don’t live lavishly. In New Jersey, where we live, many teachers have a six-figure income.
I do want to maintain the lifestyle from my working years. I don’t want to be in the position of cutting back out of necessity. I make no apology for having the resources and desire to help my children when they hit a financial bump, temporary or otherwise.
Some people are super-savers during their working years, including many HumbleDollar readers. That makes a lower income in retirement less of a shock, but it’s hardly typical of the broader population. As of 2023, the U.S. personal savings rate was 4.5%.
I can’t buy into the ability to save 30% to 50% of income. Retiring in your 50s is outside my reality. Even with a pension, retiring before I did at age 67 wasn’t possible for me—not with four children to raise, put through college and pay for their weddings.
According to the Bureau of Labor Statistics, as reported by Yahoo Finance, the average income of someone 65 and older in 2021 was $55,335, while average expenses were $52,141. To me, this suggests little financial flexibility during retirement, especially for those without a mortgage-free home. In fact, I find it a bit scary.
Everyone has different priorities. For some people, maybe spending will decrease in retirement, there will be no major financial emergencies, inflation will be modest, the quiet life is just right, and being able to retire early is worth the sacrifices involved.
I’m just not that person.
Richard Quinn blogs at QuinnsCommentary.net. Before retiring in 2010, Dick was a compensation and benefits executive. Follow him on X @QuinnsComments and check out his earlier articles.
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