Rebuilding Your Wealth: Could Savings Sink Us?

There is an old philosophy joke that goes something like this: A man catches his wife in bed with his best friend. As the husband asks “what’s going on here?” his friend replies “are you going to believe me or what your eyes tell you?”

That is about where we are in this economy. There are plenty of reasons to see things are beginning to improve and yet, it is still difficult to see these improvements. The recent rise in spending (0.3% with an earnings increase of 1.4%) is curiously coupled with the recent rise in savings. How can that be? Or better why can that be?

Even those of us who fall squarely on the side that disagrees about the Obama administration’s attempt to fix this economy with a government spending program so massive the numbers simply boggle the imagination can agree that if it works it will be good to be wrong. Those of us who think that this is exactly how you fix the problem that over six months ago belonged to another president, are hopeful that we will be right because it would be no fun to be wrong.

Seeing what you want to see is of course, nothing but a defensive posture we all are capable of assuming when things look bleak. In his 1993 book titled “How We Know What Isn't So”, Thomas Gilovich suggests the endowment effect might have something to with this. He writes, “ownership creates inertia that prevents people from completing many seemingly beneficial transactions.” For the economy to move in a direction that many considered beneficial, keeping your money close will not necessarily have the same desirable effect as if you began spending it.

Numerous reasons have been given as to why Americans have chosen to rebuild their depleted accounts rather than spending some of this cash. Beginning with building emergency accounts to offset any potential hazard that, if it hasn’t already happened (it probably won’t) from occurring. There is also some speculation that the growth in these accounts is the direct result of the poor performance of our retirement accounts.

Both of these reasons seem to be not only believable but also just plain old good sense. Just about everybody who writes about personal finance will tell you, the ability to tap back-up cash (the amounts vary from between three, six or twelve months of income) in times of crisis is the first rule of a healthy personal balance sheet. It is unrealistic for the majority of us but good advice nonetheless. The most troubling aspect is the shift from what made us feel good (our ballooning retirement balances) to what we think will make us feel good (our fledgling savings accounts) now.

When it came to investing, I can be relatively safe in suggesting that we all thought we knew what we were doing. Those of us that took the time to study our options, did a little research and chose the investment that we thought would best fit our tolerance for risk probably thought you were doing better than most. This phenomenon is based on one of the most well researched topics among psychologists.

Our retirement accounts were an extension of our assessment of our own abilities. Mr. Gilovich writes: “ the average person purports to believe extremely flattering things about him or herself – beliefs that do not stand up to objective analysis”. Our self-serving assessments as Mr. Gilovich calls them make it difficult to “apportion responsibility for our success and failures”. When the market performed well and by default our investments, we took full credit of our skillful strategy and savvy. When the market failed to perform, giving up years of gains, we were quick to blame external circumstances.

Now we look to savings to save us and help us feel endowed once again. There are three problems with this approach and why it will stigmatize this recovery. The first being our assessment of risk is somewhat askew. We have more or less rubber-banded from fully stretched to a restive state. We have removed out-sized risk in favor of none.

The second problem facing the economy is that savings and our logic for keeping it stashed away is not logical. Our motives at regaining self-esteem through building a savings account will have the exact opposite effect on who and how you perceive yourself. You look for retirement to happen one day and you reason, when I reach it, I will have six months savings stashed away in the event that I might need it. More troubling, what if that is all you have?

By rebuilding (or in many cases building) a savings now might jeopardize the economy in ways you haven’t considered. Although much of the income increases recently reported were due to increased overtime by skeletal staffs, there is far less opportunity to invest or even where to when you are out of work. Those that still are employed have not yet returned to the markets as employer incentives such as matching funds have dwindled. Many pension plans have been frozen. To reverse this trend, some one needs to buy something.

There are goods but few buyers. The nature of the transaction, which does not necessarily need to be motivated by credit, has not shown an equal recovery as compared to what we saved in the same period.

Third, the opinion makers, the people we listened to when we were investment geniuses are not making any sense to us anymore. This motivation makes us turn to those that tell us what we want to hear. Studies support the idea that we look for not only the kind of information we want to hear but how much we need to ingest. Things are bad and you hear: could get worse; could be you; you should prepare. Things are good and you listen to experts that advise you on the ways to keep it good. Even when we find information that doesn’t jive with our thinking, we will dig around until we find something that supports what we want to believe. We want to be comfortable that what we are doing is what we should be doing.

John O'Donohue, poet, philosopher, and scholar, looks at the Irish imagination in his book Anam Cara observing, “To the inferior eye, everyone else is greater. To the indifferent eye, nothing calls or awakens. To the resentful eye, everything is begrudged. To the judgmental eye, everything is closed in definitive frames. To the greedy eye, everything can be possessed. To the fearful eye, all is threatening.”

Without risk, what we see is what, better yet all we will get. John Burroughs wrote: “A man can fail many times, but he isn't a failure until he begins to blame somebody else.” And no one will want to take the blame for what the next year holds as his/her own because of it.

Retirement Planning at 60-years-old

Now is the time to ask the serious questions.

Are you considering what your after-work sources of income will be? Can you live on them now? Take your Social Security payments, any pensions you might receive, and any other source of income from savings or retirement plans, add them together and create a household budget around them. Does this support your idea of retirement?

Can you afford taxes, insurance and upkeep on your home? Is it too big? Will it need major repairs to last until you are eighty, or ninety? Do you still have a mortgage? Have you created equity? Do you have debt?

It is the classic observation that George Foreman made: “The question isn't at what age I want to retire, it's at what income.”

There is an excellent chance that you will still be working when you celebrate your sixtieth birthday. The ability to remain viable and contribute something to the workplace should be worn as a badge of honor. Unless you are working for the wrong reasons.

If you are working because you failed to save enough for the retirement you envisioned, then now is the time to lower those expectations just a little bit. Many of us harbor outsized visions of what we want retirement to be. By age sixty, we will either be disappointed or overjoyed.

Perhaps you have been blessed when better than average health. If so, working beyond what many consider normal retirement age is creating wealth that will make your post-work years more comfortable.

But far too many adults are entering this time of life with less-than-perfect health and worse, the inability to pay for health insurance to cover it – if they have insurance at all.

Debt, and not just mortgage debt, has become a problem among this age group, weighing on their mental well-being and forcing many to work because they have to rather than because they want to.

It is possible that you have more than you think. If you have lived in the same house and built up a good deal of equity – the difference between what you owe and what the house is worth, this might be a solution to your problem. You could downsize, selling the property, satisfying your debts and even creating a small, but much needed nest egg to help with your retirement years.

If you do, you should consider places where the amenities meet your needs. Do you want to be close to your family? For many people thinking about retirement, this is a serious consideration. They want to be near their families, help with their grandchildren and even be closer to their own children.

If you intend to move, ask yourself if there a viable and mixed population present? Recent studies have proven that communities that cater exclusively to seniors do not fulfill many of the social needs of people entering retirement. They like the neighborhoods they live in to have a good mix of people already living there. Businesses often look for the same types of neighborhoods and in doing so, increase the livability of the area.

If you are considering working until you are seventy, you can delay taking your Social Security withdrawals until later. Any retirement savings in 401(k) plans or IRAs will need to begin distributing funds by age 70 ½. Until then, you can continue to make contributions.

Additional reading

• Investment news
  
• Retirement Planning
  
• Personal Finance

Retirement Planning at 20-years-old

Retirement saving is best done early and consistently. Retirement planning, the roadmap to how you will spend your after-work life is not as easy ­ especially when you are in your twenties.

Alyce P. Cornyn-Selby once wrote, "Procrastination is, hands down, our favorite form of self-sabotage." And who can deny that this is the single biggest hurdle we will need to jump in retirement planning.

As twenty-year olds, fresh out of school, whether it be high school, trade school, or college, we see the world in terms of the here and now. We are young and that youthful exuberance gives us the false sense that time is endless. We are undeterred, full of hope and rich in the belief that time is on our side. And in a way, it is.

We have our first job and with it, our first taste of financial independence. We divvy up our paychecks in terms of what it will buy: x-amount of dollars for rent, transportation, clothes and entertainment and not always in that order. Few twenty-year-olds are able to see the value of saving at this age. There are simply too many opportunities to seize and fun things to experience.

And your retirement plan should not take away from that time in your life. It should compliment it. But there are three things you must confront first before you begin the party that twenty is.

First, you need a financial mentor. This can be your parents, an uncle, aunt, grandparent or even a co-worker. This person will need to be older and wiser than you and someone you can trust.

This person will be nothing more than a sounding board for your financial decisions. They will, if they do the job correctly, play a sort of devil's advocate. Many of the big financial decisions we will make at this age will involve the use of credit. A financial mentor will allow you to ask yourself, while asking them, "do I need this now or can I wait until a time when I can afford it?" They will offer you a look at the mistakes they have made and what they would have done differently. Their experience becomes your lesson plan.

The second element of a retirement plan requires a clear understanding of how compounding works. When I am explaining compounding to beginning investors, I often tell use the story of the "Sultan'.

President Jackson once gave a gift to the Sultan of Muscat (now called Oman) after the ratification of a treaty between the two nations.

The gift was a silver coin with the minted date of 1804 (although the coin was actually struck in 1834) that was "sneaked" out of the country via secret emissary. Remarkably, the coin remained in its original condition for almost 150 years before it was purchased by the family of the late Walter Childs of Brattleboro, Vt. in 1945 for $5000.

The coin was then placed in a vault for the next 54 years. Until, of course, it was auctioned off for 4.14 million dollars!

Despite the "wow" factor of that fortune, many of you would be just as surprised to know, had that $5,000 been invested in a simple index fund that follows the S&P 500 (the 500 largest companies trading publicly in the US), you would have made $400,000 more than Mr. Child's family did when they took the coin to auction.

The key to compounding is beginning small, doing it consistently, and starting early. If your first job offers a 401(k) plan, a tax-deferred investment plan, sign up for at least a 5% deduction. In all likelihood, that small of an amount of pre-tax income will not affect your take-home pay.

• What is a 401(k)?
  

• What is an IRA?
  
  
• What is an index fund?

The last thing you will need to do is avoid using credit for purchases under $500. That's right. Put the cards away until you absolutely need it.

At this level of borrowing, the purchase in more likely to be financed with a fixed rate, more apt to come after serious consideration, and it will probably be more of a necessity than a whim. A purchase of that size is much easier to add to your budget ­ the available money you have to spend on your life¹s necessities.

The best thing you do at twenty is develop a retirement philosophy that let¹s you live within your means ­ cash for everything that costs less than $500 to avoid unnecessary and unsustainable debt. When you do this while investing a small portion of your paycheck each week ­ just a 5% deduction from your payroll, you will be on the right road to retirement. If your employer doesn¹t offer a tax-deferred plan, have $25 a week automatically deposited into a savings account that you can set-up for automatic deductions to an IRA.

We will return to our retirement glossary next week.

Retirement Planning and Future Calculations

The internet is littered with a wide variety of calculators, many of which are designed to help you focus on a certain goal. Many are just flat out depressing.



As we have found out, retirement planning is more than just saving money. It is a strategic position, a plan for all of the possible things that could go wrong from health issues not only for you and your family but job interruptions, career changes and forces that exert a certain pressure of which we have little or no control.

Inflation and taxes play a huge role in how we plan but they are almost completely unpredictable. Nonetheless, the calculators still try to paint a picture that will best, and in most cases, sell an idea, product or company that can help you attain that dream. Charles Schwab is no different.

The company is hoping that more companies will begin offering a Roth inside of a company’s 401(k) or defined contribution plan. But is a Roth good for everyone?



Not necessarily. The differences in the two types of retirement plans are based on the way taxes are handled. If you assume that you will be in a lower tax bracket when you retire, sticking with the traditional form of 401(k) will still be the best choice. It provides you with the same contribution opportunities as a Roth 401(k) would but may, especially in the lower income brackets – below $100,000 income, provide you with a better funded paycheck.

Once you get above the $100k limit, a Roth might serve you better.

The calculator that Schwab offers can give you some indication of the differences although it does not calculate the net result of inflation on those contributions nor does it discuss investment options or the fees associated with those investments.

If you use the tool, be sure to check the box at the lower right hand corner. It might give you a more accurate read on where you might be going and whether it is worth changing. If you can take home 9% more now and use that money to control your debt and even increase your emergency savings, a Roth may not be the best option.

Retirement Planning and Advertising

I have always marveled at the ingenuity employed by companies looking for your retirement dollars. They have portrayed it as a nest egg, picturing people wheeling around giant replicas of what they have amassed to secure their future. Although between you and me, retirement planning is more about the nest you build than the contents of what you put in it. Yet the image definitely has a certain stickiness to it.



Now the Dutch banking giant ING Groep has entered into the fray with their latest advertisement picturing a wide variety of people carrying around dollar based numbers. This new guilt trip offers a speculative look at how much money you will need in retirement. The bank’s message is designed to prompt everyone who has yet to save a nickel for retirement to take action.

The idea that some “hypothetical” number will prod you into saving more is not anything new. The advertising world has been very active in formulating the right spin on the topic. But I wonder if the costs of such campaigns, which are passed on to you in the form of fees, produce better investors.

I have spent a great deal of time talking about the high costs of investing in your future. My current book, the inspiration for this blog and the soon-to-be-launched website that accompanies it, looks at the numerous ways each step forward is taxed. Not in the sense the federal government taxes you but by the very companies that seek to make you rich – but not before they themselves take a cut of the action.

With mutual fund advertising, the 12b-1 fees offer a relatively straightforward assessment of what you will be charged by the fund company. You can pick among funds that charge their shareholders for campaigns to attract new investors by choosing the companies that charge little to nothing.

But once those funds get tucked inside of corporate sponsored retirement plans, the fee structure becomes more opaque. You should always ask: “why does the mutual fund offered in my 401(k) still charge a 12b-1 fee?”



Each fraction of a percentage point levied against your retirement savings means that, to achieve a target like ING suggests, you will need to save more. But saving more is only part of the equation. As I mention in the book, it takes a great deal of financial coordination to get where you think you should be (which I take the time to break down, one by one).

There are numerous forces at work chipping away at the effort and the fees, which ING does not mention in the ad – and why would they, are just a part of it. Beware the dangling carrot. It offers you the opportunity to chase what may never be yours.

Retirement Planning and Déjà Vu

When I mention the word déjà vu at the beginning of Part Four: The Investment, I, like many people who have been surveyed about the event recall something pleasant, a sense of having already seen – which is what the French word translates into, a dream. Most people think nothing of it, but that wasn’t always so.



There was time in the not-so-distant past when such activity was associated with front lobe epilepsy and relegated to the world of the paranormal. Déjà vu was said to occur right before a patient would seize so you can imagine how it was easy is was for early researchers to make the association. Although we know much more about what goes on the brain than they did in the early 1800’s, the exact cause of why it happens has not been fully explained.

French scientist Emile Boirac, is credited with first coining the word déjà vu to describe the event even though literature has made numerous attempts. St. Augustine, even though he wrote about it in the early fifth century, named it "falsae memoriae" and further citing the Pythagoreans as observers a thousand years prior. They believed it was the transmigration of souls.

Sir Walter Scott, Proust and Tolstoy noted it with Dickens (in David Copperfield: “We have all some experience of a feeling, that comes over us occasionally, of what we are saying and doing having been said and done before, in a remote time – of our having been surrounded, dim ages ago, by the same faces, objects, and circumstances – of our knowing perfectly what will be said next, as if we suddenly remember it!") introducing a form of it called déjà vécu.



Theories, as they often do, seeking to explain why it happens run the gamut from revisited memories implanted on the brain at birth to the sufferers being most likely to be strongly political or even religious zealots.

Travel may have an influence on the memory, giving the brain too much information at once and randomly filing away those memories for some time in the future, often when you least expect it. The brain, wired much the way a computer’s hard drive is, stores everything, dreams, good or bad, pleasant or anxious, memories, short-term and long, and emotions, often transferred during sleep between two known physical areas: the hippocampus and amygdala.



Emile Boirac was a French psychological researcher and president of the University of Genoble and Dijon University. Not only was Boirac credited with the naming of déjà vu, he also helped define ESP. His long out-of-print book L’Avenir des Sciences Psychiques explains how it all works, in French and even makes a stab at explaining clairvoyance, magnetism and spiritualism. You can read it here

Arthur Funkhouser broke Déjà vu into three different variations, déjà vécu (through sight), déjà visté (via some precognitive dream), and déjà senti (scent, taste or a certain feeling).

In the book however, these memory triggers, whatever they may actually be can be used to help you with retirement planning.

Retirement planning actually requires you to look in many different directions at once. You need to take into consideration all that has happened, all that could occur in the near future and make some educated decision about how it will all turn out in the future. No easy task for most of us.



What this boils down to is all about location. With all of those forces at play, you need to know exactly where you stand. You cannot change what has happened. But the next step should take into account where you have been. And unlike all of those disclaimers that accompany investment opportunities – “past performance is no guarantee of future results”, everything you did will determine where you will end up.

We will always be haunted by the investment choices we make but our past performance should make us more confident –even if you haven’t even begun to save enough for retirement – that the future will be much better.

Retirement Planning and Your Health

Few of us factor in the cost of our health on our retirement. We live with great gusto when we are young, never thinking of the possible implications those risky behaviors can have later in life.

We often discuss risk in financial terms but that discussion is often focused on the risk of an investment. But risk can be controlled in the world of investing just as it can be controlled when it comes to your health. Opting for less risky investments however can lead to smaller returns on that investment dollar. The opposite is true for your health.

When it comes to your health, this one area that requires you to review how much risk you have taken and what that risk will affect. Health risks demand conservative investing.




Those risky behaviors can have daunting costs later in life that can serve to undermine the best-laid plans. While incidents of cancer actually decreasing somewhat and most of the credit for that is due to earlier detection, it still remains a menace that is, in many cases preventable.

At Harvard University’s Cancer Prevention Center, they list ten controllable risks and habits, each of which has additional side benefits across your entire health picture.

Those risk factors are:
Maintaining a Healthy Weight

National Institute of Diabetes, Digestive, and Kidney Diseases

Weight-control Information Network
A one-stop-shop for information on weight control, this site covers a huge range of topics.

Centers for Disease Control and Prevention
Getting Started

This site offers practical strategies for becoming and staying active.


Tufts University
Nutrition Navigator

An informative site that rates the quality of individual nutrition Web sites based on their accuracy and usability.

Energize Yourself! Stay Physically Active

Being active can boost your mood and give you more energy.

Harvard School of Public Health, Department of Nutrition
The Nutrition Source

An informative site covering a wide range of nutrition topics, including weight control.

Intelihealth
Weight Management

A comprehensive site that offers everything from the basics on weight management to specific action plans for healthy eating and physical activity

Physical Activity

There is growing proof that physical exercise can prolong your life and ultimately lower your risk for disease. Remember, it isn’t too late to start and when you do, do so regularly. But if you haven’t done much more than remote control calisthenics, it would probably be best to talk with you doctor prior to getting started.

Tobacco Use

Tobacco use is the leading preventable cause of death worldwide. Aside from causing 90 percent of all lung cancer, cigarette use is related to the risk of cancers of the bladder, kidney, pancreas, lip, mouth, tongue, larynx, throat, and esophagus, among other chronic diseases.

Although the X Pack is primarily designed for those who have begun smoking at an early age, the product, the brainchild of Dr. Lorien Abroms, who won the Gareth Green Award for Public Health Practice is suitable for any age group.





Additional links:

American Cancer Society – 800 ACS-2345


American Heart Association – (800) 242-8721

American Lung Association – (800) 586- 4872


Centers for Disease Control

Diet, Multivitamins, Alcohol Use The HCCP is quick to point out that just because you may have received numerous and often conflicting reports about what you should and should not eat, that you should not be discouraged. The science behind diet is evolving but one thing can be said for certain, fruits and vegetables, less meat and generally avoiding unnecessary fats will help you reduce your risks for many health problems. Alcohol should be drunk in moderation if at all. Once again the science is still finding its footing on this subject but most studies agree, too much of anything is bad for your delicate system.



Additional resources

U.S. Federal Government

Nutrition.gov contains
information on nutrition and healthy lifestyles, covering topics from food safety and statistics to holiday eating and school nutrition.

Harvard School of Public Health: Department of Nutrition
The Nutrition Source offers basic but detailed nutrition and healthy eating information, as well as the latest in nutrition news.

American Institute for Cancer Research New American Plate series
A series of three online booklets highlighting the importance of eating a plant-based diet.

Sun Exposure The science on this category is pretty straightforward. Sunlight is not a good thing for most of us and for those of us who think we can tan, it can be deceivingly bad. The proportion of major cancers due to sunlight is startling: Melanoma (over 90%) ,Basal cell carcinoma (over 90%), and
Squamous cell carcinoma (over 90%) This is a risk factor that is easily controlled.



Here are some suggestions:

Avoid unnecessary and prolonged sun exposure.

Use a sunscreen with a skin protection factor higher than 15.

Avoid exposure to sun between the hours of 10 am and 3 p.m.

Wear long-sleeved outdoor clothing and a hat with a brim in the sun.

Protect your children from excess exposure to sunlight.

Don't ignore any suspicious skin growth, particularly one that changes in shape, color, or pigmentation.

Sexually Transmitted Infections Few if any of us consider infections as a risk for more serious diseases.



And even fewer, consider the risk of any sexually transmitted disease as having long-term, often cancerous results.

INFECTIOUS AGENTS ASSOCIATED WITH CANCER
Agent	Type of cancer
Human papillomavirus (HPV)	Cervix, vulva, anus, penis, head and neck
Hepatitis B virus (HBV)	Liver
Hepatitis C virus (HCV)	Liver
Helicobacter pylori	Stomach
Epstein-Barr virus (EBV)	Nasopharynx, Hodgkin’s disease, non-Hodgkin’s lymphoma
Human herpesvirus type 8 (HHV-8)	Kaposi’s sarcoma
Human immunodeficiency virus type 1 (HIV-1)	Kaposi’s sarcoma, lymphoma
Human T-cell lymphotrophic virus type I (HTLV-I)	Leukemia/lymphoma
Schistosomes	Bladder
Liver flukes	Bile duct

Screening and Family History & Genetics



And lastly, frequent screening for such treatable and often preventable diseases such as breast cancer, cervical cancer, colon cancer and melanoma all help to reduce your risk later in life. And while genetics is still in its infancy, the communication you have with your doctor, especially when it comes to family history of illness is extremely important.

So if you are focused solely on the monetary value of your retirement plan, it would be wise to take into consideration some of the additional factors that are well within your control and most importantly, can end up thwarting all your well-intentioned efforts.

Retirement Planning and Another Rainy Monday Morning

Although there is no scientific proof that we think about retirement most often on a rainy Monday morning, it would have to rank high among the reasons of why folks focus their hard earned cash on reaching those final days. The idea of dragging ourselves out of bed to go off and do a job we may or may not be necessarily enamored with doing, can seem especially hard as the list of things we would rather be doing grows.



But few of us use work and the paycheck that comes from the job you do in a way that would limit the number of Monday mornings you have yet to face.

Consider the employee who participates in a 401(k) plan. She or he is probably contributing the same amount to their tax deferred plan as they did when they first signed up for the program.

In the mean time, the nature of your job has changed. If you haven’t left for greener pastures at another company, you may have received some time based or merit raises. Bonuses aside, the increase in pay was probably quickly, even seamlessly absorbed into your daily budget. And there is your retirement plan, the one you set up all those years ago, languishing.

But wait, you might say. As your pay increases, so does the amount taken out of your check if you have set yourself up to have a certain percentage removed. But it is not enough to take a percentage of a percentage. If you receive a 2% raise, a $1,000 a week paycheck would increase by $20. A 5% deduction of pre-tax income would see an increase of exactly one dollar a week or $52 a year.

You have basically two choices. Dave Barry, humorist and author who at one time suggested investing in tiger poo instead of mutual funds said, "You still have time to salvage your retirement! All you need to do is develop some financial discipline, develop a realistic budget, avoid frivolous spending, pay off your debts and start putting away a meaningful amount of money each month for the future. Don't be discouraged! You really can do it, if you put your mind to it and use your magic time-travel ring!"

Or you can funnel a percentage of that raise (or all of it) into your 401(k). Suppose the increase in pay you receive takes place on a annual basis. Suppose that you take that modest cost of living adjustment of just 2% we mentioned above. This is almost a negligible amount when you look at it on a week-to-week basis on a $52,000 yearly income to about $20. This may not seem like much except when you apply it to your future. That $1,040 extra bucks is huge to your retirement plan.

In the book, I ask you to look at work from your current point of view. You may enjoy your work. The vibrancy and daily rigor a great job can give you are hard to replace during retirement.

The Bureau of Labor Statistics publishes a monthly report on employment. This report can be an indicator of economic strength or weakness and depending on who you are – average Joe or a Wall Street investment type, it can mean nothing or everything. What we miss in those numbers, which for the most recently published unemployment rate in September was 4.7%, is what they tell us about the future. This number comes with all sorts of caveats and often is re-adjusted for one reason or another.



One other number we should look at is the Civilian Labor Force Participation Rate. For September, it was estimated that 66.0% of the population was working.

Yet, according to National Atlas, a government mapping site, the growth of the population, especially among those who are aging, could spell disaster.




The site reports that “for the population 65 years and over, the growth rate in the South (16 percent) was nearly three times the growth rate in the Northeast. And the growth rate in the West (20 percent) was more than three times that of both the Northeast and the Midwest for this age group.

“The 50-to-54-year age group experienced the largest percentage growth. Of the 5-year age groups, 50-to-54 year olds experienced the largest percentage growth in population over the past decade, 55 percent. The second fastest-growing group was the age group 45 to 49.



“The baby-boom cohort entered these two age groups during the past decade. The third fastest-growing group in the past decade was 90-to-94 year olds, which increased by 45 percent.”

To me, this signals some tough competition for fewer jobs. If you had planned on working in your later years and you haven’t decided what that some other job will be. You had better ramp up those savings while you have a chance.

If you did plan on working well into what would normally be considered retirement age, now is the time to cultivate a new career.