So You Didn’t Get Rich…
By Tyler Durden
Submitted by Mark Ford via InternationalMan.com,
Waa! It’s not fair!
We baby boomers were told that if we worked hard and saved, we could spend the last quarter of our lives living comfortably and free from financial worries. Our parents told us. Our employers told us. Even the government told us.
How often, during our years of toil, did we daydream about those future days? The leisurely breakfasts, the afternoons golfing, dinners with friends, weekends with our grandchildren…
(Note to younger people: Don’t stop reading. What I’m saying here applies to you too—in spades!)
But now that we are reaching retirement age, the promise is beginning to feel like a fraud.
For many of us, a financially secure, worry-free retirement no longer seems possible.
Not to worry. I’m going to give you my best advice on how to create a very attractive retirement from what looks to be a seemingly impossible financial situation.
After scaring you with some numbers in this essay, I’m going to spend the next installment telling you how to fix anything you may have been doing wrong. I’ll also give you some realistic suggestions for acquiring wealth—no matter how much you have to start with—while you are still willing and able to work for it.
Finally, I’ll give you an idea for how you can retire very comfortably—and very soon—on a modest income. And by “modest,” I mean less than $40,000 per year.
What Happened to the Dream?
What happened, fellow boomers? How did we fail? Did we work too few hours? Too few years? Did we spend more than we should have? Or fail to save… or save too little? Did we invest poorly?
What happened was a combination of “surprises.” Some predictable. Some not so much…
1. We worked hard, but we didn’t get meaningful wage increases.
As a group, we boomers worked more than we were required to throughout our careers. Not only did we work more than 40 hours per week, our productivity nearly doubled between 1979 and 2013 (according to the Bureau of Labor Statistics).
And we are still working hard. According to the Current Population Survey, the full-time working boomer aged 55-plus is still averaging 42.4 hours per week. (The most recent data is from 2013.)
The problem was that, over the long haul, our wages did not keep pace with inflation.
From 1948–1979, wages adjusted for inflation rose 93.4%, according to the Economic Policy Institute. The wage rate increases were beating the slow rise of inflation—big time.
Now look at what happened in the late-1970s…
In 1979 (some sources say as early as 1972), wages went flat. For the next 35 years, as we boomers passed through our late teens, 20s, 30s, and 40s, real wages increased only about 8%.
And since 2009, the tide has reversed. Real hourly wages are once again on the decline.
So while our bills continued to rise, our take-home pay, in real dollars, didn’t—and still doesn’t—keep pace with inflation.
2. We saved less and less.
According to various sources, the average boomer has had an average annual disposable income of $24,000. The problem is: We …read more
Source: So You Didn’t Get Rich…
