As you can well imagine, the idea of “retirement” did not exist in Roman times, nor medieval times, and certainly not when Pilgrims discovered America. What about during the days of Lewis & Clark? Or when the wild West was being settled? History teaches us that a Roman peasant had to fight for food every day of their life. A peasant could not even fathom taking life easy, sitting back to watch the evening news, or going out to eat and taking in a movie. How could an English Lord even conceive of “retiring?” He had to manage a kingdom and train new knights to protect him and his vassal serfs.
Some examples of newly created words, along with the idea of “retirement” in the last 100 years include:
- World wide web
- Light bulb
- Contact lens
We have seen so many advances in technology and medical care in the last century that we have a lot more time on our hands than anyone born before the turn of the last century. That extension of life plus all that time we have available has been the reason the idea of retirement even exists. “Retirement” is a new concept, only around since just before World War II broke out. Up until 1920, most people died before they reached the age of 60, so retirement wasn’t even an option. When people started to live past age 65, some elderly folks started to save money for when they could no longer work, and thus the concept of retirement was born.
Four problems came along with this new concept. The first problem is outliving your income. Today 92 percent of everyone who is retired is totally dependent upon their Social Security benefit.
A second huge problem is inflation. Just use your Web browser to see what one gallon of milk cost 20 years ago and you will be shocked. You will most likely need to double the money you think is needed at retirement, because of inflation.
A third problem is continual taxation. As you take money from you retirement savings plan to live, this income is taxed and can cause Social Security benefits to be subject to income tax as well.
A fourth gigantic problem is the cost of medical, long-term care and nursing home expenses. The national average shows costs for a retired couple for medical/nursing care is $250,000 before they die. This kind of cost is eating up all possible savings most people manage to squirrel away for retirement. When all resources have been exhausted, the surviving spouse becomes destitute and is classified as being on welfare.
Considering these four problems, now is the time to decide what “retirement” means to you and whether you will be able to make that vision a reality. You have heard about the importance of planning for retirement your entire life, while those who lived before 1920 did not even have an inclination of what that meant. Before it’s too late, define what you want to happen when you reach age 65 because unlike your grandpa and great grandpa you will likely live longer than 60 years, so you will need to be prepared for that long life and how you want to live it. It’s never too late to get going on this. Go to moneymastery.com and sign up for the Basic online training package and see for yourself how much money you need to be saving for retirement, or calculate how long your money will last. For more help, contact me directly: firstname.lastname@example.org.