Sad Worlds Collide: The Unretired vs. the Unemployed
The dramatic rise in unemployment (over 500,000 jobs lost last month) may be combining with an equally dramatic drop in the value of retiree investment accounts (40% and counting) to create a perfect storm. More specifically, the recently unemployed may be competing head-on with the newly “unretired” for many of the precious-few open jobs that will remain in our economy.
This is a triple-whammy for employment data and reality. First, a lot of the jobs that have been lost over the past year may never be regained even when the economy recovers. (Auto industry jobs come to mind.) Second, the stimulus plan that Obama wants to implement will be creating “infrastructure construction” type jobs for which many of the currently unemployed will be unprepared and for which the “unretired” will be physically unable to perform. Putting a 67 year-old unretiree in a Walmart greeter vest is one thing; sticking him up on a bridge with a hard hat is quite another. Third, as bad as the unemployment data is as released by the government, most of the “unretired” are not even included in that data. The hard truth is that the unemployment numbers are likely worse than we are being told.
The stories in the Business Week piece suggest two common themes among many of those who are now desperate to unretire. First, they did not make adequate plans for an affordable place to live in retirement. Second, they did not set aside enough liquid retirement funds to allow them to ride out a downturn in the market without having to sell devalued retirement assets.
All of this reminds Mr. ToughMoneyLove to dedicate myself more than ever to these important aspects of my retirement planning. First, I want to have a paid-for house to provide tax-free shelter services to me and Mrs. ToughMoneyLove when we retire. Second, I want to continue to add to our “wait out the market storm” stable value fund so that we are never forced to dip into our retirement nest egg when the market goes down. It’s too late for many of the soon-to-be unretired. It’s not too late for you and me.
Meanwhile, let’s hope that all of those who need jobs can find them. Whether they are victims of poor planning or not, anyone who seeks to solve their problem by hard work instead of government dependency gets credit from me.