Or you might say I am giving it away. I will leave my law practice that has gainfully engaged my working life for 34 year and retire. Mrs. Left and I picked the date about a year in advance. As suggested by Hunter's wonderful recaps of the political dysfunction in 2013, this seemed like good time of year to examine 2013's arc of my life, too, particularly as my last year working is now 2/3's behind me. Merry Christmas and Happy New Year.
Socrates is credited with observing that the unexamined life is a life not worth living, but I say sometimes 'tis simply a life not worth examining. At the risk of exposing that my life might be that kind of life, I invite anyone willing to take that risk to follow me out into the tall grass for some random brain droppings on the subjects of work, retirement, Social Security, Medicare, Student Loans, Aging, etc.
From second grade until I graduated high school, my family lived in the same building where my mother operated a business six days a week. I tell people I grew up above the store. Mom was self-employed all those years, first as the divorced but unsupported mother of two, who then remarried when I was in 3rd grade. Neither she nor my step-father held high school diplomas, but she was self-employed and reasonably successful for nearly twenty years and he was a well paid union electrician working on an assembly line for fluorescent light fixtures. Coincidentally, his brother in law owned the factory. I worked there too during high school and college.
Education was highly valued in my family circle, even though nobody had much. But, my Mom's older sister married a guy who became a banker, Lion's Club booster and rock-ribbed Republican. Their daughter went to college out of state and became a school teacher in the 1950's and taught elementary school lower grades all of her life until she retired. My older brother became a Ph.D. audiologist whose research won him an international reputation. I became a lawyer. We were the first cohort of our families to attain so much education and status.
I had already been married, even before I fulfilled a military obligation, marrying at the end of college and prior to Viet Nam era Naval service. I later finished law school, entered practice, and a few years later Mrs. Left got her law degree, too. She will retire about a year after I go. We are still together and celebrated our 43rd wedding anniversary last week.
After we retire we will relocate to the area where I grew up. I no longer have any family ties there, but there are other lures, cultural and more. Cost of housing in rehabilitating urban neighborhoods is one strong draw for us, as we currently live in a part of the country with enormous housing costs. Because we have labored so many years in professional occupations, our impending retirement, which scares both of us shit-less, by the way, will support us at levels most retiring Americans could only dream about. Yet, terror that it might not be enough abides.
Defined benefit pension plans, which used to represent the normal path to corporate retirement in America, are disappearing. The total number of employers offering such benefits, in 2012, had shrunk to 35,000, nationally, in 2012. Most Americans, if they have any retirement cushion at all, rely on 401K type plans dependent upon the vagaries of Wall Street. Mrs. Left and I have those kinds of investments in tax deferred accounts. It seems like a lot of money. But we still have to pay taxes on everything we withdraw, and in a few year we are required to begin withdrawals.
We also will collect from five defined benefit plans once we we are both retired.
The five are Social Security (2), Federal Defined Benefit (2), and State Defined Benefit (1). Except for the Social Security, this is the kind of post-retirement support that most Americans dare not dream of. Mrs. Left and I will qualify for Social Security because Social Security, which we will draw at nearly top rates. Our defined benefits come from vested service with employers among the handful that still continue such retirement largess. Some of the income we can rely upon in retirement is the result of planning, and some from an incomprehensible serendipity.
Here's one. About the time I plan to retire, I become both eligible and legally obligated to enroll in Medicare, America's tragically limited but extremely efficient singe-payer health system. A few months later, Mrs. Left achieves the same milestone. That's just dumb luck. I couldn't vote for LBJ back when the voting age was still 21, but I truly, madly, deeply hated the bastard for Viet Nam and what it was doing to my generation. Yet, when Democratic majorities in Congress delivered Medicare, it was LBJ who proudly signed the law, enacting a dream dating back to the Truman Administration. LBJ went to Independence, Missouri for the signing and gave the 1st two Medicare cards to Harry and Bess Truman.
Another bit of luck is that we can underwrite the balances on our children's student loans with cheap, group life insurance under our fixed benefit plans. We promised our two kids a free four year ride at the best university they chose to attend. Both attended out of state flagship State universities, but not in states where we lived. We covered most of the expense from income and savings, but still face a six figure balance upon which we are paying off in the kid's names. Our pension plans let us purchase cheap group life insurance to pay off the balance if we croak too soon.
The vast majority of our fellow Americans can hardly dream of the kind of retirement security Mrs. Left and I hope to enjoy. Employer provided defined benefit retirement is becoming a faded memory:
Over the past few decades, employees fortunate enough to have employer-based retirement benefits have been shifted from defined benefit plans to defined contribution plans. We are now seeing the results of that grand experiment, and they are frightening. Recent and near-retirees, the first major cohort of the 401(k) era, do not have nearly enough in retirement savings to even come close to maintaining their current lifestyles.
According to the Center for Retirement Research at Boston College, the median household retirement account balance in 2010 for workers between the ages of 55-64 was just $120,000. For people expecting to retire at around age 65, and to live for another 15 years or more, this will provide for only a trivial supplement to Social Security benefits.
And that's for people who actually have a retirement account of some kind. A third of households do not. For these people, their sole retirement income, aside from potential aid from friends and family, comes from Social Security, for which the current average monthly benefit is $1,230.
This is only going to get worse as Republicans go after federal employees' retirement benefits, as military retirement gets slashed, states reign in pension spending and municipal bankruptcies in the age of no new taxes put the axe to city employees pensions.
I have many friends and acquaintances who are about my age. Too many of them have little or nothing set aside for their retirement, despite having worked hard their whole lives. In too many cases, hard working Americans who lived a lifetime playing by the rules, showing up and getting hard jobs done, will face retirement on nothing more than Social Security, maybe a few tax deferred dollars in a 401k and the equity, if any, in their home. These are educated, talented people doing useful jobs. They may have keep working until their health gives out, because what real choice do they have if they don't want to supplement their diet with cat food.
Mrs. Left and I aren't better, or smarter or harder working than these people. We will instead enjoy the retirement that is coming for us, reasonably prosperous, well fed, well sheltered, traveling, merely because we fell, mostly by luck, into that shrinking pool of lucky Americans who are the winners of American Retirement Lotto.
There is enough productivity in the American workforce to reward every worker with a secure retirement in return for a lifetime of effort and performance. The kind of retirement I will enjoy should be the rule, not the exception, in a nation supposedly founded upon a principle, among others, that provision should be made for the general welfare. We simply need to withhold the benefits of that productivity from the plutocrats and oligarchs, and by ending or reversing income inequality with progressive taxes, provide a secure and comfortable retirement to all. The best way to guarantee that this happens, is to expand, enlarge, increase and otherwise improve Social Security while legislatively obliging larger employers to establish proper defined benefits for retired workers. It is simply a matter of having the national political will to recognize the need and address it. Like all such paradigm changing social improvements in America, it will require, at least, Democratic majorities in both houses of Congress and a Democrat in the White House, with a filibuster proof Senate majority. Then, and only then, can we begin.