If you visualize yourself playing pickle ball in the shade of the palm trees and sharing cocktails in the moonlight on the beach with beautiful new friends, better rethink the picture. The TV ads don’t tell you that the retiree group has a 100% rate of death, disability and serious disease.
To a great degree successful retirement requires a good bit of planning, research and an equal amount of luck. The economic planning almost requires a PhD. Plan for an eight percent inflation rate and a diminution of your stock market investments by another thirty percent. Take a look at your income tax return and try to maintain as much of it as possible in retirement. Invest for income not growth. Don’t expect the government to stop inflation and save the stock market. The Ivy League economists at the Federal Reserve are going to keep raising the prime interest rate, trying to cure the disease while the patient dies. Chairman Powell, Princeton’75, with a JD from Georgetown, has already jacked up the prime rate from 3.25% to 6.25% without results and keeps up a negative flow of predictions to ensure that we all suffer pain. I don’t think that’s smart. I’m not happy about seeing 30% of my hard-earned after-tax savings disappear in a stock market spiral within six months with nothing for it. Where do the professors of economics think the average American has his or her retirement savings? It’s time to stop punishing the wrong people. The alternate tax on personal income over 5 million annually should be at least 20% with no deductions.
After all, our economics is a history of inflation, isn’t it? In 1935 gasoline was 19 cents a gallon. It’s up almost 2000%. What about the 3-cent stamp? It’s now 60 cents or up 2000 %. Have you ever heard of the minimum wage going down? It was 40 cents an hour when I was young, but I could buy a light lunch for an hour’s pay. That might apply to today’s $7.25. During the Second World War the government enforced price controls and there was an excess profits tax. What are they waiting for?
In my opinion inflation stems in great part from greed. The producers test to see how far they can go, and they pass any increase in their costs to the consumer.
Don’t just jump into retirement. Think about a gradual transition. Stay at work longer. Work part time. Get involved in activities, hobbies, volunteering, political campaigns, club and residential committees, educational courses. Write your own memoirs. What about sports like golf, tennis, pickle ball? Become a mentor to young people.
Don’t forget to maintain full medical coverage including prescription and long-term care. There’s a formula for deciding to be self-insured for long term care. You have to be wealthy to self-insure.
Also never forget that you have a partner to look after. Every adviser and consultant will try to sell you an investment plan and insurance. That’s how they earn a living. Don’t cancel your life insurance or your partner’s. Plan to live much longer than the longevity tables provide. Watch out for politicians who call Social Security and Medicare “entitlements and government give aways” and want to extinguish them.
That’s it for now. I’m retired and It’s time for my nap. ~ Lewis