Not planning on retirement is OK
The economic crisis is ruining retirement plans for some people. But commentator Tim Eavenson thinks he'll be OK if he never retires, and he will happily exchange retirement funds for other benefits.
Tim Eavenson (Tim Eavenson)
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Links
- Current Employment
Tim Eavenson writes about labor law at Current Employment.
TEXT OF COMMENTARY
Kai Ryssdal: It's early yet to know exactly what the collective loss of wealth is going to mean for us all. But some things are going to have to change, retirements among them. Some people are going to have to stop working later than they'd planned or, perhaps, not retire at all. Commentator Tim Eavenson says he'd be OK with that.
Tim Eavenson: I'm fairly convinced that retirement is a scant possibility for me, but that's not so bad. At age 28, I am fully prepared to work until my dying day. I can't afford to contribute to a 401(k) because I don't have any income left over at the end of the month. I have approximately zero in savings and $200,000 in student loan debt. I do believe that Social Security's going to last a while, but not until I am 75, or 85, or whatever they change the retirement age to by the middle of the 21st century.
Honestly, what I'm hoping for right now -- my best-case scenario -- is that I can make a little more down the road, and pay off my loans before my kids turn 18 so I can get them through college, and sock enough away to become a part-time counsel somewhere when I'm older.
I'm not bitter. Honestly, the concept of retirement seems a little selfish to me. I mean, expecting to retire is a luxury just a few generations old -- it's not exactly the entitlement people like to call it. I would happily give it up in exchange for some other benefits. For example, I would love it if the government could somehow fold Social Security money, if there is any, into funding for single-payer health care. I'd work until my hands fell off if I knew my son could go to the doctor and we wouldn't have to file for bankruptcy.
Plus, if I didn't have to think about affordable health insurance, I'd have more freedom in choosing where to work, instead of my plan now, which is to get into the biggest corporate mega-firm possible so I can insure my family for under $1,000 a month.
I mean, money is meant to be used to make us happy anyway, right? Why would I want to wait until I was in my 70's to be happy? If I ever have enough money to put away, I think I'd put it to use. I'd rather feel the pride of watching my kids graduate, knowing they won't be saddled with the debt that I had. Or take vacations with my wife in our youth. Or actually pay off a mortgage. You know, crazy stuff like that.
Kai Ryssdal: Tim Eavenson is an attorney in Chicago, Ill. He writes about labor law when he's not lamenting retirement.
Comments
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From Tinley Park, IL, 09/21/2009
Wow, what a niave and idiotic mindset. I used to think educated people were more likely to make smart financial decsions being one myself. Recent economic events have shown this to be an erroneous assumption however. Mr. Eavenson is typical of the liberal, Obama-loving young professionals who have helped to run this country of course and have no concept of financially responsible behavior. Mr. Eavenson shows his ignorance when he says he wishes the government could fole the socail secuirty money(if there is any) into funding single payer health care. You sir are an idiot.
There is money in social secuirty to fully fund curent entitlements for those in there mid 50's and up, and even after that 75% of full benefits are funded for younger benficiaries. If the govt. sells the bonds it is holding in trust for social secuirty, the program will be fully funded until around 2037, so yes Timmy there is a Santa Claus. This money is allocated to social security, not helthcare, so no despite your brilliant plan we cannot fund socialist healthcare through social security. I would think an attorney would have more common sense and better research skills.
From Highland Park, IL, 01/14/2009
I agree with the author.As a 21 year old trying to pay for college without loans,its a mathematical given that if you're in the hole by $100,000 to a bank in non-dischargeable debt saving any money will be nigh-impossible.I wouldn't be surprised if his monthly 200K student loan payment is more than the car or rent note-and you can't skip that bill.
Since you must take more schooling to earn the degree that pays more,its an increasing function.Bottom line is,my generation's retirement funds are spent on college tuition.
I commend the author on seeing the financial reality of his situation,and that he is still determined to live his life as he sees regardless.Too many of my peers owe 2 BMW's worth in debt and still think they're going to retire with no plan and no clue.
And I'm desparately trying to keep my $7000 in student loans from growing any larger.
Its intriguing how the wealthiest nation taxes its youngest and brightest with a life sentence of debt.Its not a feeling that the boomers can understand if they haven't attended university recently.
From Highland Park, IL, 01/14/2009
I agree with the author.As a 21 year old trying to pay for college without loans,its a mathematical given that if you're in the hole by $100,000 to a bank in non-dischargeable debt saving any money will be nigh-impossible.I wouldn't be surprised if his monthly 200K student loan payment is more than the car or rent note-and you can't skip that bill.
Since you must take more schooling to earn the degree that pays more,its an increasing function.Bottom line is,my generation's retirement funds are spent on college tuition.
I commend the author on seeing the financial reality of his situation,and that he is still determined to live his life as he sees regardless.Too many of my peers owe 2 BMW's worth in debt and still think they're going to retire with no plan and no clue.
And I'm desparately trying to keep my $7000 in student loans from growing any larger.
Its intriguing how the wealthiest nation taxes its youngest and brightest with a life sentence of debt.Its not a feeling that the boomers can understand if they haven't attended university recently.
From GA, 01/05/2009
It is this man's thinking why we as a society are in the debt we are in on a personal basis. I prefer to save and invest my money...why? I dont like wasting my money on stuff I will eventually sell at a garage sale for pennies on the dollar and/or have to carry around until I die. I've been doing/thinking like this since age 22 and now have more money at 26 then most people 20 years my senior. Remember every dollar you make you have a choice, save/invest or spend. The choice is yours, just like your life.
From Garfield, WA, 12/31/2008
I am very dissapointed in Marketplace for running this story. If a 28 year old lawyer can't save for retirement, what hope do the rest of us ever have? Marketplace should be encouraging young Americans to save for retirment in all markets. I don't think Social Insecurity will be their for us Gen Xers. Maybe it will pay for food or your rent. Not a pleasure to retire on.
I think, with a budget most can save for the future. It is hard to believe he doesn't have any saving on his lawyers salery. I would guess he needs to live within his means, as we all should. I would reccomend he read Dave Ramsey's books or better yet listen to his radio broadcasts. Here are the basics,
*$1,000 to start an Emergency Fund
*Pay off all debt using the Debt Snowball
*3 to 6 months of expenses in savings
*Invest 15% of household income into Roth IRAs and pre-tax retirement
*College funding for children
*Pay off home early
*Build wealth and give!
*Invest in mutual funds and real estate
If normal middle class people can follow this plan I know a lawyer could follow this plan and plan his life and live with intent.
From Deadwood, OR, 12/31/2008
It seem a bit odd to ask a 28 year old about retirement plans. At 28 I didn't really comprehend retirement. I'd only recently made it off welfare. However, by the time I was 30 I started planning. I stuck with things I understood and could control myself. It has worked out pretty well and would work again for people in that age range. Buy rental housing where the rents will make the mortgage payments and manage the properties yourself. It is a 2nd part time job, but not too bad if you stick to safe neighborhoods. If you start at 35, the 30 year mortgage will be paid off by the time you hit 65. I figured that values would track inflation and the rents from 6 paid-for units would cover us in retirement. I never got on the cash out re-fi wagon. Even in the go-go times, I worked toward having everything paid for.
We've had a wrench thrown in our plans with my husband's layoff at 58, but the mortgages are now quite small so we will muddle through somehow.
From madison, WI, 12/30/2008
listening while driving home for family practice- where patients are working in factories 10-12hr per day, 6-7d a week
if they can't put up with it- therefore
50yr or older management doesn't care
overuse injuries- sooo- this young man
is nice but not in factory world- he is lucky
From Brick, NJ, 12/30/2008
I believe many of you have lost sight of what Tim is saying here. many are projecting what i can only assume is their own set of difficulties onto his long term plan, and *of course* that wont work. If he worked in a coal mine it *would* be silly to suggest he could work there till he died of old age (of course he'd probably never reach "old age" working in a coal mine but thats aside the point). Tim has chosen a profession that is likely he can sustain well after he becomes physically frail. and while it is true that line of work is not open to everyone, the person working a minimum wage job didn't pay $200,000 to do so. Ms. Sterns seems to be embittered by watching her own retirement disappear, that is something that both Tim and i (age 26) would rather avoid seeing. she claims that our inexperience with cancer, arthritis and the like make us "too young for this topic." but i propose that perhaps she is too old for this topic. the perils brought on by the "entitlement generation" are the torture stake my generation must bear. personally i think it is a noble and honorable thing to have committed ones self lifelong to their profession. i can recall both a personal Doctor and a Plumber who worked well into their late 80's. the Doctor had plenty of wealth to retire on if he so desired, but he LOVED what he did. he HELPED others and did not selfishly deny my family his decades of experience by retiring. the plumber was not a rich man but he was not destitute and had more vitality than most people in their 60s. oh, and heres the point, both of them were happy! i don't feel i can speak for Tim, but for my part, its not in me to reap what i did not sow, and i don't think that i am paying for the work of previous generations be cleaning up their mess, not by paying them to sit on their laurels because by some twisted sense of entitlement they somehow 'deserve' it. before Social Security people worked till they died or till they could work no longer, and then their family took care of them, thats true social security. i will work till i die or my family must care for me and i have confidence that my family will want to take care of me because i'm not chasing retirement, i'm chasing a happy family.
From TX, 12/30/2008
"My first reaction is to confirm something I have noticed in my ten years in Washington, DC, that the current college-aged generation has borrowed a lot to finance their very expensive higher education..."
This is the crux if you ask me. After racking up 77K in student debt, I advise every young adult I meet to take a full time position doing ANYTHING for a major corporation full time. Let them offer health insurance and pay for your education. I did it the stupid way by working part time with no benefits and making ends meet with crap pay and student loans. I used to joke that I had decided to buy an education instead of a house, a bit more relevant for Tim.
And as for SS, anyone our age (I'm 30) ought to know that we are paying for our grandparent's medicaid today, not our future safety net. In my family, retirement means you physically can't work anymore, so I can understand why some people misunderstood what Tim was getting at. I have also met boomers that were able to put away the recommended million or two - although I wonder how they are doing now. But I have to agree, I have and will continue to take lesser paying jobs if they offer better benefits. Although, I have made room to contribute 1% to the 401k. And really Tim, I proimise, you won't miss that little bit. Let your company match you, let it build up on its own, it even decreases your taxes. If you don't you are just throwing away the only free money in the country.
From Chicago, IL, 12/30/2008
In response to some of the earlier posted comments, I do not find Tim Eavenson's opinions to be naive or too early formed. Why should we leave an older generation of workers to speculate about the state of retirement in 40 years? Rather people entering the work force in their 20's and 30's should be contemplating the future-- their future-- of retirement and health care.
12/30/2008
Interesting comments by Mr. Eavenson and commenters.
My first reaction is to confirm something I have noticed in my ten years in Washington, DC, that the current college-aged generation has borrowed a lot to finance their very expensive higher education. This is a major trend, what will the impacts be? Is this trend occuring just in the USA is it the same in other societies or generations? What have been the imopascts? Also, who is making money on this arrangement?
But his comments speak to the larger issue of the inter-generational equity. During this period of change, it will be interesting to see how (or if) we can reform the expectations of each generation. And how we navigate the fairness issue, and allow for a better understanding of our legacies on the future workers. As a non-baby boomer, I like the concept of making sure that each generation pays for their own legacies!
From Orlando, FL, 12/30/2008
Your "best-case scenario? -- is that you can make a little more down the road, and pay off your loans before your kids turn 18 so you can get them through college?"
Amazing! The fact that you rack up 200K in debt before even starting your career tells me you don't understand how that debt is robbing your future. Considering the probable cost of a home along with other costs of lifestyle choices, it appears you'll have more going out than coming in for many years; the very anthema to achieving wealth and financial security.
If you currently can't save for your retirement because of your lifestyle and debt, you're not going to be able help your kids through college, because you have to start their education saving now.
Though parents can help with their childrens' education, their primary responsibility is to plan for themselves in order to not be a burden, in their old age, to their children.
I recommend that you meet with a financial planner and get your priorities and plans in order before any of your many assumptions go awry.
From Chicago, IL, 12/30/2008
You are absolutely right that I have luxuries because of my career choice (an office job, the possibility of part-time status later) and that there are so many people for whom working indefinitely is physically not an option. What I said was strictly limited to my own circumstances, and I’d hate for anyone to think I was preaching to them that they shouldn’t plan on retiring.
My point was not even that I don’t want to retire – it was only that after focusing on some other things (paying off debt and getting kids through college), I’m not sure if retirement will be an option for me, and I’m okay with that. But I would never begrudge anyone else – especially someone doing back-breaking or labor-intensive work – their ability to retire.
From Amherst, MA, 12/30/2008
You said, "At age 28, I am fully prepared to work until my dying day." Let's hear what you say after you've worked for 30 or 40 or more years--but not at a lawyer's salary; try it at minimum wage or even at a middle class salary. Try it after the privatizing of retirement savings plans and then watching what you have invested in your IRA or 401K plan for 20+ years disappear because the private companies got "irresponsible." Or try it after you have paid into a state retirement fund for years and then legislation lowers or cuts your benefits. You may not be so willing to dismiss retirement then. Try it when you have survived cancer and its treatments while still having to work and then being unable to retire or cut back on work without losing health insurance. Try working until you die with hands gnarled by arthritis, hips and knees in need of replacement, poor memory, failing eyesight, hearing loss, or any of the other aspects of aging that make working harder or put you risk of mandatory retirement and job loss. You are too young for this topic.
From Big Rapids, MI, 12/30/2008
@Robert Clark: comment guidelines include the warning: "Personal attacks, profanity and general harassing attitudes will not be tolerated." I hope the moderator pulls your message.
@Tim: Thanks, I don't believe in retirement myself or the entitlement mentality that is often in conjunction with it. I do think it is wise to prepare for whatever may come up in the future, however, as you say, there are many reasons to put the money to good use now. It would be a shame to horde our earnings and later self indulge for a decade or more while our children struggle to pay their bills and our neighbors miss house payments.
From Lowell, MI, 12/30/2008
Mr. Eavenson, I am sorry you have such a doom lookout for your retirement. At the age of 28, you still have many years to put together some type of retirement plan. Although you have some good thoughts about health care, I want to bring out a point of which I disagree.
• We live in a society in which we pay way to much attendion to a diploma and not the education. Although I firmly believe in a good education, I do not think a diploma is the everything. Getting a college that takes 20 years to payoff or lands you a $8.00 per hour job, does not seem to be something of a good choice. I see too many people, both young and old adults get a degree and still have no common sense or passion for what they do in life. Find your PASSION.
When I first read your article, I laughed at the thought of paying $200,000 for an education that landed me a job that would take me 18-20 years to pay off, wow. I would try and get a refund.
Back to your comment, if you start laying out a good BUDGET, you will be able to to put together a retirement plan. I can give you one piece of FREE advice. A book by David Ramsey, current cost $20.00. When you are done with the book, give it to your Dean.
From Peru, IL, 12/29/2008
Tim, I can guarantee you that you have no idea about what you are talking about. Wanting to work and being able to, are two very different things. You seem to think that your body and mind are going to stay the same, and that you will have the choices you have now. As you pass through the decades ahead, the understanding will be made clearer and clearer. And as you pass the 60 bench mark, think back to when you wrote this, and I am certain that you will just have to shake your head and admit, you know he was right, I had no clue…
From Dallas, TX, 12/29/2008
At age 28 I can imagine Mr. Evenston wasn't exactly the ideal candidate to talk about what the loss of retirement really means.
I think it's a very naive perspective.
From Atlanta, GA, 12/29/2008
Too late I realized that, because I am an artist, there IS no retirement. Have you ever heard of any artist who
did retire - before he died? But what I wouldn't give to know I could see a
doctor about my arthritis and not have to worry about sticker shock. Forget
retirement: I can keep painting and writing. But please give me reasonably affordable medical care.
From Plainfield, VT, 12/29/2008
While Mr. Eavenson may have the luxury of a middle lass office job, I will not be able to preform my job until the day I die due to the heat, heavy lifting and 11 hour days of artisan baking. His ignorance of the fact that there are people who work with their bodies to produce the goods that everyone uses is outrageous. shame on him for undermining this workers safety net. If the world he is contemplating should come to be I for one hope that my limbs will hold out, and that death comes swiftly.
From Norwich, CT, 12/29/2008
I couldn't agree with you more. Thank you for this commentary. I'm 29, though single, but I completely understand and agree with everything you're saying. I would rather enjoy my life now in my youth and my daughter's youth than in the last decade or two (if I'm lucky) before I die.
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