Retiring is everyone’s end goal. That’s why everyone is saving their money, investing in stocks, or putting more into their 401k right now. Sure, you’ve heard you need to do this in order to retire but what happens when you don’t? Or have tried to save and invest but life got in the way? Half of my aging neighbors have already retired, while the other half are just a few years away. And this is what I’m seeing…
I have my neighbor Ernie; who’s been renting a small back house for the last 25 years, owns three slightly older cars, and has been working for Papa John for as long as I can remember. I heard he retired a few months ago so I went over to congratulate him and that’s when I was shocked to hear that although he retired, he still has to go to work 3 days a week in order to make ends meet.
I was clearly confused so he continued to tell me, that out of his retirement, social security, and all other income, he receives roughly $900 a month. That amount barely covers his rent. That means no vacations, which is what I thought you were supposed to do in retirement. Ernie has no children and no close family members, so he’s on his own. In theory, he could live off of rice and beans for the rest of his life but that could be another 20 years.
My other neighbor Theo had been retired for some time. He owned his house for a few years and his mortgage payment was close to $5,000 a month. He has a wife with a good job, three daughters in school, and doing well. I thought since he owned his house, he’d be in a better situation. Theo ended up having too many expenses. He’s a relatively healthy person for someone in their 60’s but he said he pays close to $1000 dollars on health insurance for him and his wife.
He recently had to put his house on the market and rent an apartment to reduce his expenses, while still going into work part-time. So retirement isn’t going too well for him either. He’s even had to pay penalty fees for working too much in his retirement. Yes, I couldn’t believe it either. I should also note that the first neighbor, Ernie doesn’t have any sort of health insurance in case something goes wrong. It looks like you either live with no insurance or you pay an arm and a leg to have it.
The last neighbor I am going to talk about is John. Now, he is a little different. He hasn’t retired yet but is a few years from retirement age. He has no savings and doesn’t know what the stock market is. He’s been renting his whole life and hasn’t done his taxes for the last 40 years because he’s paid cash from his employers or odd jobs. Getting paid cash and not filing your taxes means you don’t gather points in the social security system. In a few years, John will have nothing to fall back on and will have to continue working.
John does have a daughter and wife that could probably help him once he can’t work anymore. But now it’s the daughter’s job to financially support her father and most likely her mother when they age. That’s a lot of pressure and responsibility for her. I’d like to think that’s how a lot of families are, the parents end up relying on the children or family to help them once they age, or perhaps it wasn’t planned this way but that’s how it ends up being.
I have yet to meet anyone who can happily retire. I live in a pretty good neighborhood, the houses look nice, the streets are clean, and the people are friendly. So how does retirement work? I’m still in my 20’s and I always imagined that by the time you are 60, you don’t have to work anymore! You should be able to go to Hawaii, travel, or just hang out outside gardening if that’s what makes you happy.
Clocking into work when there is no end in sight is what’s scary. If you are reading this at a young age or any age, start planning! Start doing something that generates income other than your 9 to 5 so that you aren’t in any of these situations. As you can tell Ernie, Theo and John are all in different scenarios; one invested into a house, one invested a little into his retirement, and the other did nothing. They all ended at the same finish line, still having to work.
Maybe there is no such thing as retirement and it's just a grand picture that people like to tell you in order to make you feel like you are working towards something. Perhaps people have the mentality to live life while they can and not plan for the future. I’d like to think otherwise.
I am currently working hard so that this does not become a problem when I am ready to retire. Very few people are actually retiring but there are so many people out there showing you how to be financially free so that you can retire. Heck, you can save money while you can and when you are ready to retire, move to Mexico. I have yet to see one of my neighbors do that so maybe that’s the secret key.
When you age, you should be able to eat at a nice restaurant every once in a while, take vacations and enjoy your golden years. Good luck out there!
