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The retirement experts

Jonathon Clements reports that "Experts offer all kinds of advice. Mostly it's ignored." [WSJ 6-20-07] I know how you feel, Mr. Clements! I give such excellent advice, yet everyone is hell bent on making their own mistakes!

Actually, we did pretty much what he suggests the experts tell you to do in planning retirement, except the one about saving diligently from a young age. All experts agree on that one. We didn't save a dime toward retirement until our kids were gone from home. But since I was 46, that gave me some time before retirement. He suggests three things experts advise that most workers ignore (I didn't, but I also didn't know they agree on these three).

1) Rereading an old 1999 letter to my children I refreshed my memory that I had notified both my OSUL and Prior Health Library bosses that I would retire in the fall of 2000--about a year in advance. (I don't think that's such a great idea, but you can squirrel a date away in your head. You are a lame duck from that time forward if you let your employer know.)

2) From 1986, when I went back to work full time, through 2000 I put the maximum allowed in my 403-b tax shelter, and fortunately, when I took out my retirement money after leaving to have a family, I had tucked it away with interest so I could buy back my retirement time (it would not have grown if left in the system because I wasn't vested).

3) When my stocks began faltering in 2000 (before Bush, BTW, if that economic myth is important to you), I changed my investment mix, from aggressive to low risk/moderate risk. Apparently the experts suggest retirees need to do this, but it was really instinctive for this lily-livered investor.

However, I could have never guessed ahead of time how expensive retirement would be--actually I'm still surprised. Our "retirement condo" is bigger than the house we lived in for 34 years. Need a bathroom? I've got one where I hang our winter clothes in the shower stall. Travel? For years we went nowhere; now we get 10 brochures a week from travel companies.

I thought our second home on Lake Erie, purchased in 1988 and paid for since 1998, would be a nest egg because home values absolutely soared in Lakeside--moreso than in Columbus. Of course, we all know what's been happening in the real estate market, especially vacation home areas.

I couldn't have imagined what would happen to the cost of health care. My pension plan spent like crazy in the 90s on real estate and fancy offices for its employees, and then had to do some serious cut backs on health benefits for retirees in the 21st century. For some reason, those boomer staff people had never heard of a bust and were way overinvested in high tech. And we're healthy!

And cable. Our cable bill is higher than our gasoline bill for 2 cars--and we lived for the first 26 years of our marriage perfectly happy with 3 broadcast and 1 public channel, and no computer broadband. In order to get our phone service deal and a digital box, we just added about 50 new channels. More ways to sleep in front of the TV.

And taxes! OMG! Was I stupid to think that once we were on pensions the government wouldn't want so much of our money? Apparently. Do you know if every American had to write a check to the government each April instead of having taxes sneakily withheld by their employer, we'd have a tax revolution immediately? We pay quarterly, and even that is a huge reminder of how our government mismanages our money just because we aren't paying attention.

Clements says the most important rule to remember is save diligently. Everyone agrees on that.