In August 2015, I was one of about 10,000 Americans that retired that day.* For me 42 years of work, 37 of these in academia was good enough. I had done what I enjoyed. Academics are like salespeople. We try hard to sell our students on the idea that reading the class materials and preparing for exams is a good thing for them. Many resist us to the end. We try to sell our colleagues on the brilliance of our ideas on curriculum and other matters in countless committee meetings but winning over a bunch of Ph.Ds, each with his/her grand idea, is like trying to herd wild boars. For years, I kept my rejected memos as evidence of my futility. And we try hard to sell our research papers to journal editors but the referees aren’t always in a buying mood. I published a lot but I also had to lick my chops and nourish my challenged intellect after each rejection.
And then, came the retirement parties. The three retirement events thrown by my colleagues made me nervous. I was not sure whether they were celebrating my career or the fact I was not going to be in their hair anymore. When the speeches of praise and appreciation were over, I told them they had done a great job holding back all this admiration for so many years. Where were they when my ego needed the comfort of approval? And what’s with the decorative clocks or watches they give you upon retirement? Really? We need to keep time lest we missed some important meeting while we are in retirement? Unless they are given to remind us that time is not on our side and we should expedite whatever we plan to do. Clocks and watches should be banned as retirement gifts.
But I was not off the hook yet. Shortly before retirement I had committed myself to co-authoring a book in investment banking, a project I had put off many years. It took my first two years of retirement to finish it – many days cursing myself for signing the publishing contract. But when it was done and published, I felt a sense of deliverance. The thought of an unfinished project would no longer haunt me.
After finishing the book, off I was to my next bucket list item. That was the blog. I summoned the help of a former colleague who is good at this sort of thing. He is a special person. He is a pancreatic cancer survivor who, lucky to have escaped demise, went on to write a little book about his experience and will to live and then set up a blog Survivingcancerembracinglife.com to tell others that Living Well While Surviving Cancer is very much possible. I hasten to add the usual disclaimer that any bother the blog might be to some of you it is my sole responsibility not his.
Preparing yourself psychologically to accept the end of your professional life and planning ahead your retirement is important but it eludes many. Some people are pushed to early retirement after losing their jobs. Others retire because they hate their jobs. And others go without much reflection on what comes next. It’s sad to hear people say “I don’t know what I ‘ll do when I retire.”
A meaningful or otherwise happy retirement is, however, predicated on having the means to live with some basic comfort and dignity. Things are not quite rosy. Even in the US, a very rich country, retirees face grave financial insecurity. Reliance on Social Security, Medicare and Medicaid is not enough to provide for a comfortable retirement. In the US, the Social Security fund is reaching the point that it will have to dip into its accumulated capital to pay retirement checks, meaning income on capital and new contributions are not enough to pay the bills.
In 2018, the average Social Security pension was $1,413 per month. In many places in the US this sum is not enough to cover the basic budget of a retiree. What about other individual savings for retirement? The news is worse. The average savings of Americans 60+ years of age is $172,000. Experts estimate that one needs a nest egg of $1 million to replace 70% of the average annual salary Americans make during their working years. But again, averages hind the dire reality for many Americans of or close to retirement age. One third of these Americans are estimated to have saved only up to $25,000 for retirement. Some have nothing.
Things are not any better around the world. Early retirement age while people live longer, inadequate contributions to pension funds coupled with actuarially generous pension packages, and shrinking working age populations have kept pensions down or pose risks to the future retirement benefits for everyone.
Some experts blame the lack of financial literacy in large segments of the population for the inadequate savings. Thus, they recommend financial literacy classes in high school and college. My credit union, NEFCU and other financial institutions offer savings and retirement seminars to help people plan for their retirement years. But a research paper has concluded that financial literacy lessons are not effective unless taken at the time a person has to make a related decision. How possible is such timeliness in teaching financial literacy?
Basic financial literacy can help but not if personal responsibility is lax. There are a lot of middle-class people who could save more but don’t do it because they cannot putt off instant gratification. Consumerism is too much embedded in America and other societies and it unfortunately corrupts saving habits. What we need to teach people is the difference between needs and wants. Unless we manage our wants better no amount of current income will be enough to build a secure retirement. As St. Augustin said: “Rich is not a person of great wealth but a person of few wants; and poor is not a person of little wealth but a person of many wants.
Eight centuries before St. Augustin, Socrates addressing Kallikles who advocated unrestrained giving to pleasures retorted: “Compare the soul of such a person to a sieve, because this kind of soul cannot hold anything and thus can never be full with a finite and limited amount of things.” (From the dialogue Gorgias)
Preparing for retirement must start many years back. It can be fun and it can be a struggle. And I haven’t said anything about health issues. But let’s leave it at that.
* This is an estimate based on the number of people reaching retirement age each day in the US.
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