Are You Part of the Great Retirement Rethink?

Bloomberg today published yet another article on the sad state of retirement affairs for many baby boomers. The point of the article is that things have changed for our retirement – and they are not going back. The author characterizes this as “the great retirement rethink.”

Let’s summarize the hard truth, in case we have forgotten or neglected to think about it recently:

• The S&P has lost an annualized 0.4 percent since 2000.  How pathetic this is compared with an average annual gain of 9.7 percent for the previous years going back to 1926.  If I hear Dave Ramsey tell a listener to buy a “good growth stock mutual fund” one more time, I might hit the radio with a hammer.
• Interest rates on savings and CDs are so low that savers are being punished almost as badly as individual stock investors  speculators. (Did you own Netflix?)
• A mere 23 percent of working Americans say they are “very confident” they will have enough money to cover basic living expenses in retirement, compared with 42 percent who said that last year. (This is why I’m on my own Failsafe Retirement System.)
• Today’s episodes of market volatility have undermined the rule of thumb that retirees may withdraw up to 4 percent of their nest eggs each year. If they want the certainty of never outliving their money, a lower withdrawal rate may be needed.

Extending your working life for five years beyond what you’d planned could add $10,000 to your annual income in retirement.

I’m less affected by the concept of a retirement “rethink” than some others. The reason is that before the economic collapse of 2008, I had not selected or targeted a certain retirement age or date. I still haven’t. Therefore, the idea that I might have to “work longer” was not very concrete to me.

Don’t get me wrong – I want Mrs. P and I to be financially prepared when I feel the time has come to stop working entirely. I just don’t know today when that will be, because I am quite content with my redesigned working life. A lot of other boomers do not have that contentment. I know that I am fortunate in that way.

I do have a goal of delaying Social Security benefits until age 70. That will affect my planning and may be considered a partial “rethink.”

So do you consider yourself to be part of the “great retirement rethink?”

Here is a link to the full article: The Great Retirement Rethink.

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