Weekend Reads: Retirement Dreams, Summertime, and Learning to Say No

It may be my age or that summer is almost upon us in the United States, but lately sunshine and lazy days are my siren song, calling me to contemplate the possibility of a permanent vacation — retirement.

What a lovely sounding word that is.

Of course, I am romanticizing the idea. I envision long, leisurely days spent reading books or hiking with my spouse and my dog, always in perpetual sunshine, without a care in the world, financial or otherwise.

Perhaps that was the original goal when the concept of retirement was invented in 1881. How did it happen? “Otto von Bismarck, the conservative minister president of Prussia, presented a radical idea to the Reichstag: government-run financial support for older members of society,” Sarah Laskow writes. Bismarck argued that those who can longer work, whether due to age or disability, “have a well-grounded claim to care from the state.” It would take eight years to come to fruition, but by 1890, “the German government would create a retirement system, which provided for citizens over the age of 70 — if they lived that long.”

In the United States, the American Express Company offered private pensions beginning in 1875. But it was not until the 1920s, that “a variety of American industries, from railroads to oil to banking, were promising their workers some sort of support for their later years.” Hence the concept of retirement took hold. (The Atlantic)

Unfortunately, all too often these days, reality intrudes on our visions of retirement bliss.

“Many Americans are unprepared for retirement,” says Dave Evans. His top retirement-related concerns? Running out of money, not having enough to maintain one’s current lifestyle and spending level, and rising health-care costs. Clearly, having sufficient income to live on is the underlying theme. And rightfully so: “Almost one-quarter of workers say they and their spouse combined have less than $1,000 saved for retirement,” according to Kate Lobosco. Nearly half of those surveyed by the Employee Benefit Research Institute said they had less than $25,000. A sizable percentage — 41% — couldn’t even guess how big their retirement nest egg should be to begin with. (Independent Agent, CNNMoney)

Perhaps some of this confusion and fear is to be expected. “The retirement system simply defies human behavior,” writes Teresa Ghilarducci. “Basing a system on people’s voluntarily saving for 40 years and evaluating the relevant information for sound investment choices is like asking the family pet to dance on two legs.” Ghilarducci outlines how failure is an inevitable part of “the voluntary, self-directed, commercially run retirement plans system” by listing six variables that must be nailed down in order for your plan to work perfectly. I think I am successful in only one of the six. Maybe this is another clear indicator of the work financial advisers still need to do to adequately prepare their clients for this phase of their lives. (The New York Times)

Despite these concerns, I will continue to dream. Particularly about the beaches of Portugal, Malta, or Costa Rica. I hope they allow dogs. (CNBC)

Speaking of summer, two of my dear friends are elementary school teachers. Both look forward to the summer months with just as much anticipation as their students. I have great respect for teachers and often think of these friends when an article about their profession crosses my path. This one got me thinking. Personally, I loved the movie Freedom Writers. But I watched it through the lens of my individual story, a simplified narrative formed by my own personal experience. As Anne Beatty writes:

“Effective teachers, though, begin to understand the complexity of their role, and its power, by remembering how complicated their students are. Only then can teachers see what their students lose in a classroom that reflects and reinforces the power structure that exists outside schoolhouse walls, and especially in popular culture.” (The Atlantic)

Another piece of teacher-related content that left an impression is this TED Talk by Taylor Mali about “What Teachers Make.” I have watched it several times, and it never fails to make me appreciate those who engage in this herculean task. “Teachers make a difference, now what about you?” Mali asks. (TED)

Hopefully, the slower pace of summer will give teachers, and all of us, some time to think. As someone put it back in 1911:

“My impression is that we need now some time to think, in order that reflection and study of principle, and grasp upon realities, may take the place of perpetual discussion and exposition, partly of what is, partly of what never was, partly of what never can be. . . . ‘But when, friend, dost thee think?'” (Conversable Economist)

Part of my contemplative process involves reviewing the day’s events, conversations, and nuances. Often I consider what I could have done better, what I can learn for the next time. One thing I’m no longer afraid to say: “I don’t know.” Many people, I’ve found, won’t utter these three words, ever. They’ll change the subject, offer justifications, or obfuscate just enough so that they don’t have to admit their lack of knowledge. “Not knowing what you don’t know is dangerous indeed,” Shane Parrish observes. “In this position, you are clueless as to how to minimize gaps in your knowledge, which could hinder your ability to excel in business and in life.” And honestly, “who needs more ignorance in a world that’s already full of it?” (Farnam Street)

“No” is another word we have difficulty with. I see this quite often with both work and volunteer requests. “It’s in our nature to be socially obliging, and the word no feels like a confrontation that threatens a potential bond,” writes Kristin Wong. So we acquiesce when all the while we know that a yes is not a good idea. “When we dole out an easy yes instead of a difficult no,” Wong continues, “we tend to overcommit our time, energy and finances.” She provides some tips for effectively communicating no, because, as she says, “learning to say no comes in handy.” Yes it does. (The New York Times)

For fun, I have to include this story about tree-climbing goats. Who knew goats could climb trees? I sure didn’t. A new study addresses the question of whether trees grow from seeds that goats eat and later expel. “The answer has important consequences for the birth of baby trees — in particular, the gnarled argan tree of Morocco,” Marc Silver notes. “Goats are encouraged to climb, dine and deliver the seeds to earth, where they are collected by humans and eventually turned into argan oil.” Go figure. (NPR)

Finally, in the midst of the current global turmoil and vitriolic media coverage, keep in mind this beautiful letter written by E.B. White to a correspondent who had lost his faith in humanity: “Hang on to your hat. Hang on to your hope. And wind the clock, for tomorrow is another day.” Happy weekend. (Farnam Street)

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All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.

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