Will You Support Your Parents?, or, A Post That's Mostly Unrelated Footnotes

When you start wearing Crocs all the time,
it may be time to throw in the towel.

A recent study mentioned in the New York Times states that 35% of adults near retirement age expect to not retire at all. Their reasons for not being able to retire included, perhaps obviously, the need for the income that working provides and the insurance benefits that accompany working.*

I don't know about you, but whenever I read articles like this, I tend to reflect on the ideas put forth by personalizing those ideas. That is to say, how does this information affect me and mine?

To answer, let me start by stating that I'm pretty lucky to still have one set of grandparents alive and in relatively good health.** My grandpa still owns a laundromat which he continues to run at age 89 (though he relies more and more on my dad for the day to day duties). My grandma never really had a professional career, per se, though she did work various jobs in her life, and she also helps grandpa with the laundromat. So, while I suppose you might consider my grandma retired, my grandpa is not retired by his own choice.

And bully for him! If we're being honest, owning a laundromat is almost as passive an investment as running a business can be. Further, I don't know that grandpa needs the money that the business brings in at this point; while I'm not privy to all his finances, I don't think they're hurting. As an example, five years ago, grandpa bought the land his business is on, and three or so years ago, grandpa bought grandma a bigger house (as our family grows, so too do family holiday gatherings). In talking with grandma a few months ago, she seemed to think both of those purchases were pretty much paid off. For grandpa, continuing to have the business seems like it's his choice to help provide for our family even after he's gone.

With all that said, I wonder how many of the 35% of people in that survey are like my grandpa, who have sweet, relatively easy gigs?*** I suspect he's probably more of the exception.

However, when it comes to my parents, I don't think they're quite as set. My dad (69) retired a couple of years ago, but he still gets called in from time to time to his old work as well as helping out at grandpa's store. My mom still works during the school year. Again, while I don't know everything about their finances, I estimate that they have some money in retirement accounts, but what's there may not be enough to live on (for what I'm hoping will be a long time). On the plus side, they'll both get Social Security, and the house that they live in (that I grew up in) is nearly paid off.****

Still, I think my parents will probably be okay when they both retire. I know my mom could have started receiving Social Security benefits a few years ago, but it looks like she's planning on working at least one more year so her Social Security checks will increase.*****

So, I think that I'm in sort of lucky place. My family seems like it will be able to continue to provide for themselves into their twilight years. Still, I wonder if I should start saving a little extra money for my parents in the event that they run out of money.

What do you think? Are any of you planning on supporting your parents? Should you be? Should I be? Let me know in the comments.

*Not to get too political, but Obama wanted free healthcare for Americans, and, instead, we got legislation that says, "Buy health insurance or else we'll, fine, er, tax you." I have a hard time believing either party is happy with that outcome. After all, when not having health insurance is outlawed, only outlaws won't have health insurance. Maybe I'll drop off the plan I'm on so that I can get "Thug Life" tattooed across my chest.
**I'm very lucky in the case of my grandfather; three months ago it looked like he was going to die in a matter of days. His doctor told my family that he was just getting old and that his body was starting to shut down. It's worth noting that this is the same doctor that "missed" my dad's cancer. My parents eventually took him to the emergency room, where they, too, were unable to figure out what was wrong with him, but, not willing to give up, they took him off the various medications he was on, and he immediately regained strength and started to get better. The short of it is, a pharmacist had mislabeled grandpa's blood-thinning medication, and so grandpa was taking twice as much he should have been. The old saying is that blood is thicker than water, but it seems like there was a time for grandpa where water was thicker than his blood.
***I don't think it's 100% easy, though I do think the primary difficulty in starting a laundromat is the start up costs. Commercial washers and dryers aren't cheap, and they do need to be replaced eventually. That said, I do think the day to day aspects of running a laundromat are pretty easy.
****That said, a house as a retirement asset doesn't always seem like a great idea. After all, how many people lost 40% of their home equity in 2007-2008 that were hoping to retire? Also, if you sell your house, where will you live?
*****Eligibility for Social Security renews each year in January, so, for you extreme penny pinchers out there who are worried about your kid's retirement, you might want to start "getting busy" around March or April so you can get a January baby who will be able to suckle on the government retirement teat as quickly as possible. My dad with his December birthday had to wait nearly a whole extra year to retire.

Photo by boliston.

For Every Thing, There Is a Season

"Life can only be understood backwards, but it must be lived forwards." - Soren Kierkegaard.

For me, the new year provides a good opportunity for reflection.  The sheer number of resolutions that people make (including myself) is testimony to that fact.   So, in the spirit of the time of the year, here's something that has been on my mind lately.

When thinking about money, the prudent or the smart thing to do is often to focus on the future.  Did you receive a sudden windfall?  Make sure to invest it.  Are you contributing enough to receive the maximum match from your company's 401k program?  If not, are you looking forward to eating primarily cat food in your golden years?

Get your dirty mitts off my Meow Mix.

While the above, in general, is absolutely sound and worthwhile advice, it poses a simple problem: we each only exist right now.  While your future self will be thankful for a comfortable retirement, if you always deny yourself present happiness, I can't help but think that that same future self will look back on a life that was hardly lived.

So, what am I suggesting?  Am I suggesting an "Eat, drink, and be merry, for tomorrow we die" mindset?  Hardly.  In fact, focusing too much on your happiness today will come at the cost of a less secure retirement. 

All that I'm saying is that it is fine to splurge once in a while.  What I'm suggesting is a balance between your present and future happiness (your past, having already been lived, is unchangeable).  Inasmuch as your happiness is tied to the things that you own or the things that money allows you to do, make sure to have some fun once in a while.

We only get to live once, after all.  We may as well have some fun once in a while.

Picture by PugnoM.

July 2011 Retirement Status

Well, it's a few days late, but here are my latest retirement figures.*

Overall, I'm not very pleased, and I am fairly confident that nearly anybody is probably not pleased with how their accounts have gone in the last month. I haven't added to either my old 401k or my Roth IRA, and they both have made precipitous drops in the last month (I lost about $2800 in my old 401k, and you know what? It didn't even call me in the morning).

Still, I am happy and blessed to be this far along towards retirement, but I guess one never really loves to get taken along on the whims of the market (at least not when it goes down).

My plan for August is to get another three to four hundred smackers in my Roth while the market is down. I am fairly confident in the mutual funds that I've chosen, so (allegedly) it's just a matter of waiting this dark period out. We'll see if I'm doing any better come next month.

*I thought I'd wait for S&P to downgrade the U.S.'s debt before I posted. It seemed the most equitable.