By Neil Patrick
We all know the way our careers were supposed to go. Roughly speaking.
We’d get a bunch of qualifications, start work, change employers maybe four or five times, work hard, get promoted and then at around 50 or so have a comfortable cruise towards our retirement at 65. Then we’d be able to relax and enjoy the next 20 or so years.
We’ll that’s all gone now for most of us.
I’m sorry to say that it doesn't make much difference what your employer or financial advisor recommends. If you are a baby boomer in the US, UK and much of the EU, unless you’ve been so successful (or lucky) in your career that you are sitting on a very large pension fund, this version of our life story is a fairy tale.
You probably know this.
In the US, some 82 percent of workers aged 50 and older say it is at least “somewhat likely” they will work for pay in retirement, according to a poll released in October by the Associated Press-NORC Center for Public Affairs Research at the University of Chicago. Almost half of boomers polled now expect to retire later than they previously thought - on average nearly three years later than what they thought at age 40.
And this is just the tip of the iceberg. People have a habit of being unduly optimistic when thinking about their financial position if it’s much beyond the next year or so. It’s a combination of hope and difficulty in facing up to harsh realities.
Some of the other statistics emerging in the US are really horrific.
One in 6 reported having less than $1,000 in retirement savings and 1 in 4 working respondents aren’t saving for retirement outside of Social Security. Some 12 percent of non-retired people reported borrowing from a 401(k) or other retirement plan in the past year. Though 29 percent reported at least $100,000 in savings, some find even that’s not enough.
“All too often, people have a lump-sum illusion. They think, ‘I have $100,000 in my 401(k),’ and they think, ‘I’m rich,’” “said Olivia Mitchell, a retirement specialist who teaches at the University of Pennsylvania.“But it doesn’t add up to much. It certainly is not going to keep them in champagne and truffles.”
Make no mistake this isn’t a blip, or a phase. It’s a demolition of the life expectations of a generation.
One in 6 reported having less than $1,000 in retirement savings and 1 in 4 working respondents aren’t saving for retirement outside of Social Security. Some 12 percent of non-retired people reported borrowing from a 401(k) or other retirement plan in the past year. Though 29 percent reported at least $100,000 in savings, some find even that’s not enough.
“All too often, people have a lump-sum illusion. They think, ‘I have $100,000 in my 401(k),’ and they think, ‘I’m rich,’” “said Olivia Mitchell, a retirement specialist who teaches at the University of Pennsylvania.“But it doesn’t add up to much. It certainly is not going to keep them in champagne and truffles.”
Make no mistake this isn’t a blip, or a phase. It’s a demolition of the life expectations of a generation.
You can go searching for people to blame if you like. There are plenty who must carry at least a portion of the guilt. Personally, I think it’s more important to invest our energies in something more productive and positive.
Like working out what to do about this.
The good news is that humans are much more resilient and adaptable than we sometimes give ourselves credit for.
And when we are confronted with difficulties, we often respond in much more creative ways than we expect.
I have a friend who is 60. Two or three years ago he was on the face of it, doing well in his career in sales. He was the Sales Director for a booming manufacturing business. And much of that success was down to his drive and natural flair at finding clients and keeping them coming back for more. He’d be in his office every morning from about 7am, then from about 10am would be hunting down new clients and working on developing relationships with the current clients.
He was very, very good at his job. And the business was growing largely due to his abilities to win new orders and contracts. But I knew a different side. I knew that he was locked in a war with his boss. There was a huge power and personality fight going on. And this was steadily sapping my friend’s motivation and strength.
His stress levels were through the roof.
In the end he became ill. Very ill. He developed diabetes. He lost weight. He looked like a shadow of the man he used to be.
But he did the most sensible thing he could. He quit his job.
For a while he looked around for other jobs. But at 60, you guessed it, there was no-one interested in hiring him into the sort of job he just left. Especially since he’d quit at it.
Fast forward to today. I had a beer with my friend a couple of weeks ago. He looked strong and fit. He had recovered the twinkle in his eye and the infectious grin that he always used to have. He was happy and healthy again.
He hadn’t been hired into a new job. He’d created his own.
He was always great at DIY. And he loves doing it. He’s simply taken his hobby and turned it into his job. And by doing great work and looking after his customers better than almost any tradesman I ever met, he has far more work stacked up than he can actually do.
He's happier than he’s been for years. He has a job he loves and the customers are queuing up round the block.
Is he worried about his pension and retirement?
I doubt it, I really do.
He was always great at DIY. And he loves doing it. He’s simply taken his hobby and turned it into his job. And by doing great work and looking after his customers better than almost any tradesman I ever met, he has far more work stacked up than he can actually do.
He's happier than he’s been for years. He has a job he loves and the customers are queuing up round the block.
Is he worried about his pension and retirement?
I doubt it, I really do.
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