I had dinner with a cousin this Thanksgiving (Canada). Much of what we talked about was our concern for how we were going to make it financially as we got older. Her mother just turned 100 and still lives alone and drives! Neither of us have a pension. We do have some savings - a lot more than most - but they are not secure and will not be enough to get us to 85 let alone 100.
How are the boomers going to make it? How am I going to make it?
How about you?
Do you have a pension? Can you rely on it being there? Pensions are I think a thing of the past.
You may have one now. But look at places like Greece. The Gold plated Government pensions are being taken away. On PEI there is a shortfall of more than $400 million. You may hope that the market will get this back - but I would not count on it.
If you have one, do you also think that your kids, who have so little, will allow you to tax them further so that you can play golf? Would you feel good about further impoverishing our kids to help you?
My bet is that we will see a big roll back in existing government pensions. The Canadian government is going to rollback MP's pensions. My bet is that this is a first step before they roll back Public Sector Pensions - they have to get the politics right. In the private sector, they are going away. Think Nortel. Think GM.
So, can we save enough? We are all encouraged to save. But most have not. Here is the American picture - few Golden Years ahead here!
I see from here that it is too late for most Americans. How does this look for you?
And even if you have saved. With low interest rates, our saving also do not offer much cash flow.
Only a tiny percentage - the old 1% - escape this.
So what to do? I cannot rely on my savings. I have some but not enough at current rates to keep me for another 25 years. I have no pension to speak of.
This is where I am going
- Radical downsizing - no debt! Done
- Reduce need for cash - Co locate - bring back the extended family - we are cheap child care! One kitchen - one set of taxes etc - working on this - This is the hardest one to do and will take a few more years to achieve I think
- Reduce the need for cash - Work on your community - so much of what you pay cash for - you may not have to if you are a contributor - mow lawns - cook meals - share stuff - so that you get it back - my plan is to do as much as I can in my community in the hope that it will become the new normal to help each other for things that we wou,dhave had to pay cash for before
- Invest in real things - Avoid equities as there is too much risk and too little time - invest instead in a better energy cost for your home - make your home capable of housing 2 families - add a garden - grow food - doing all of this - new heating - windows - insulation - much smaller house etc
I am still quite scared. How about you. This is all so unkown and so dangerous. And it will affect me and YOU! Few of us will escape and Hope is Not a Method.
Next year I will publish - You Don't Need a Stockbroker - that will expand on how to make us all more resilient in the future. For now you can get a glimpse of this new approach in - You Don't need a Job