Whenever I think about retirement planning, I think about my grandparents. My grandmother and grandfather will celebrate their 88th and 90th birthdays this year, respectively.
Although neither of them has worked for decades, they still have enough money socked away to pay the cost of an assisted living facility and to have a home health aide visit them weekly -- neither of which come cheap, as my grandfather reminds us all regularly.
While my grandfather, who refuses to be convinced that the Great Depression is really over, is certain that they will run out of money any minute and end up on the street -- my mother, who handles their finances, along with their myriad advisors, assures me that, not only will they not run out of money any time soon, they can afford to [gasp] spend some of their savings. Not that anyone's been able to convince my grandparents of that notion.
My grandmother was, for most of her career, a schoolteacher and my grandfather spent most of his working years toiling in a factory in the Garment District. When I think about how much my grandparents must have saved in order to accomplish that, even after all of the other expenses they've funded over the years -- including help with college tuition for their two granddaughters (thank you, again) -- I am amazed, and simultaneously distraught. Distraught because I feel like to be able to do half of what they have done financially during their lives, I will have to work until I'm 150 -- or give up simple pleasures like eating and electricity.
My fears were allayed by a recent retirement planning article that advised people with more than 10 years to save until retirement to "ignore the big number" -- that being the one that any of the innumerable online retirement calculators will tell you is what you need to retire comfortably.
Having attended more than my -- or anyone else's -- fair share of continuing professional education sessions about retirement planning on the job, I was skeptical about an article that proclaimed itself "The 15-minute retirement plan." And while I am not fully convinced that the author's "six simple rules" are really all I need to know about planning for retirement, that first piece of advice struck me.
To me, having a seven-figure savings target spit out by one of the aforementioned calculators staring me in the face does not inspire me to want to save for retirement. It makes me want to shut off my computer.
As the article pointed out, "Beyond five to 10 years, the future is essentially unknowable. None of us can accurately predict what our lifestyle, taxes or health benefits will cost, or what our investments will earn."
In my grandparents' case, that couldn't have been truer. Their current living situation isn't exactly what they had planned for their retirement. Having spent most of their lives in New York, they never anticipated that they would move to Austin, or that they would need the kind of help that they do. They certainly could never have fathomed what it would cost them (my grandfather is still in shock over the fact that subway fare in the city went up to $2). And if they had only saved enough to last them as long they expected to live, they probably would have outlived their savings.
So, when I think about retirement planning, rather than getting hung up on some ridiculous sum that may or may not be enough to live on, maybe I should give my grandparents a call.
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