Saving for Retirement - My Story

By: Harold L Lowe

I was born and raised in a small town in southeast Arkansas with a population of about 700. My parents were share-croppers. It was a hard life. We had no mechanical equipment. All of the power to needed to get the crops to market was provided by two old mules and us. My parents' mantra to me and my other ten brothers and sisters was: "Get a good education so you can get a good job and make a good living."

Well I earned a BA degree and joined the Air Force. After I was discharged, I found it difficult to find "good paying" work, however. The jobs I was able to land paid enough to put a roof over my head and allowed me to have a little "fun" but little else. Planning and saving for retirement were not priorities for me at that time.

When I finally began to focus a little on retirement in the late 1970's, I was fortunate enough to begin carving out a career in the Public Sector as a school district administrator. I secured the services of a financial planner and set up a tax-deferred annuity. I was able to increase my income to six figures and was sailing along toward retirement. And then Life happened!

At age 62, I found myself suddenly thrown out of the district on my ear because the district massively over- spent its budget and had to eliminate nearly four hundred jobs, including mine, to just begin the long process of recovery. What would you do in that or a similar situation? I opted to retire rather than trek all over the country seeking another comparable six figure position. The shocker for me was the realization that even with my tax-deferred annuity that I had poured handsomely into, my total retirement income slid downward by nearly 20%! I felt terribly. I felt like I had failed.

I later discovered that calculations of retirement income adequacy usually target 75%-8o% of pre-retirement income which is considered by many financial planners as adequate since the income needs of retirees are supposed to be lower than those of workers. The reasoning is households no longer need to save for retirement, taxes are supposedly lower, work- related expenses disappear, and the family size of retirees is generally smaller. Retirees are also expected to consume less (whatever that means). I was at 80% of my pre-retirement income, but that didn't make me feel any better. All I could think about was I had worked nearly all of my adult life and now that I was retiring, I would have to live on less.

Remember, however, you do not have to live on less in retirement. No matter where you are right now financially, you can build and enjoy a retirement lifestyle that you desire. Peace.

Retirement
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