Maybe retirement should be a right, like high-speed internet that is written into the constitution in Finland (Thanks for that bit of info, AP!), but it simply isn’t.
Just the other day I was talking to my sister and trying to coax her into saving a little for retirement.
Her response (typical of my generation I think), was: Why worry about it? It’s 40 years off.
I laid out the scenarios for her about saving $10,000 this year and how much it’d be in 40 years, and she finally agreed to fund her retirement just a little.
Granted, before getting into learning how to manage my money and all this PF stuff I’m writing about now, retirement, debt and savings never even crossed my mind until I got my first job out of college.
Isn’t it funny? (Or maybe sad? :P)
It made me think about the reasons why we don’t think about the future, even when we know it’s “good” for us to do so:
- The “future” is based on the concept of time, invented by humans
- Saving for the future is also an abstract concept that requires understanding what “retirement” means*
- Actually, 40 years is a long ways away
- We think we have enough time to save before we get to that point
- We want to enjoy our money and live while we’re young and healthy
- We just don’t think about it (denial?)
*Retirement to me, means that as I get old, crochety, tired and less agile, I won’t be forced to go to work to pay for my food, shelter and clothing. I’d go to work because I’d want to.
(A shopkeeper napping in Macau)
RETIREMENT IS NOT A “GIVEN” RIGHT
If we don’t have money to retire, we cannot retire.
If we haven’t saved enough to pay for the years when we don’t work, we cannot retire.
Retirement is not something that happens magically overnight once you hit the age of 65. You aren’t handed a golden key on your 65th birthday and told to go play golf until the sun goes down.
I think this idea of retirement not being a “given” if you don’t plan in advance, is something that’s difficult for a lot of us to imagine.
I thought (in college years), that once I hit 65, I’d retire and life would be golden.
HOW I would get there, was a whole other story altogether. I didn’t even think about saving for retirement.
I just assumed the money would eventually, somehow.. magically.. appear once I hit 65, and I wouldn’t have to worry about it because “other people” (fictional characters) were worrying about it for me and I didn’t have to.
Doesn’t that sound utterly stupid?
But it’s what I thought. I just assumed there would be money at 65, eventually.
RETIREMENT USED TO BE KILLER PENSION PLANS
Remember the good ol’ days everyone likes to talk about?
The days when you stayed at a company for 40 years after starting your career with them?
The days when they’d pay for your pension for as long as you or your spouse would live, because it was written into your employment agreement?
These days, instead of an employer looking out for your interests and planning for your future as their precious worker when you hit 65, you are expected to plan for your own future.
Or the government would take care of you… but as we’re starting to realize, the government is running out of money because there’s an influx of retirees on the market and not enough young’uns to pay taxes to cover them!!
RETIREMENT PROBABLY USED TO BE CHEAPER
I feel like it wasn’t as expensive in the past, because there wasn’t too much you needed or wanted because you didn’t even know it was possible or it didn’t exist.
Today, we have TVs to “educate” us about what lives are like, vacations all over the world, fancy restaurants of all types of cuisine and so much entertainment accessible to us that it’s hard to choose or say “No” to anything.
In the past, I feel like no one felt entitled or the urge to travel the world once they retired because it wasn’t something that crossed their minds.
No one felt like they needed to vacation in Florida for 6 months of the year during winter, or golf all day long at fancy clubs.
People just sat at home and lived out their lives simply without realizing there was “more” out there. ‘More’ is not necessarily better, either.
Perhaps they were just farmers, like BF’s grandparents, who just wanted to sit at home, eat a little cheese and bread, make their own wine and play with their grandchildren.
RETIREMENT = SAVING IN ADVANCE
Retirement to me is saving for double the years of my life.
People are living a lot longer these days. Instead of dying 10-15 years after they turn 60, they are now living well into their 80s and 90s due to the miracle of modern medicine.
This means that if I start working at 25, and I retire at 65, I have 40 working years in total.
However, if I live until the age of 90, I have to pre-save so I can pre-pay for 25 years of retirement! This is all after inflation, to boot.
So retirement? It’s simply saving in advance so you don’t have to be forced to be a Wal-Mart greeter at the age of 65 because you didn’t plan for it.