This column is the second in a series of lessons learned and insights about how to balance the need for security with the ability to live exuberant lives with confidence and freedom.
Benjamin Franklin said, “Those who surrender freedom for security will not have, nor do they deserve, either one.”
Because my early jobs paid very little, and because starting a family ate up every nickel, I didn’t start saving for retirement until I was 31. I worked at a church that paid me little. Their small package included a sum above the stated salary for “benefits” that I was told by the personnel committee I could “Do with it what you want.”
I used it to feed my family.
That’s bad advice if you’re in that situation. But what can you do? The crying need of the moment drowns out the sleeping need of the future.
We lived like this: The check came in; we paid the rent, fed the kids, and waited for the next check to come in.
I found extra work when I could. I’d be guest preacher, lead a retreat or a Bible study series, write an article. I remember once my only money was a silent dime in my pocket. It didn’t even have another coin to jingle against.
I was teaching a high school Bible class for which I was being paid and I went to the class knowing I really needed that payment that night so I could buy some groceries on the way home. It was a bad feeling. I never want that feeling again.
I didn’t start investing in a retirement plan until I was with my first full-time pastorate through the denomination’s retirement planning agency. It was the first time I had a dollar that I could set free today expecting to recapture it with dividends tomorrow. As soon as you possibly can do so, you must.
According to a story in U.S. News and World Report, two-thirds of Americans depend on Social Security for at least 50 percent of their retirement income. Even worse, considering how many retirees there are now, more than a third of retirees depend on Social Security for 90 percent or more of their income.
Worse yet, for one-fourth of the 38.5 million people drawing benefits from Social Security, that program was their only source of retirement income. The average retirement benefit is about $1,200 a month.
If you don’t think you can live on $14,400 a year, you’d better adjust your lifestyle and start saving some money. And don’t whine about Social Security “not paying enough.” When it was started in 1935 life expectancy was 62.
Social Security was never meant to be your retirement fund. It was started to keep old people who could no longer work from starving in their homes and to give them an ounce of dignity.
I’ve put the maximum allowed by agency rules and the law into my retirement fund ever since I possibly could.
I have it taken out from my paycheck so I never see it. The more you put in, the better off you are and the more secure you will be later in life. Learn to live without that money. Find pleasure in seeing your account grow.
Eventually as you grow in your career and in wisdom, put additional money aside in a savings account to carry you through emergencies.
Even buying insurance doesn’t guarantee you’ll be covered in emergencies. High deductibles for increasingly expensive coverage put everyone at risk for significant out of pocket expenses. Our creaking system still leaves the majority of the population at risk for bankruptcy over medical bills. While that is a subject for another time it tells you again that security comes only with intentional preparation on your part. The only person, place or thing you can depend on to provide for you and your family is you.
When the floorboards are coming loose, you can depend on your own intuition, your own work. Security has to come as a mindset of what you believe you can count on.
The economic crash of 2008 annihilated many assumptions. It proved that job security and carefully plotted career paths are false. It proved a lie the adage that no one can lose money in real estate. It put many senior adults who were depending on their saving and investments into precarious positions, suddenly earning virtually nothing on their savings.
Consequently, the pages on your own retirement planning calendar may flip a lot more quickly than you intend. Writing in July 2015 in the Washington Post, columnist Rodney Brooks said an Employee Benefit Research Institute survey found that 50 percent of retirees left their jobs earlier than they had planned.
In other words, circumstances worked against them to force their retirement ahead of schedule. Maybe they were laid off too young to retire, but too old to get a job paying what they were making. Ageism exists.
NEXT MONTH: A preparation list from financial advisors.