Investing in Your Retirement Income

13 May 2016 Leave a comment

How is investing in your retirement income like keeping yourself in food? Well, how do you keep yourself in food now?

Feed-Me #3: I eat at my parents’ until they invite (force) me out to work and live on my own. Okay. Partying, social media, Starbucks platinum level may have to back off in place of serious work, rent and utilities, and eating out—but giving up international cuisine is asking too much. After all, you only live once, right? And this is how it will go until I drop or marry into money, the latter of which is not likely to happen when I pass the retirement age of 70+. By then inflation is likely to have out-paced wages by 100%. Hello, cat food.

I had no pension plan, except Social Security, and years of small government conservative shrank that and Medicare to something less than the poverty level and free clinic visits. No one explained to me that not everyone wins the lottery or winds up in the top 2% of wealth.

Feed-Me #2: I make a plan before moving out to own a house by 35, so save for a down payment while working hard and long—a day job plus a part time. I buy smart and healthy at the co-op and learn the best buys in wine and craft beers. I take a cooking class or two and master some pretty good dishes that impress my friends and partner. Our children don’t appreciate the food, but demand much in clothes, sports activities and tech-toys. Our kids go off to very good schools, which we hope will earn them high paying jobs.

By the time we settle in to paying off the house and college loans, we realize that there has never been a time to contribute the advised 20% of income to an IRA. We will be working past retirement age if we can, but those last 5 years of life, which cost half or more of our total life medical costs may have to be covered by the kids. I may be watching a modest life drain away into a long, sad decline. It all balances out.

Feed-Me #1: I live at home, paying costs to my parents until I have a steady career job. I plan on buying a home as soon as I can arrange it. I live as cheaply as I can manage, valuing people over things, parks over concert halls, Mr. Coffee over Starbucks. I use public transportation, which alone saves enough for a down payment on a house in about five or six years. I buy smart and healthy at the Cub. I have learned what foods have real value and are affordable. As soon as I can, I get a garden plot to supplement the expensive stuff I can grow. Once I get a house, I plant an apple tree in the yard and a big garden in the back. These investments, along with running and biking, help keep me fit as well, and will reduce my medical costs even into very old age. Live starts early and ends late after all.

I was fortunate enough to have a public pension plan which with Social Security took about 15% of my salary, and that was matched by my employer. I have paid off my house, and the kids’ public college loans are handled. Since I also saved in 430(b) and 457 plans almost from day one, I will have enough income for the next 20-25 years to equal about 80% of my final working salary. That means travel, visiting the kids, and even reinvesting against expensive final years.

Just as I planted seeds in my garden, I planted financial seeds in my retirement plans, and because I started early and waited, as I did with the apple tree, I can actually wind up with more than I absolutely need. Just as I understand the growing season, I see the value of treating life as a whole process. I could have just lived on the harvest collected by others; then I would have been feeding the others as well, and that would be expensive and would have no end. I could have joined the harvesting, cutting the wheat I could later eat, and that would have reduced the cost, but because of waiting until late in the process, it would have offered too little a return, and even that return could be threatened by a bad crop. Worse, next season, when I wasn’t working, I would earn no return at all.

Even starting early, planning and exercising some prudence, while it could earn proportional wealth compared to those early years, — even that case offers no guarantee. Climate change, mining operations, social disorder, any number of things can spoil the crops or even poison the land. Social Security and Medicare can still be gutted, pension plans can be subverted, or the world economy can collapse.

There are no guarantees; there are risks. The trick is to minimize the risks, and that is best done by pooling our efforts. Going it on your own, no matter how good you are, leaves you the most vulnerable. There is safety in numbers. It doesn’t matter how confident you are in your abilities, the thing that will get you is beyond your control or anyone else’s. Life is a challenge; rise to it; don’t try to play it. Your public employee pension plan is your best hedge against tragedy. It’s your right. Support it.

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In Search of Our Dignity

4 September 2015 Leave a comment

Almost 11 years ago, an Indian Ocean earthquake produced a devastating tsunami that was responsible for roughly 23,000 deaths and 100 millions displaced. Something like $5 billion was needed to provide assistance; $1.8 billion was pledged in emergency aid; and corruption, bureaucracy and nationalism hampered that humanitarian response on the ground and around the world.

Not long after it was clear that the Middle East had moved from unstable to incendiary. Sectarian conflict had been exacerbated, ethnic rivalries had become sharpened, and economic constraints following war in Iraq and sanctions in Iran raised anger as well as vulnerabilities. Once again tens or even hundreds of thousands of innocents have been killed and millions have been displaced. The birthplace of civilization and many of its most important features from ‘0’ to ‘Z’ is being destroyed in in an enormous and ironic gesture of psychotic religiosity. Criminal destruction and sale of antiquities and brutal human trafficking are taking everything from individuals and from the whole of humanity. Ethnic and political conflicts are being exploited in the turmoil surrounding the Syrian/Iraqi free-for-all. Meanwhile, people are robbed and killed by the truckload, babies are drowned and washed ashore, women are given for rape and abuse as religious rewards, and the world largely stands by, slaps a few hands, drops some more bombs, and argues about how it’s a neighbor’s responsibility.

When did we lose our humanity? Humanitarianism is the highest form of human dignity: the belief that we never have too little to share with those in need; a hallmark of humanity. In Guatemala in 1999, a family living in a single room home with little more than the clothes they wore and the tools they worked with offered me, a comparatively rich American, a meal. Theirs was an act of gracious dignity. In France last week, we prided ourselves for awarding medals to three men who jumped to the defense of a train car full of strangers, yet within a week, train cars full of refugees and migrants are being herded like cattle into camps in Eastern Europe. If we recognize dignity, why don’t we recognize indignity?

Perhaps our humanity was never real. Perhaps it was just a carrot, dangling at the end of a stick before our eyes. We are never more than a few steps away from attaining humanity as we trudge along the treadmill of history, reliving one inhumane absurdity after another. We struggle, or think we struggle, to get ahead and prosper, and we confidently accept that destruction, despair and death is the lot of others and must simply be understood to be part of life in this world. These are the words of an egocentric and cowardly fool. There is no guarantee that disaster and strife will not strike any of us. When that happens, will we expect the humanity of others to come to our rescue?

I hasten to add that there have been many, I don’t know how many, who have individually stepped up to provide the help they could in whatever ways they could. It keeps my hope alive. I direct my words at those who have mistaken empowerment for leadership. These are the times when we can distinguish those who are good leaders from those who simply wield power. Those who have stepped up to help I would mark as showing good leadership.

Filed under Community Service, Politics, Social Commentary Tagged with ,

Where are the Unions Going?

28 February 2015 Leave a comment

                As I was going through my email this morning, I saw an announcement for a speaker from the Food Chain Workers Alliance. I have been thinking, off and on, for some time about alternatives to the traditional labor union structure that we are currently saddled with, and which is being driven into the ground by the relentless forces of greed. I see the FCWA as a model for organized labor to examine as a possible alternative to the across the table model in which we are bemired.

                It is a labor counterpart to the “wellhead to gas pump,” production chain control. AFT/NEA and others could evolve into parts of a Human Development Professionals Alliance, dealing with all those involved with the development of every child from prenatal medicine to college graduation. Think how this would align the development of citizens by democratically and largely locally organized engagement.

                It would of course take a much smarter and more knowledgeable mind than mine, but the overall concept seems positive, and unifies the development of American children into true American citizens. Of course, such a design works counter to corporate efforts to atomize society allowing them to more easily fleece their sheep. It shifts its emphasis from workers’ rights and wages to the tasks and quality of work; it negotiates how to get the job done for the benefit of all. Such an alliance would set its performance goals based on the needs of the employers and the desires of the people to become a society of their own making. And, oh, it would be tough to implement. The rich and powerful will not want to give up control of the peasant masses to use as cannon fodder in their global “econowars.” Many workers would not want to give up the petty monetary or seeming autonomy benefits of their patronized niche. There would be sacrifice and discomfort, maybe even real pain along the way, but then people have died in the labor movement of the past. And sycophants should have no immunity.

                Additionally, those who do the work, functioning as a whole, help to restore our corroded democracy. It has the potential of monitoring and developing its members into a cadre of the most desirable and qualified "workers," rather than the cheapest. Workers of the past negotiated for their muscle and bone. HDPA members would negotiate for skills and competencies, brains and commitment. Incumbent upon the alliance then would be the capacity development and quality warrantee of its members. Consumers, employers and institutions could have the best or the cheapest, but if they could have the best at a fair wage, these work providers would come to the Alliance. There they would get the performance skills necessary to maximize their job needs.

                This guild model combined with the end-to-end industry model is but one alternative unions must consider. We need only look at the numbers to see that the unions and the middle class that they generated is deeply eroded. In twenty or thirty years without real change, unions will be the “Jamestown Settlements” objects of the future, historically significant and quaint. We will, by then, be beyond class warfare; we will have become an economically occupied nation.

Filed under Education Policy, Politics, Social Commentary Tagged with

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