Thursday, December 13, 2012
Best laid retirement plans
I was talking with a buddy of mine a couple days ago. He mentioned that after he put 31 years into the company, they are doing away with the old retirement plan. The defined benefit plan will be replaced with a 401. Those investment plans can be fine -if you are young and the market is booming. For someone nearing retirement age, in this economy, not so good.
At least he's still working and might get something at retirement age. Lots of good jobs have gone away. The retirement dreams are quickly replaced by day to day survival nightmares.
My dad lives in a Florida retirement park. It's not one of the high end ones, but it's nice. There are indoor and outdoor pools, fishing ponds, game rooms, pool tables, and recreation centers. Sure, it's a trailer park, but the lots are good size and tree shaded. Most of the people there are from what was the middle class. Defined benefit retirement plans were a lot more common for his generation.
It should come as no surprise that in a place full of old people there's a lot of turn over. Even in a nice warm climate, no one lives forever. Places in the park were in demand, so trailers didn't sit empty long. Until now that is. Say a 90 year old person passes on. There aren't as many 65 year old people who can afford to retire in the style of their parents. Often when a place is sold, it's bought by an older person who's still working.
There's a whole economy based on retired people with time and a few dollars to spend. It's a smaller economy now.
So what's a person to do? A growing number of people are looking at self reliant survival skills as part of their retirement plan. Better to invest in solar electric panels on the roof than pension plans that won't pay out. They are planting fruit and nut trees, learning to garden, and cooking from basic ingredients. My buddy has been practicing and developing survival skills for years. He never dreamed he'd need them for a comfortable retirement.
Another friend of mine was downsized from a good middle management job. He went from a house to a trailer in a park. Later, he sold the trailer and bought a second hand RV for $3500 and traveled around in that for a while. As he and his wife got older and more infirm, they sold the RV and moved to a family farm house in Vermont shared with three extended families. Between a little outside income and what they raised on the farm, everyone got by. My friend ended his days broke, but surrounded by family and friends. It could be worse.