The Big Retirement Crisis


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A while ago I ran across yet another reference to people being afraid to retire with only $1 million in savings.  And part of me knows that there’s a lot of fear out there of getting old and having no long term care options.  But another part of me is like, “Oh, come on now!  Does everyone need $1 million to retire?”  Part of our big retirement crisis is that many people don’t have any savings, and these guys are afraid a cool million isn’t enough?

Retirement crisis is upon us

Yes, many people have not saved anything for retirement.  Many others have saved “not enough.”  I am one of those, though I beat the average with only one income in a poorly-paid job.

Back in the 1970s and 1980s industries were looking for money and figured out how to raid pension funds.  About this time someone came up with defined contribution plans, such as IRAs, 401(k) and 403(b) plans.  So the raiders cleaned out the pensions in the name of “reform” and those of us who could started IRAs and such.  Or not.

Goodbye pensions

Anyhow, pensions pretty much went away.  And we had these things we didn’t know how to operate.  But business loved it because it lowered their costs and got us dumped like newborn puppies into the big world of finance, with about as much understanding.  We were no longer their problem.  We were a source of new money, even in small amounts.

All the while the rich got richer and the rest of us stagnated again, like in the 1970s.  Every time the market crashed, our investments lost value.  Those of us who freaked and pulled out at the bottom, which is the natural, human thing to do, made those losses permanent.  Some of us just left things alone and they came back.  Our scraped-up little dollars slowly gained in value and “being part of the market” was billed as a Wonderful Thing.

The Great Recession

The Great Recession, though, did the biggest number on us.  Early Boomers lost their retirement savings around the time they needed them.  The rest of us lost out on raises for the next ten years while the economy helped itself to higher prices.  Some places that gave matches to defined-contribution savers quit during the Recession, and we scraped along with no help.

Even after the Great Recession, many of us didn’t get raises unless we had cute hostages, like the teachers.  And even then they had to raise holy hell to get them.  At least they had pensions.  Meanwhile, insurance premiums, coinsurance, and copays ate us up, whether we got our insurance from jobs or elsewhere.

Any big surprise we didn’t just put away 10% or more of our incomes for retirement?

Shaming from the Street

Ever notice where all the shaming and nagging about the retirement crisis comes from?  The media that works Wall Street is a big source.  Here’s where you keep getting told you have to save millions because you shouldn’t count on Social Security.  That’s right.  Social Security, the law of the land, is not going to be around to keep you alive.

Except that it will be around.  It just won’t be worth anything unless Congress puts on long pants and does something, and a president signs it.  As long as they don’t reform it to make us invest our Social Security taxes too, it should be OK.  We’ve already screwed up our not-a-pensions on our own.

Seems that the business world and its media are not interested in taking care of a bunch of poor folks and they’re trying to scare us all about not being millionaires.  Otherwise we might be a drag on the economy as we get older and need more and have less.  They seem to be suffering more from the retirement crisis than we are.

How many legs on your stool?

Financial press tells us we have a three-legged support plan for retirement.  Supposedly we have Social Security, a pension, and savings.

No.  Most of us don’t have pensions.  We’re already wobbly.  And those that haven’t been able to save are falling over.  Those are the people who never had much and now are in line for food handouts.  Because Social Security “was never meant to support you.”  Then why was it created?

Life after retirement crisis

Before flipping out, at least check this out to see how long you might have to live.  It’s illuminating.

I am about to retire with a fraction of that Mandatory Million.  I also have a house in a dying region, but it is worth something.  Moreover I expect someday to be unable to take care of it.  So it’s an asset too.

It’s worth noting here that if I had $1 million to retire on I might not live to use it, and have nobody to leave it to except my husband if he outlives me.  So possibly what I have will be OK.  I have figured out I can make it last for about 20 years and then will be eating the house, so to speak.

Being all burnt out from working with humans, I plan to take it easy and just do some gentle downsizing for a while, see how things are running.  Then maybe I’ll take on some kind of side hustle to get some money in while I still can.  My best friend loves people so she works in a jewelry store part time, playing in the diamonds.  But she’s going to quit in a few years and move away.  We’re downsizing together.

When money starts running low, if I am still alive, I will probably start applying to HUD subsidized places to live.  By then there will probably not be a car to support either.  But the HUD apartments draw the elder buses and social services connections.  I’ll always know where to go to get food handouts.

And yes, I’ve been paying forward in taxes all my working life so it’s not outrageous of me to take a turn getting help if I need to.

Then if I am still around long enough to get really dotty or ill, there’s Medicaid.  Or not.  I fully expect to die someday regardless.  Maybe I’ll find a suitable federal crime to commit so I can get care in prison.  Hey, that could work.

Really bad crises

The really bad crises that might make retirees going broke not a Big Deal include real financial ruin for the government, global climate change, pole reversal and failure of Earth’s magnetic field, World War III, Yellowstone erupting, and asteroid strikes.  Not to mention the ever-possible End of Days.

So you see, there are ways to get through life without $1 million in savings.  And there are no guarantees.  We plan for what we know and it may not be there in 20-30 years.  But then, maybe we won’t be, either.

So my plan is to work on my wool supply and quilting fabrics since I have a lot.  And I’ll keep it up till it’s no longer interesting.   My life has not been that predictable so far and I’ve done OK.  I do have a plan of sorts that will get me 20 years or so.  And if that’s not enough, I’ll figure out what to do closer to then, when I know the conditions.

Do you have $1 million or more?  Congratulations.  Don’t have that?  What ideas do you have to get by?  Comments please!



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