Thursday, April 03, 2008

Why I worry about the Boomers

God bless 'em, are they ready? Ready for retirement? That story this week in the WSJ was really outrageous. Jennifer Levitz opened with a story of a 59 year old who is "postponing" his retirement. Then she moves to a liberal economist who says what is happening today hasn't happened since the Great Depression. Oh really? That was before my time, but I did hear a few stories from my parents, and grandparents, and it's insulting to their memory and struggles to be whining like this. According to the article, their homes are worth less (than when, a year ago?) and their stocks are worth less (than last quarter?) so that makes it worse than the Great Depression. With all the information available in books and on the internet, do these people never look at charts?

She also wrote about Ellen Minter, 57, who had a 6 figure income before retiring--she probably made more in a year than I did in a decade. She and hubby sold their San Francisco home and bought real estate in California wine country; he retired and then their portfolio started to collapse. He's looking for work again. Why, unless you are a boomer for whom the waters have always parted, would you think the good times would always roll? If they were willing to cut back I'm guessing they could still make it, but high living is addictive--isn't it?

I retired at age 60, but I wouldn't have even considered it if a very unusual thing hadn't happened. My mother-in-law died. Now, she was in her 80s and had been in poor health at least 20 years, so that part wasn't a huge surprise. She had outlived her husband (who wasn't ill) who had retired (actually was pushed out) and moved his pension into a privately controlled account, so she got it all at a time when the stock market was on its way up. Shortly before she died, it was on its way down again, and we were going to start dipping into her principle to pay for her nursing home care. Her three children shared her estate equally, which included the primary residence and some property in Florida. Never in a million years would we have expected a dime from my husband's parents. We invested the money and I decided the income plus my pension just about matched my income if I continued to work. Now, obviously, we'd have a lot more if I'd continued working and banking that, but for what? What if I'd died or became ill at 64? Who wants to die at the reference desk answering questions about Cushings Disease in dogs or cryptorchid horses? Time is money, and I'm a millionaire if minutes count.

In 1999 and 2000, while I was still working, my 403b had three bad, bad quarters, and had really flattened after a very nice run up in the 90s. There was a technology bubble that burst. From 2001-2007, I had three bad quarters. Probably the biggest run up in history. But what did we hear from the media and the Democrats? We were told we were in the worst economy since the Great Depression. We may actually be on the cusp of a recession, and why shouldn't we? Smart people and dumb people both made bad choices on real estate investing.

But the boomers have a lot of years left to live in retirement. I hope they breathe deeply and put away a little for a rainy, down down day, because there will be more. They will further be hurt if they elect a Democrat who promises to raise taxes, tries to destroy businesses and jobs with global warming scares, and won't make us energy independent.

1 comment:

ChupieandJ'smama said...

Very good Norma! My husband and I know a few Boomers that are on the verge of retirement and for some reason they think when you retire you become rich. They are buying second homes, and selling modest houses for $500,000 houses. They never had these things while working but the commercials on TV tell them that "they are owe'd this". That commercial with Dennis Hopper telling them not to settle but to keep going and do more cracks me up.
I think the Boomers have a false sense of what retirement should be. Yes, they are more active than our grandparents were and that's great. But you still have to live within your means.