Too Much Debt Early In Life Means Too Few Choices Later In Life ... That's No Fun

We know more about life as we get older. Of course, when we were younger, we didn't believe that.

That's the difference between youth and experience. It has nothing to do with intellect or common sense. It's all about persepctive gained from personal experience.

When we become indebted unnecessarily early in life, it has the tendency to make us less financially secure as we approach and enter retirement.

Similarly, we don't value education as much early in life as we do when we later look back to many of those decisions made and actions taken during our youth.

So where is this trip down nostalgia lane leading? Simply to ask my fellow oldsters to offer to help our youth learn the things that perhaps we didn't learn but now wish that we had much earlier in life. And by the way, to also acknowledge and accept the fact that the youth you're trying to help very well may elect not to take the opportunity to benefit "vicariously" from the lessons offered by us oldsters. But to my fellow oldsters, I believe that we should try anyway. We'll feel better for having done so.

Americans Rip Up Retirement Plans describes what happens when not enough savings and too much spending early in life affects our later in life choices:

"The American workplace is about to get grayer.

Nearly two-thirds of Americans between the ages of 45 and 60 say they plan to delay retirement, according to a report to be released Friday by the Conference Board. That was a steep jump from just two years earlier, when the group found that 42% of respondents expected to put off retirement.

The increase was driven by the financial losses, layoffs and income stagnation sustained during the last few years of recession and recovery . . . .




The labor force has been getting older for decades for reasons that range from longer life spans and better health to companies' replacement of defined-benefit pensions with higher-risk 401(k) plans.

But the stark increase in workers expecting to stay on the job—now 62%—was a surprise. . . . After all, the stock market has largely earned back its losses, home prices are rising, and the unemployment rate is creeping down, all of which suggests workers should be feeling more secure.

Many middle-aged Americans, though, drew down their savings during those lean years and now find that leaving the work force on their original timeline is no longer viable . . . .

 

They are also facing low interest rates, an uncertain future for Social Security, and a lower likelihood of receiving employer health insurance after retirement....

However, senior employees can be expensive for companies, both in salary and health-care costs.

In addition, amid anemic economic growth, these workers may block the pipeline for younger employees trying to advance their careers.

In the long run, that concern is misplaced, said Kevin Cahill, an economist at the Sloan Center on Aging and Work at Boston College.

"Keeping older Americans in the work force is a good thing," he said. "Those workers have more financial security, employers have a larger labor pool to draw from, and we have more people to produce goods and services. There may be bumps like the recent contraction in the labor market, but we need to look beyond the short term."

Ultimately, many workers will still retire on schedule, Mr. Levanon added. Research shows that intentions don't necessarily align with reality, and people often end up retiring as they had expected because of health reasons, job losses or simply a miscalculation of their own desires."

Summing Up

There are many good reasons to work later if life if that's our choice. But we should take steps during our working years to make the decision to work beyond our normal retirement date just that --- our choice.

In other words, having the option of not working because we have saved and invested continuously throughout our working career is always a good idea. Thus, it's up to us.

If we've saved and invested properly, upon becoming an oldster we can either work or not work and enjoy doing whatever we choose to do with our 'oldster' time.

Simply stated, the best plan is to give ourselves lots of choices at retirement time.

So save and invest early and continuously, and then feel free to do whatever you choose to do when finishing up the 4th quarter in the game of life.

Because the first three quarters will end much quicker than you think they will.

Thanks. Bob.