A plan for retirement, even in this economic environment, makes sense
In recent years we have all witnessed the dreadful collapse of the U.S. economy and heard the discouraging stories of workers on the verge of retirement who, having diligently planned, saved, and invested for their retirement, suddenly find themselves facing their latter years with failed retirement plans and limited prospects for recovery. In this aftermath, we, especially the young worker, must ask if it is still truly reasonable to plan for retirement.
Plan for your retirement, an earlier generation taught. Make your years of dedicated, diligent, hard, and honorable labor as a working man or woman in the United States the key to your dreams, dreams that you might realize in your later years. Defer immediate gratifications, buy the functional rather than the aesthetic, the practical rather than the proud, save, invest, live modestly, temperately, with an eye on the years when your age would decrease your energy, your strength, your ability to do a full day's work, when you would have to rely on your savings and investment to live in the manner you will have achieved in the course of your working life. Make a plan for retirement and live by it was the common wisdom then--and it worked.
It worked for the young workers of post World War II. For most of those of that generation who could claim more than a few dollars of disposal income each month, the wisdom was heeded; each followed a plan for retirement. Between the 1950s and the 1990s, a retirement plan had a high probability of success. By adhering to a retirement plan, many lives were consummated, and many last years were spent in leisure and ease. Planning for retirement proved wise.
That was then, when the U.S. economy was growing steadily, when U.S. businesses, U.S. technology, and the country itself was leading the world. Even with several setbacks, the U.S. continually recovered, advanced, and surpassed. Faith in the stability and growth of the U.S. was at its highest. But that was then. This is now. Since the recent failures of our banks, the near catastrophic collapse of Wall Street, the failure of big businesses that depleted retirement funds, faith in U.S. business is now at an all time low. Now, a plan for retirement seems more like an infantile dream than an act of prudence.
Now, the young worker able to put aside for retirement must align retirement dreams and retirement plan to the hard and difficult realities before us. Now, workers are going to have to work longer and harder for retirement savings and investments. Now, they are called on to be even more frugal than their parents or grandparents had been. Many will have to rely mainly on CDs, IRAs and 401K plans after finding themselves in a lower income bracket. Those staying even or earning more do have opportunities as long-term investments become cheaper, but risks are higher than ever. Investments will have to take a back seat to savings. Most who plan for retirement will rely more heavily on their employer's retirement plans, preferably ones that match the employee's contributions. The young worker will have to give preference to a plan for retirement over a plan for educating their children (you can always borrow to send them to school). Some will now do better to pay down their mortgage. Most will have to give up dreams of world cruises and million dollar retirement homes. All will have to have a greater faith in the U.S. business then did their ancestors. A retirement plan is still feasible, but more difficult to achieve.
Whether good times or bad, a retirement plan is still prudent. After all, in all likelihood, one day you'll be in your sixties, perhaps with twenty or more years before you, a little weaker, a little slower, a little more tired, deserving of a lighter load, some leisure, and gentle ease. With all the work you'll have to do to get to retirement age, retirement you will certainly need.
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