Sunday, November 15, 2009

A pro-retirement guide to retirement

Wall Street Journal:

Amid the tumult of the past year, financial advisers are telling us that the Great Recession has produced one invaluable benefit: an education.

We now know, for instance, that our nest eggs can lose almost half their value in a matter of months; that "diversifying" our holdings doesn't necessarily safeguard those holdings; and that our homes -- our one investment for later life that was supposed to be foolproof -- can make us look like, well, fools.

Here's something to keep in mind when it comes to retirement: unless you have a guarantee, you don't have a guarantee.

A guarantee might look like Social Security and Medicare, only better funded to ensure genuine "security" in old age.  If you spend your life working productively, then you should be able to retire without worrying about medical and other basic living expenses.

No one will contest the fairness of this -- but they sure will argue at length about how money managers are best suited to deliver it!  Unfortunately, I have eyes in my head, and what I see does not inspire confidence in any other option than a government-backed pension.  But that's only because I actually want to retire, so perhaps I am biased.

Of course, getting there will likely require another civil rights movement; but besides bad TV and junk purchases, what else do we have planned for the next 30-40 years?  It would be a cool gift for our kids and grandkids, too.

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