Thinking Unconstrained

Examining the world with a critical eye. Topics span a wide range including but not limited to, observations, insights, problems, solutions, proposals, and hypothetical scenarios.
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By Sybilla
"All the world's a stage, and all the men and women merely players; They have their exits and their entrances, And one man in his time plays many parts, His acts being seven ages." - So sayeth Will of Stratford in his play, "As you like it". How quickly does old-age consume man, and he a brittle creature of dust and ash succumb to its inevitable curtain's close. We mortals of fortitude in fragility begin as precious babes alight in a hopeful world, and nearing the final act, wish upon all who'd care to listen for a joyous and a fulfilling end. And so, retirement is celebrated; Not as a reason to never have to work again, but as an opening of the next chapter of one's life, to be lived in a new final role before Death's scythe reaps her harvest.

We in the western society have been brought up to expect that retirement is a reward filled with peace and tranquility - the "golden years" are meant to be spent doing things of little import and let the younger generations take up the burdens of the world. Not everyone sees it this way of course, but it is the general sentiment held by many to some degree or another. The "golden years" require "gold", also known as "funding" to make those grey years sparkle. And where does that gold come from? Shouldn't a lifetime of work and accumulated wealth be enjoyed in one's August years? Isn't it primarily one's own responsibility to ensure one's own golden retirement? Yes, but not quite...

What was once a thing that began as a charity overseen by governing bodies, a humanitarian effort to look after the elderly who had no kin or financial support, was morphed into this new golden form after the second world war. The concept of the "golden years" was an advertisement drive by the private retirement communities in the 1950's US to attract real estate investments from those who wanted to live away from their families in elderly people's villages. It was not a necessity but rather a luxury option for the wealthy retirees. The poorer ones or those needing special assistance were kept in nursing homes, either funded by their own savings or supported by their family members. Those retirees in the old-folks homes never saw the "golden years" but made the best of their "grey years" and perhaps were able to afford their "silver years".

In the ensuing decades, the process of funding retirement accounts took several shapes. Publicly funded pools were recognized to be far less than adequate to keep pace with inflation and hence many would-be retirees were encouraged to supplement them with private investments. For many of those working for large reputable companies, their retirements were already partially funded by them. But by the time the mass manufacturing off-shoring effort was in full force in the 1980's US, most company sponsored retirement accounts were replaced by private tax-deferred retirement funds. Companies were no longer morally obligated by society or as an interest in curbing labor attrition rates to continue funding them. But even tax-offset accounts were apparently not enough to pay for retirement. Later on in the 1990's, special funds were allowed to "invest" on the open market without incurring tax dues, with the caveat that the money in the accounts must not be withdrawn until retirement. So the question is, how much does one need to scrounge and save in order to have a "golden", "silver", or any retirement?

While we may be inclined to think that a pension is a necessity, the system that is in place appears to be increasingly inadequate to deliver on its promises. It used to be that the mantra was effectively, "Eat bread now, so you can enjoy cake later". It then morphed into, "You might as well eat cake now, since the best you can hope for later is bread". What we may soon be facing will be, "Eat crumbs now, and you may have crumbs later if you're lucky with your portfolio". Is there any possibility we can have our cake and eat it too? Or is there no more cake left for those who are late to the party?
A retirement account allows you to contribute your money to the fund management institution, where its agents then trade on the open market in the hope of getting a good return on the investment, and if all goes well, get a slice of the pie in the process for a job well done. This sounds straight forward and it's a win-win situation for everyone. But there's another way of looking at the situation; One that views the arrangement stripped of its noble sounding intentions and the glitter of an altruistic facade. One might venture to say that you give your salary to a professional gambler working for a government-backed, too big to fail, lords of moneydom, so that they can enrich themselves with your money and then give you back the crumbs, as promised in your severely limited portfolio arrangement. Does that sounds accurate? Does it ring true? Or must we ignore such accusations and continue to prop up the system because we're all in this ship together, and it can only work if we all believe in it?

Everyone wants a comfortable retirement, and financial stability certainly helps to guarantee it. So you diligently contribute your salary into tax deferred accounts and hope to have it grow at a steady rate, and you ride out those troublesome economic downturns because surely it always goes back up again, right? Of course! Believe in the "market forces" and infinite growth of money and you'll be fine. Convince your friends to contribute more and the young to be smart and start early. Look at all the people who did so and are living the good life now. You too can be one of those fortunate geriatrics in 40 years! Support your future, support yourself. Give us 10% of your cash today and in 40 years we'll watch that sunset in the Bahamas together, sipping pina colladas, surrounded by beautiful "ethnic" women eager to please us and our youthful desires! *Bring-ring*... *Bring-ring*... "Mr. Ponzi, young people called to say that they don't have any money to spare for a retirement account. We're broke. We need to run and deploy those golden parachutes now while we still have a chance!" *Click. Beeeeeeeeeeeep*...

So what's the alternative? Do you instead keep your savings in a bank account, where those precious zeros will hopefully increase over time, performing monetary mitosis just sitting there in a bank server hidden inside a high security underground vault? Can you live your retirement on a 1% interest of your contribution when the inflation rate is at 5%? *Bring-ring*... *Bring-ring*... "Hello Mr. Ponzi, young people called again today and they're saying don't have any spare money to put in a savings account. We're running out of funds. We may soon need to take drastic measures! He-hello...? Sir...? Are you there?"

Safe and guaranteed retirement was never a reality. As with many things, it's an illusion we kept telling ourselves because playing pretend was enough to make most of it appear to work. If enough people believe in a thing, then it might as well be real because we will all act as if it was real. This is humanity, and all of us need to face act seven with dignity, despite the harsh realization that the world and all things of matter in the end never mattered at all in the first place.
So what's the answer? Don't wait for the inevitable to creep up and empty your bank account while you still have your youth? "Live fast, die young, and leave a beautiful corpse", is that it? "It's better to burn out than to fade away"? By doing this, aren't you selling yourself short and depriving the world of your life, especially in your most wisest and experienced years? There are other ways of having a decent retirement without needing a pot of gold. It likely won't mean you're going to have that Bahamas fantasy island experience but realistically that was never going to be an option anyways. But having said that, if you ever have the opportunity and the means to visit the Bahamas, then please do so. It's a beautiful and wonderful place, with or without the fantasy island sales pitch.

One of the most important things to enjoy your final chapter here on Earth is to be in good bodily health. And the best way to do that is to start early, like your retirement account. You've heard it all before. Reduce stress, eat well, get enough sleep etc. The insidious illusion however is that those with too few wrinkles and grey hairs seldom think that their health would be a major problem once that odometer hits the warranty number. Parts break down by design, and the machinery needs better maintenance as the years go by. Some components can be replaced or repaired, others superficially mended, but in the end, all turns to rust and junk. Your mileage may vary but you can have that machine purring like a kitten for a long time if you know how to take care of it. So get to know your body well, and look after yourself before it's too late.

But even if you're in perfect health, what good is it to you if you have nobody to share it with? The importance of family and friends is overlooked by many and too often taken for granted. This is a crucial component of your retirement portfolio and it needs nurturing every step of the way. Keep special consideration for your children and your spouse. Their success is intimately tied to your well-being, and no amount of money can substitute them. Do not listen to those who claim otherwise. Broken families are not role models, and their advice should rather be taken as warnings to avoid their fate. But life happens, and if your family does break apart, recover your losses and rebuild that portfolio as soon as possible. It won't do it on its own.

And finally, when the end comes, the only thing you'll need to pack for the final journey is yourself. Find peace within, however you can. Search deep and reach far for it. If the desire and the willingness is sincere, then the doors will naturally open to allow the peace to come upon you. Death is a mystery and nobody knows what happens after. But we can at least learn how to reflect before turning that final doorknob to the great unknown. In the end, that's all we can do, and that's all we need to do. Make the most of your retirement to achieve inner peace.