Retirement delayed and broke anyway

[Wonder Why]

79. I understand your pain. I didn't have it because I was financially astute when my company

dropped its pension plan in the late '80s. There are advantages to 401Ks/IRAs over pensions to the extent that you don't lose anything if you go from company to company to move up the ladder rather than stay with a company that doesn't value you. But we look back at our ancestors and saw the good of pensions, never realizing that they could end and so never considered how we would handle it.

Financial planning is never really taught in schools - not to the level that one needs to manage investments. That's for sure.

My wife and I married when I was a poorly paid serviceman so we learned to live on less as our parents did, hers and mine. So we lived on what we had. Shortly after we married, she asked me if I minded if she did no work. I agreed but it was her decision. When I left the service and my income jumped dramatically, we continued to live at a much lower level than we could have with the income I was making. I saw many making much less than I living to and beyond their means. Instead we saved so when the pension ended and it went to a 401K, we maxed out my contributions. Moreover, I knew to invest at that age aggressively, but safely in growing but reliable funds with no following trends. Sure I missed out on the dotcom bubble but was not hurt on the burst. Same in 2008. Then a few years ago, I lost 20% but stayed the course and got it back.

We always paid cash for cars and held them until they got too old which allowed us to save for the next one.

She didn't have enough FICA credits to get SS so I bugged her to work just enough to qualify. When she turned 62, she took her $200/month and saved it. When I turned 662, 2 years later, she started taking her (now higher) spousal SS. We still live mostly on social security because we paid off the house 15 years ago in cash and still live modestly.

One son is like I am and he and his wife live modestly, maxing out their retirement funds. The other struck it rich, sold his company and he and his wife live off the money but spend it all but not more than he earns on investments.

The three biggest problems for which people are ill prepared are, first, thinking far ahead when young - deciding whether to enjoy life now or have enough later with too little education/acuity on how to do it. Secondly, as they approach or are in retirement with a lump sum in their retirement funds, how to use it properly so it lasts if they do and they enjoy it while they do if the don't live as long as they hoped. Third, how to pay for fast rising medical costs as their health deteriorates. Hard to make those kind of decisions when you have never been educated on it, encouraged to think about it, and the future is one big unknown.

Lastly, for women who may go in an out of the business world with the huge disadvantage of sexism in pay and opportunity, and who get married and are dependent on their husbands for the financial lifeline, a huge fourth problem of a broken marriage or a financially unfair one can ruin everything. I promised my wife I would always share everything with her if we ever parted and she would get everything if I died. Now, after 51 years of marriage, it is not an issue to us.

We have been very lucky in love but I do empathize with those without the financial education/acuity. So many things could have turned out different for us but they did not.