The Simple Math: Hey, Baby Boomer, How Much Money Will You Need When You Retire?
Monday, January 28, 2013 at 1pmBy John Friedman
Many of us baby boomers are lucky enough to have parents in their 80s and 90s.
Many of those folks retired when they were in their 60s, which means that many of them have had 30-year-plus retirements. During this time many of those folks have had the pleasure, brought to them by some good ol’ pension plan that came into their life when they were far younger, of receiving monthly checks equal to some portion — say, four-fifths — of the amount of their monthly salaries at the end of their careers. That, plus Social Security to fill in that one-fifth gap, has stood them in very good stead indeed. And then there was also a stock market and a real estate market that absolutely cranked out wealth during most of their lives. And all of those things had the nice quality of, over time, handily outpacing the inflation background.
So, baby boomer, how’s ’bout you? How’s that same thing looking for you?
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Here’s a simple way to think about it.
It’s the Least I Could Do — A Meditation on Aging Parents
Friday, January 11, 2013 at 11amBy John Friedman
As many of you know, I am fortunate at the family level in that everyone in my immediate family is still married to the first person they married — something which is not all that common, eh?
In my parents’ case, that means they’ve been married to each other for 64 — and a half — years. Think of it: that’s eight separate eight-year chunks, one after the other, each of which is a great couple’y accomplishment unto itself — and a half. It’s also the same amount of time involved in raising four sixteen-year-olds from start to finish, newborn to teenager, end-to-end — and a half. It’s also the age that Paul McCartney thought was very old. My folks have been married that long — and a half.
That also means that my parents are both in their late 80s. Us kids — their kids — can only hope that we got as lucky a jump into the gene pool as these two did, because both of them have had long, healthy, happy lives.
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Ah, but age does take its toll, doesn’t it?
For some years now everyone in my family has been learning a new way to hear the word decline, as that’s how long my father’s health has been in decline and, lately, in accelerating decline at that.
Everything that swirls around that decline has been some of the hardest stuff our family has ever experienced. For my dad, the hard part is being cognizant of, and living within the body and the mind that is experiencing, that decline. For the rest of us it’s been about helping him negotiate the various challenges he faces, whether it’s negotiating the simple physical world (he’s nowhere near as spry as he once was) or negotiating the truly horrendous medical and long-term-care bag-o’-bones systems (or should I say collection of parts?) all of us have built in this lovely and wonderful country of ours. We did build that.
But it’s also been a wonderful experience at the family level, as we all conspire together to make the best of every situation, each with our own way of accomplishing, each with our own strengths and weaknesses, gently adding it all together as we journey along this oh-so-difficult path that oh-so-many have traveled before and that oh-so-many will travel in the days ahead.
Through it all I’ve never had more profound, more intense, more of-the-essence interactions with the members of my family, whether that’s the all-kids-on-deck, cross-nation group phone calls we do many weekends, or the quiet late-night phone calls with just my mom and me, or the worker-bee-laden visits with my dad when he is being cared for elsewhere and there are folks, everywhere, giving care to the elders and to the infirm. I’ve never been so proud of my family unit.
And as all of it takes up more time and energy, I’ve come to know that one phrase is more apropos in this context than in any other:
It’s the least I could do.
And that’s true even when I’m givin’ it everything I’ve got — givin’ it my all.
Our parents raised us. Most would’ve died for us. Literally. And most probably still would.
So we help them in any way we can as they reach their later years and then into their later, later years and then on to their decline. It’s an imperative, not a choice; it’s built into us, all the way down at our DNA.
As best I can tell, this is also true for families less Cleaver-esque than the very Cleaver-esque Friedman Family of which I speak, so that, even for those of us whose parents were rotten parents and/or even for those of us who don’t share DNA with our parents and/or even for those of us who’ve grown apart from our parents, it seems like there is still some somethin’-somethin’ that mostly compels most of us most of the time, when we’re called, to hop-to and be of service to those who helped clear the path for us as we made our respective ways through our younger years.
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One of the amazing things about my parents’ generation — the folks who were kids during The Great Depression — is that they’ve had a terrifically wonderful, and in some ways quite jarring, later-life surprise, in that those who are still with us have all lived about a decade or two longer than any of them in their right minds had a right to expect when they were young!
Think of it: when they mocked up a good long life way back then, what they saw was a life lasting into their 70s or, if they were aiming high and had family members who had blazed that trail, maybe into their 80s. But what they got instead were lives lasting longer, on well into their 80s and 90s and even into their 100s.
The odds are that my generation, the Baby Boomer generation — yup, that’s the one I’m t – t – t – t – talking ’bout — will not be similarly surprised — we will not find ourselves having to re-calibrate our idea of long-life as something involving numbers like eleventy-one or twelvety-two (thank you, J.R.R. Tolkien, for the idea that 111 is best thought of as eleventy-one, an idea which I up-and-ran-with all the way to 122). And I’ll even take that further and go out on a limb here (not to worry: as I get older, I hold on more and more carefully to handrails, so as not to fall) by predicting that that’s just not gonna happen . . .
Instead, the Baby Boomer generation’s lot in the life-expectancy lottery is to have the relatively recent living-into-our-80s/90s/100s possibility bundled-in with the demise of pension plans and the rise of the hating-it-ever-since-the-first-day-it-opened-up-for-business despising-lobby, consisting of folks who have it in for government-run Social Security and Medicare — a potentially wicked combination, that, especially given that the despising-lobby is very, very good at swaying others to share their positions.
And so, same as it ever was, it will be our kids’ lot in their mid-lives to help us as we negotiate a new-found set of pros and cons that await us, part and parcel of our living to a wonderful, hopefully-old age, whatever number of years that might be for us and for our particular cases.
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All of which is to say: blogging will be light for a while. I’ve got family stuff to do.
The First Week of January Test, 2013 Version
Monday, January 7, 2013 at 11amBy John Friedman
So how does it feel?
How does it feel to be back in the saddle after the holidays?
You can think of the way in which this first Monday of the working year hits you as being akin to what happens at the Large Haldron Collider when particles racing close to the speed of light do their colliding and stop moving quite so fast and on quite so straight-ahead a trajectory.
That is, if you’re like many folks, then after running around and around and around, working hard hard hard throughout all of 2012, then somewhere around Friday 12/21/12 you found yourself having some time to relax at least a bit (hopefully . . . ) and were maybe even able to settle into a leisurely couple-a weeks of being with loved ones and doing only fun things (which very well might have included spending money more easily and in greater quantity than at any other time of year, and maybe even some generalized lolling about). And then WHAM! It’s Monday 1/7/13 and now you’re back in the saddle.
Fast-moving particle collides with non-moving object.
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I’ve been asking the questions that open up this piece for years now, right around this time of year, as part of a thought exercise I call The First Week of January Test (to see previous year postings about The Test, please see this nice clean search results page, with only hockey players and Meg Whitman, surely a loutish and scary coupling if ever there was, currently cluttering up the search results with false positives).
So why? Why do I ask these questions, and why now?
I do so because asking these questions is the best way I’ve found to help people gauge their non-numeric financial heath — because at no other time of the year is there a so perfectly-jarring and highly-illuminating boundary event as the day when, after the long holiday season, you come back into your normal day-to-day, whether that’s at work or driving the kids around or playing golf or watching soap operas or doing good or doing bad or cruising the ocean aboard a luxury liner or convalescing inside a skilled nursing facility or whatever other thing your day-to-day might be, and because your day-to-day has a whole lot to do with both your numeric and your non-numeric financial health, with the one informing the other, two-sides-of-the-same-coin like (and not a trillion-dollar platinum coin, either).
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So how does it feel? How does it feel to be back?
Your assignment, if you choose to accept it, is to write down a paragraph or two or more about what you are feeling right now. Name that file with the date and do this every first week of January for the rest of your life. Read the series from time to time. Is it getting better all the time? That is the goal.
And look for a follow-up piece in the days ahead, in which I’ll further lay out the case for non-numeric financial health, and set out, at long last, the definition of non-numeric financial health I’ve been working on for years and years and years and years.
Hint: all things being equal, the more silky smooth your haldron-colliding event this week, the stronger your non-numeric financial health. Please stay tuned.
About 500 words (less than a five-minute read, sans linked-to content)
The Tax Sunsets (Mostly) Sunset
Thursday, January 3, 2013 at 3pmBy John Friedman
We can, I suspect, all agree that taxes impact behavior.
To see that this is so, one need only look to Vancouver, Washington, a Portland suburb adjacent to the Oregon/Washington border, where many Vancouverites go out of their way to do most of their shopping across the river in Portland, Oregon, where there is no sales tax, but live and work in Vancouver, Washington, where there is no income tax and where property tax rates are low.
And clearly our federal income tax system is chock full of provisions intended to impact behavior, whether it’s the mortgage interest deduction designed to help people afford home purchases, or the R&D tax credit designed to incentivize businesses to invest in research and development, or the tax break for many government-issued IOUs — muni bonds and the like — which help various public entities raise funds more cheaply than otherwise would be the case.
And how about the tax-goading our very own Internal Revenue Code exerts on many of us to do good? Ari Fleischer, George W. Bush’s former press secretary, said earlier this week that, with the new, higher income tax rates for high earners, coupled with some other twists and turns in the inner workings of the new income tax laws, he would surely give less to charity because the tax benefit just wasn’t there the way it had been.
And the list goes on and on and on and on.
So our tax system impacts behavior: we see how the system works and learn about how it can provide us with some somewhat-free free lunch, and then we act and plan accordingly.
For taxes to impact behavior in a way that really takes hold, though, the tax system must offer up some predictability. If the system changes frequently, or, worse yet, if the system has built into it changes that are designed to be short-lived, its impact on behavior will be muted or even discombobulating. After all, how can you plan within a system that is a zany bouncing ball of contradiction that’s hard to follow, let alone predict?
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Re: Guns and Gun Accidents, Johnny Cash Sings “I Hung My Head”
Sunday, December 23, 2012 at 2pmBy John Friedman
Johnny Cash, in his later years, made some truly wonderful albums, tastefully aided by producer wunderkind Rick Rubin.
My fave is American IV: The Man Comes Around, in which you can delight in hearing Cash sing, for instance, First Time Ever I Saw Your Face (could there be a voice more different than Roberta Flack's?) and In My Life (Cash was well aware when he recorded this album that he was not long for this mortal plane, and you can hear that knowledge in his every creak and moan as he sings the lyric, Some are dead and some are living . . . in my life, I've loved them all). Also in there you can listen to some of the most raw, laid-bare, essence of pain you'll ever hear, via Cash's rendition of Trent Raznor's Hurt (see the official video if you want to see what I mean, and yes, Raznor is indeed the voice of Nine Inch Nails).
Was there ever a voice that better missed the notes? And were there ever happier accidents of pitch and nuance?
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The song I most look forward to hearing every time I put on American IV, though, is I Hung My Head, a song penned by, of all people, Sting.
It's a beautiful, simple song, with a succinct, memorable melody, telling the story of a young man in the olden days of the West who goes out for a lazy ride one day with his brother's rifle in hand.
The first two verses tell the main story:
Early one morning
With time to kill
I borrowed Jebb's rifle
And sat on a hill
I saw a lone rider
Crossing the plain
I drew a bead on him
To practice my aimMy brother's rifle
Went off in my hand
A shot rang out
Across the land
The horse, he kept running
The rider was dead
I hung my head
I hung my head
The song goes on with six more verses, as, ultimately, this simple gun accident leads Jebbs' brother — the un-named and unfortunate narrator of the song — to the gallows, where Sting the writer and Cash the singer say much by way of the song's refrain referring repeatedly to two very different kinds of head-hanging, similar to their double-entendre'ing of the phrase time to kill in the opening verse:
I prayed for god's mercy
For soon I'd be dead
I hung my head
I hung my head
Here's a video, made by someone or other, showing the lyrics against a simple black background as the song plays in full.
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For obvious reasons, we as a nation are having a great big chaotic conversation right now about guns.
Cash's I Hung My Head is, I believe, as good a way as any to highlight what fast-moving projectiles can do once they leave their respective barrels and head out on their way, seeking their final resting places, regardless of what gets in their way before they find that resting place, and regardless of the intention of any living creature, young or old, stupid or smart, able or embicilic, aware or clueless, in front of or in back of any gun barrel, or above it or below it or to any side of it.
Like water running downhill . . .