# Interesting Read re Retirement



## Canadian (Sep 19, 2013)

I read this article yesterday in the Financial Post:

http://business.financialpost.com/2013/09/23/retirement-crisis-in-america-77-year-old-flips-burgers-to-earn-in-a-week-what-he-used-to-make-in-an-hour/

I find this interesting because I bet his story isn't unique. I'm not sure there is an epidemic to come, per se, but it will be interesting to see the macro-implications of an aging population.

Despite the everlasting spew of financial planning articles surrounding having enough for retirement, this one in particular seems a bit more real. I use "real" in a sense that this is your typical citizen who follows a common financial path: work up the corporate ladder, pay down mortgage, send kids to post-secondary (if they are lucky). Maybe there's more to the story. Maybe he wasn't financially responsible or got caught up keeping up with the Joneses - but it goes to show that having a good job with decent pay doesn't necessarily mean you will be set up for a comfortable retirement.


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## HaroldCrump (Jun 10, 2009)

Canadian said:


> your typical citizen who follows a common financial path: work up the corporate ladder, pay down mortgage, send kids to post-secondary (if they are lucky).


It is (no longer) enough to _work up the corporate ladder, pay down mortgage, send kids to post-secondary_ to ensure a comfortable retirement.
Those days have been relegated to the wistful and idyllic pages of history.

Like the Alan Jackson song goes:

_a lotta front porch sittin',
tryin' to make a livin'
And workin' hard to get to heaven_

Doesn't work any more.
And IMO it is arguable whether it ever worked.
Perhaps it was always the guaranteed social security net (in the case of US) that created the impression of a safe and comfortable retirement.
Now that net is slowly being cut into pieces, it has exposed how inadequate personal retirements are.


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## Retiredguy (Jul 24, 2013)

I also read the article .... before I saw your post.

He sounds like a neat guy with a great attitude but why did he give his house proceeds to his kids? His article shows that government "forced" savings, CPP or the US - SS is so important. Most everyone will have some life events which will encourage them not to save at some point but when its taken off like taxes its not missed. At some point he will not be able to work and without his SS (1400 month I think it was) he would have next to nothing.


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## the-royal-mail (Dec 11, 2009)

Pretty scary stuff to read but as to whether or not that will result in any change in the financial behaviour of younger people is doubtful. I for one have found it extremely difficult to save anything for retirement. There are debts to pay, houses to furnish and buy, movers to pay, plus the families, cars, hyper inflation, energy prices, fees, fines, tolls, taxes and unexpected expenses along the way. The result in the article is not very surprising or unusual.


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## james4beach (Nov 15, 2012)

For most Canadians I think it's unrealistic to save enough for retirement at today's wages & costs of living. Even if you're saving a significant portion of your income and spending the bare minimum, it just won't be enough.

Something in the "system" is going to have to change dramatically for all of this to work out.


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## Canadian (Sep 19, 2013)

My two biggest (abstract) takeaways from the article were:

*1)* The importance of saving (from a young age and throughout life - even during those life events which discourage savings). This guy had a six-figure salary yet only had $90,000 in savings pre-financial crisis. I imagine that $90k was much less by the end of 2009 - at which time he would likely be drawing from his savings, realizing those paper losses. This really supports that mantra of "pay yourself first." It's great that his debts were paid and he could afford to put his kids through post-secondary, but he would likely have been in a much better situation had he "paid himself first" (based on the content in the article, I'm assuming he did not).

*2)* To reiterate a point in my original post - how many other Tom Palomes (to lesser extreme situations) are there? Variations of this scenario seem to be becoming more common (or we're just becoming more aware of it). If there is a retiree poverty crisis to come, it could have a huge impact on the economy. Baby boomers account for a large part of the current North American population. Maybe there's another real estate sell-off to come as retirees sell their houses to live off the proceeds. Also, if consumer spending were to decrease due to such circumstances, unemployment could be back on the rise.


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## james4beach (Nov 15, 2012)

If real estate starts declining, the country's retirees are screwed.

This should give you some insight into why the central bank and government have been so focused on keeping the real estate bubble inflated (generous CMHC policies, near zero interest rates, etc). Same story in the USA and again, that explains their activities too... like the Federal Reserve buying mortgage bonds.

It's all about keeping real estate inflated. I just worry it won't last long enough.


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## Canadian (Sep 19, 2013)

james4beach said:


> If real estate starts declining, the country's retirees are screwed.


It's a bit of a self-fulfilling prophecy. Retirees (or home/property owners in general) who depend on the equity in their home/property are likely to sell once they think that real estate prices will decline. I emphasize think because this is the beginning of the prophecy. More sellers than buyers in the market - laws of supply and demand suggest that real estate prices will drop. This will trigger more home/property owners to lock in their remaining equity by also selling their homes. One could suggest there will be a "bottom" for prices - i.e., lower prices attracting more buyers to the market. The effect that North American demographics have here, though, is that there will likely be more retirees and the like selling than there will be buyers in the market.


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## Spudd (Oct 11, 2011)

james4beach said:


> For most Canadians I think it's unrealistic to save enough for retirement at today's wages & costs of living. Even if you're saving a significant portion of your income and spending the bare minimum, it just won't be enough.
> 
> Something in the "system" is going to have to change dramatically for all of this to work out.


I don't know why you think so. Let's say you have household income of 80k, taxes are 20k, leaving you 60k. If you spend 30k/year you can save 30k/year which means you will have enough to retire after 25 years of work (based on a 4% withdrawal rate).


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## Spudd (Oct 11, 2011)

I thought more about my post above and I guess that spending only 30k/year would be hard during hte mortgage paydown phase. So you might have to work 30-35 years instead. But I still maintain it's doable.


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## the-royal-mail (Dec 11, 2009)

These economics go out the window when middle class people are buying $350-640K houses and pay record high property taxes in cities. Plus have to keep up with all the latest ewaste. How can they possibly save? This is a far more fundamental issue than simply cutting cable and takeout meals.


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## NorthKC (Apr 1, 2013)

^ That's exactly what I thought when I first read the article yesterday. Sometimes, renting is better or living out in the boonies. As long as people keep buying houses at record prices, we will always have this problem.


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## HaroldCrump (Jun 10, 2009)

^ Except...that is not what this guy did.
He did not buy an over-priced house (at least it doesn't seems so).
Did he buy a lot of crap and "ewaste"? We don't know, but does not seem so.

He did pay for his kids' education.

He did have a few tragedies along the way.

Perhaps he donated away his retirement to his kids in the form of education and gifts.


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## sags (May 15, 2010)

People with good jobs will clue in.................

Never quit your well paid job.

The company can no longer escort you out the door at the mandatory retirement age of 65, regardless of how little mobility you have left in your wonky knees. They will have to "accommodate" you now.

If you develop a little dementia, and forget where you put "those vitally important files", don't worry about it. It is a normal part of aging.

Stay on the job and enjoy the highest pay, maximum vacation time, and best benefits the company has to offer.

If you aren't feeling all that spry............just call in sick. See your doctor and get a few weeks off to recuperate. Maybe a couple of months in the Arizona sun will be just the cure for that arthritic shoulder. Come back when you feel better and ready to go.

For any serious health problems...........there is always long term disability benefits.

Even better.........if you hurt yourself at work, even in the slightest way.......workers compensation payments are standing at the ready for you to collect.

Why quit a good job with all the perks...........to flip burgers at minimum wage?

And when people do clue in.................guess what employers..............you got what you asked for.


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## HaroldCrump (Jun 10, 2009)

sags, what you are describing is essentially a diabolical scheme for ripping off employers.
You are asking older workers to game the system by pretending to be sick, tired, disabled every so often and take advantage of employer-paid health plans and short term disability insurance.

Basically, be effectively "retired", but still get paid as a full-time employee.

Like this couple:

*A 62-year-old man who bravely dragged a shark away from children at an Australian beach has been fired from his job at a British charity because he had claimed to be on sick leave.*
_Paul Marshallsea and his 56-year-old wife, Wendy, were on leave from the Pant & Dowlais Boys & Girls Club in Wales for "work-related stress" in January, when he was spotted on a video grabbing the shark in shallow water as it approached the children and pulling it in the other direction._

http://news.yahoo.com/blogs/sideshow/man-shark-wrestle-video-fired-155745529.html

And what do you mean by : _guess what employers..............you got what you asked for_?
How are employers asking for being taken advantage of?

Is this what most older workers are doing these days?


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## Canadian (Sep 19, 2013)

I have to say I agree with Harold. I am not fond of abuse or exploitation of systems with good intentions. Just cause it can be done and others do it, doesn't mean it's ok to do.

@sags - It's not a matter of _keeping_ your best job. It's about adequate financial planning. Having a six- or seven-figure salary during your working years doesn't mean much if you don't save enough for the most basic retirement. People are living well into their 80s and 90s - sometimes even longer. Do you really think a company in today's environment will keep you around that long or give you a severance package that will last you 10, 20+ years?


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## sags (May 15, 2010)

It would be pretty difficult for a company to get rid of an employee.........when there is no mandatory retirement age. They would have to prove the dismissal was for just cause. It would be even more difficult to rid themselves of a significant number of similar employees.

Governments were lobbied hard by lobby groups for big business, to eliminate the mandatory retirement age. Unions were by and large opposed to the idea and preferred to focus attention on better retirement benefits for workers.

The theory was that by removing a legal impediment to working past age 65, there would be less pressure on employers to provide adequate retirement benefits for their employees.

"Oh well, you can always work longer" is a pretty standard "option" offered by financial planners and right wing lobby groups these days..........as a substitute for an expanded CPP or DB retirement plans.

Would older employees be gaming the system.........oh, you bet they would.

They would be using the tools that are available to them and making a business decision for their own lives, just as companies do all the time.

Should employees with a dearth of retirement money...........quit and take one for the team?


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## Eclectic12 (Oct 20, 2010)

HaroldCrump said:


> It is (no longer) enough to _work up the corporate ladder, pay down mortgage, send kids to post-secondary_ to ensure a comfortable retirement.
> 
> Those days have been relegated to the wistful and idyllic pages of history ...


Has it ever been enough?

I can recall my dad talking about starting teaching in the late fifties/early sixties where his incentive to save for retirement was noticing how many retired people were picking up part time shifts to make their modest retirement ends meet.


As for social security - I was under the impression that it was providing the base means instead of a comfortable retirement. Something many I've observed, ignore when the income is good.


Cheers


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## Eclectic12 (Oct 20, 2010)

Canadian said:


> My two biggest (abstract) takeaways from the article were:
> 
> *1)* The importance of saving (from a young age and throughout life - even during those life events which discourage savings). This guy had a six-figure salary yet only had $90,000 in savings pre-financial crisis ...


That's part of the problem ... both my brother and a house mate made really good money as part of summer jobs during university but either thought their income was "average" so that it would keep on rolling in or thought "it's way to early to save for retirement compared to the satisfaction from a kick-*** stereo".




Canadian said:


> ... *2)* To reiterate a point in my original post - how many other Tom Palomes (to lesser extreme situations) are there? Variations of this scenario seem to be becoming more common (or we're just becoming more aware of it) ...


Is this really all that new? 

As I say, my dad's incentive to save was the retired people similar to Tom Palomes, who were doing what work they could find to help fund their retirement.


Cheers


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## Canadian (Sep 19, 2013)

sags said:


> It would be pretty difficult for a company to get rid of an employee.........when there is no mandatory retirement age. They would have to prove the dismissal was for just cause.


I wouldn't necessarily say they are "fired." In the corporate world, however, it's common for older senior staff to basically be bought out to make room for the up-and-coming junior staff. They are offered a severance package that looks quite desirable at the time, but is worth very little in comparison to the present value of future wages if the employee had stayed in that job.

"Budget cuts" are another way a company can easily terminate an employee. You don't need just cause for that. There was a pretty big head count reduction at my firm this summer - a firm that does well - and strong performers were let go with minimum severance.



sags said:


> Should employees with a dearth of retirement money...........quit and take one for the team?


Part of the point I've been making throughout my posts is that this could be avoided with proper financial planning.


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## HaroldCrump (Jun 10, 2009)

sags said:


> Governments were lobbied hard by lobby groups for big business


And they were not lobbied to by big union groups :rolleyes2:
There is a constant see-saw in the balance of power between big business and big union - it just depends on which one is the flavor of the year or decade.



> to eliminate the mandatory retirement age. Unions were by and large opposed to the idea and preferred to focus attention on better retirement benefits for workers.


That argument is nonsense and unethical - just typical of unionism.
People should be free to work and retire when they choose to.

If a 75 year old wants to work - for whatever reason - they should be allowed to.
If a 45 year old wishes to retire (like our own Jon_Snow) - they should be allowed to.
If there is a mandatory maximum retirement age, well then, there should also be a mandatory minimum working age.

OK, fine, so let's legislate a maximum retirement age of 68 and a minimum retirement age of 67 - fair game?

Anyhow, I see what you meant by calling in sick half the time in lieu of retiring.
This report came out today:

*The Canadian economy lost an estimated $16.6 billion last year due to absenteeism, according to a study by the Conference Board of Canada*

http://www.thestar.com/business/eco...eeism_cost_canada_lost_166_billion_study.html

^ So you ought to be happy - your plan is actually already coming true.

Not surprisingly at all :

_It also found differences among those who work in the public sector, with the average number of absences coming in at 12.9 days, compared to an average of 8.2 days for those employed in the private sector.
Unionized workers also had a higher absenteeism rate of 13.2 days, compared with 7.5 days for non-unionized workers._

Lastly, I hope you realize that the "employers" that you are asking people to nonchalantly screw over are, in many cases, small and medium scale business owners.
Not some greedy corporation being run by medieval robber barons.
Many people are employed by small family-run businesses or individual entrepreneurs.
Yeah, all business owners are evil and let us just screw them over - that portends very well for a safe and secure retirement.


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## nortel'd (Mar 20, 2012)

HaroldCrump said:


> Unionized workers also had a higher absenteeism rate of 13.2 days, compared with 7.5 days for non-unionized workers.[/I]
> QUOTE]
> 
> I am getting ready to retire after 30 years from my well paid unionized job with 525 sick days in the bank. That works out to 2.5 days per year. And I do not feel at all guilty collecting that sick-leave-gratuity worth 1/2 years pay. A job well done. :tickled_pink:


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## Daniel A. (Mar 20, 2011)

It may surprise some but the majority of working people have no idea what they have for pensions. I've talked over the years to some very bright people that knew little about pensions they have been so focused on today that they never have thought much about the issue.

Given that the majority of Canadians only have CPP & OAS there will be many stories down the road of people that find out at to late a point.

I'm lucky I have good pensions and have been retired since age 56 .
I just recently started working again for the next six weeks before I go to the Baja because it offered me the opportunity to get in shape after doing very little for the past 3.5 years as well as pay for my winter place. The other guy's working on this crew work out of necessity so it really is an experience for me.
The work is physical I had no idea how much I had let myself slip in retirement.

I may work again next March & April when back if asked, a chance to learn some new skills, try new things.
Pay wise much like the news story what I make in a week I use to get in less than a day but I am having fun.


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## Eclectic12 (Oct 20, 2010)

sags said:


> People with good jobs will clue in..................


Will they?

I'm not so sure given the number I know who are either living pay cheque to pay cheque or shuffling debt between three low interest CC's instead of dealing with their spending.




sags said:


> .... The company can no longer escort you out the door at the mandatory retirement age of 65, regardless of how little mobility you have left in your wonky knees. They will have to "accommodate" you now ... Stay on the job and enjoy the highest pay, maximum vacation time, and best benefits the company has to offer.


You must have worked for different companies than I have. 

I've seen workers declared "redundant" and less than a week later the company is advertising for a different title but the same responsibilities. Or those whose were jerked around by their manager, where the slightest deviation was written up with HR. 

Or if all else fails, there were those who were walked out the door and paid off (the more shrewd did not accept the standard buyout without verifying how good or bad it was).


That's ignoring the vindictive firing for calling a spade a spade where the employee was called back from a conference so that the employee could be fired plus given a bill for the conference as they hadn't completed the required service time after the conference for the company to pay for it.




sags said:


> If you aren't feeling all that spry............just call in sick. See your doctor and get a few weeks off to recuperate ... Come back when you feel better and ready to go.
> 
> For any serious health problems...........there is always long term disability benefits ...


Depends on the company ... some of the companies I've worked for have third parties "evaluating" the employee's progress, when they return to work and what work is "equivalent". In one case, the third party was badgering the employee repeatedly to return to work *before* the narcotics from the surgery had worn off.


Like so many other things ... YMWV.


Cheers


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## Eclectic12 (Oct 20, 2010)

HaroldCrump said:


> ... If a 75 year old wants to work - for whatever reason - they should be allowed to.
> If a 45 year old wishes to retire (like our own Jon_Snow) - they should be allowed to.


Of course this assumes the 75 year old has management that supports this instead of laying off or forcing out older workers or there are in demand skills in play or self-employment involved.
Similarly, the 45 year old needs to have something in place that supports the level of their needs.







HaroldCrump said:


> ... Anyhow, I see what you meant by calling in sick half the time in lieu of retiring.
> This report came out today:
> 
> *The Canadian economy lost an estimated $16.6 billion last year due to absenteeism, according to a study by the Conference Board of Canada*
> ...


I'm not sure there's enough detail to come to this conclusion.

The insurance company I worked for years ago in IT started with a low absenteeism rate but when management became erratic, both the absenteeism as well as the turnover rates skyrocketed (turnover went from about 5% to 45% - though IT was much better than one of the other departments, which experienced 92% in one month).


Cheers


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## Daniel A. (Mar 20, 2011)

Many companies today will notice excessive time away sick and demand that the employee honor their contractual obligation.
All a company need show is over a set amount of time the employee has not done what they contracted for and show hardship on the business.


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## HaroldCrump (Jun 10, 2009)

Eclectic12 said:


> Of course this assumes the 75 year old has management that supports this instead of laying off or forcing out older workers or there are in demand skills in play


Yes, of course - I am not advocating a forced employment model, neither a forced retirement model.
I am sure there are many 75 yr. olds that have invaluable skills and experience that can command high levels of compensation.



> Similarly, the 45 year old needs to have something in place that supports the level of their needs.


Of course.
The tax payers should not have to pay for early retirements, which is the case currently in many countries.
Not at 45, but not too far either at 55 or so in many countries, incl. ours.


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## HaroldCrump (Jun 10, 2009)

nortel'd said:


> I am getting ready to retire after 30 years from my well paid unionized job with 525 sick days in the bank. That works out to 2.5 days per year. And I do not feel at all guilty collecting that sick-leave-gratuity worth 1/2 years pay. A job well done.


You just proved that the conclusions of the study are correct.
Also, it is clear that the so-called "sick-leave" is simply another form of (tax-free) compensation.

You are going to be taxed on that sick pay, right?
Or is it tax free?
If it is taxable income, why did you choose to accumulate it instead of taking it every year?

It seems that many union contracts have so much time-off written into them (incl. sick days) that employees get bored out of their minds being away from work.
It is basically a perpetual semi-retirement, innit?


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## Eclectic12 (Oct 20, 2010)

HaroldCrump said:


> Yes, of course - I am not advocating a forced employment model, neither a forced retirement model.
> I am sure there are many 75 yr. olds that have invaluable skills and experience that can command high levels of compensation ...


I'm not so sure ... I know of several in their late fifties and early sixties who were cut loose by the previous employer that had challenges switching to other employers. Without a skill that's in demand, most companies will prefer hiring younger workers.

So part of the question is how viable is the idea of 75 yr. olds working a reasonable or high paying job?


Cheers


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## HaroldCrump (Jun 10, 2009)

Eclectic12 said:


> I know of several in their late fifties and early sixties who were cut loose by the previous employer that had challenges switching to other employers. Without a skill that's in demand, most companies will prefer hiring younger workers.


That sounds logical, too.
For run-of-the-mill, ho-hum skills of course employers will be looking to reduce the cost basis for services.
You mentioned IT in the post above - those are usually the first jobs to get outsourced, right?
So it stands to reason that without differentiating skills, yeah, it would be hard to find suitable jobs at advanced age.

If you are hinting that there is an age bias at workplaces, of course there is. It's rampant.
What else is new.


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## sags (May 15, 2010)

Regarding sick days, vacation time and benefits.........aren't those kinds of benefits the promised reward for productivity in a successful free market capitalist system?

Geez Louise...............we should have 20 hour work weeks by now............not 50 hour work weeks.

People have more time off the job............more people have jobs.........unemployment solved.


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## Four Pillars (Apr 5, 2009)

The tone of this thread is that there is a retirement crisis and the person in the article is an example. 

Assuming you have enough money to get by, retirement is what you want it to be. From the following paragraph,



Tom Palome said:


> Palome, who said his jobs keep him active and learning new things, could survive without working. He receives US$1,200 from Social Security and a US$600 a month pension from his last corporate job. Still, his US$1,400 in monthly wages allows him to bolster his savings and provides for some extras. He goes to the theatre, pays for plane tickets to visit his children and grandsons and takes occasional vacations.


it's clear to me that a) He can easily get by without working, so he's not 'forced' to work. It's his choice. There is no crisis here or anything close to one. b) He didn't save enough to fund the type of retirement or old age that he apparently wants. Again - that was his choice. Or more likely his choice not to know that he had to save more.

It also mentions that he gave away the house proceeds. I'm sorry, but when you give away what money you have - you can't then complain about not having enough money. 

He's lucky that he's healthy enough to keep working to fund the extras in his life. I'm just guessing here, but from the tone of the article, it seems that he enjoys working. Sounds like a great guy to me, even if he's not the best financial manager.


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## HaroldCrump (Jun 10, 2009)

sags said:


> Regarding sick days, vacation time and benefits.........aren't those kinds of benefits the promised reward for productivity in a successful free market capitalist system?


Vacation and benefits - sure, but not sick time.
How is sick time a "reward" for productivity?
If unionized public sector workers are so productive, why are they sick all the time?



> People have more time off the job............more people have jobs.........unemployment solved.


So we can just hire more people to dig ditches and fill them up?
That will solve unemployment too.
Apparently, it even worked once !


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## Nemo2 (Mar 1, 2012)

HaroldCrump said:


> So we can just hire more people to dig ditches and fill them up?
> That will solve unemployment too.
> Apparently, it even worked once !


And 'pay' them in scrip! :chuncky:


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## HaroldCrump (Jun 10, 2009)

Four Pillars makes a very important point.

The title of the news article says : _77-year-old earns in a week what he used to make in an hour_
Why is that wrong?
Where does it say that after retirement, one must continue making the same hourly wage?
How is that "retirement" then?

However, that model does indeed exist in the public sector where pension benefits are structured in a way that a lifer employee continues receiving the same take-home pay post retirement as pre-retirement.
When lifetime defined benefit pensions are combined with CPP, OAS, and age credits, it is not uncommon for a retd. public sector worker to have the same net post-retirement income as their peak working years.


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## My Own Advisor (Sep 24, 2012)

If real estate starts declining, and the country's retirees are betting on selling their nest to fund retirement, agreed they are screwed.

This is why RE is only one asset to consider in a portfolio and including your house, it's not a great one at that since you have to live somewhere. 

For 60-year-olds on a pension paying a 6-figure mortgage in retirement, this could get ugly.


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## Four Pillars (Apr 5, 2009)

HaroldCrump said:


> The title of the news article says : _77-year-old earns in a week what he used to make in an hour_
> Why is that wrong?
> Where does it say that after retirement, one must continue making the same hourly wage?
> How is that "retirement" then?


Which leads to the question - "why did he stop working?". He (or the author) try to make it sound like his original $90k portfolio was enough, but then it crashed down to $40k. Well, that's unfortunate, but there is no way a $90k portfolio is going to fund $1,400/month which he likes to have.


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## sags (May 15, 2010)

One of the key paragraphs in the article is this one...........

*When Cooper relocated from New Jersey to California, Palome didn’t want to uproot his family. So in 1980, when he was 44, he started a consulting company, with Cooper as his main client. He also did consulting for Sandoz Pharmaceuticals, Johnson & Johnson and others.*

Quitting a well paid job at 44..........and becoming self employed, is one of those life decisions that can crush a retirement.

I had to move to keep my job......to a small town I didn't want to live in. My wife quit her nursing job at the hospital and get a lesser paid job, because of the commute. We bought and sold homes in a stagnant market........so there was no windfall to be had there.

It cost us, but we wanted the pension from my work, and now we benefit from the decision.

There were a lot of fellow employees who had to make bigger sacrifices, moving into a motel with 5 other guys during the week and then driving home on weekends. Some of them had moved around to 4 or 5 different locations and had only been home on weekends (when mandatory overtime wasn't scheduled) for years.

Unfortunately, it is the natural order of things, that we don't give retirement a whole lot of thought when making decisions along the way.

But for us, the prospect of a DB pension kept us going.


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## HaroldCrump (Jun 10, 2009)

An article with thoughts on bringing back mandatory retirement (US-specific)

_The elimination of mandatory retirement combined with the shift from defined-benefit pensions to 401(k) plans also means that retirement is a much less predictable and orderly event than it has been in the past._

http://blogs.marketwatch.com/encore/2013/09/25/should-we-bring-back-mandatory-retirement/?link=sfmw


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## Canadian (Sep 19, 2013)

I'm not opposed to the idea of mandatory retirement but the big questions is *when* to force retirement. It's so subjective. As an employer, I would honestly prefer a 65 year old employee who is more productive than a younger counterpart. That being said, I think that once an aged employee loses productivity, room should be made for younger, more productive employees. Having (unproductive) employees leech off payroll because they didn't properly plan for retirement is not good for the company, or overall economy - though, that's not to say that all young employees are productive.


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## Canadian (Sep 19, 2013)

sags said:


> Regarding sick days, vacation time and benefits.........aren't those kinds of benefits the promised reward for productivity in a successful free market capitalist system?


Vacation and benefits are one thing but sick days should not constitute a reward for productivity. Sick days are meant to be taken when one is recovering from an illness, and nothing more. The fact that some sectors/companies have been suckered into allowing unused sick days to be carrier forward year over year puzzles me. That's like following the logic that "because I didn't get sick this year, I'll probably get sick twice as much next year." It's great for those who are entitled to cumulative sick days - and maybe I'm just jealous - but I think it exposes the system to abuse.


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## HaroldCrump (Jun 10, 2009)

Canadian said:


> The fact that some sectors/companies have been suckered into allowing unused sick days to be carrier forward year over year puzzles me. That's like following the logic that "because I didn't get sick this year, I'll probably get sick twice as much next year."


It would be better to consider these so-called "sick days" as another form of deferred compensation.
Think of it as a "retirement bonus."
The main reason is to pull the wool over the eyes of the tax-payers that are paying for this benefit, and also to defer the liability for the organization far into the future (when some other govt. will be in office).

This must have seemed like a swell idea to the administrations that were in office in the late 1960s, 1970s and 1980s when many of these union contracts were "upgraded" to have these types of off-balance-sheet promises.
The boomers were entering the workforce and demographics were looking great.
Those retiring at that time did not have these benefits, therefore, the then administrations did not have to pay these types of benefits out.

Now the birds are coming home to roost.



> *but I think it exposes the system to abuse.*


Of course :rolleyes2:


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## Rusty O'Toole (Feb 1, 2012)

It soon became obvious that if you wanted to use your sick days you had to use them up before the end of the year. The sharpies did this, the suckers never used theirs and lost them.

Pretty soon everyone was using up their sick days at the end of the year. To keep from having empty offices they had to come up with a solution. But solving problems is hard. So instead they kicked the can down the road by allowing the sick days to accumulate, so the person could take them all right before retiring.

This postponed the problem and made it easy to manage. If old Joe or old Betsy is supposed to retire on August 1, and you know he or she has 90 sick days and 30 vacation days coming you make sure the new hire is on deck by the end of March.


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## My Own Advisor (Sep 24, 2012)

@Rusty,

I think this problem can be solved by calling these things "personal days". No sick days, etc. 

A company provides 3, 5, 7, 10 or whatever number of "personal days" every year as per employment terms and conditions and employees can use those days or hours in those days as they wish.

At the end of the year, you don't get paid out, they are simply gone. Use them, fine. Don't, don't complain the company didn't provide the benefits. Use the days for sick kids, sicks parents, sick self, leaving early from work a few Fridays per year, etc.

Simple.

I have no idea why more companies wouldn't do this, other than some organizations that can't because of friggin' unions.


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## HaroldCrump (Jun 10, 2009)

My Own Advisor said:


> I think this problem can be solved by calling these things "personal days". No sick days, etc.
> A company provides 3, 5, 7, 10 or whatever number of "personal days" every year as per employment terms and conditions and employees can use those days or hours in those days as they wish.
> ...
> I have no idea why more companies wouldn't do this, other than some organizations that can't because of friggin' unions.


That won't work, MOA, in a union infested public sector world.
Many people have no more than 10 vacation days, and 5 sick days (if they are lucky).
That is a total of 15 "personal" days.

Now, if union infested govt. jobs were to offer employees 25, 30 even 35 "personal" days (for similar job positions), the public would be up in arms.
Why should the tax payers pay for 25 - 35 personal days when most people get half that or less.

Therefore, those extra "personal" days are couched as "sick" days.

They are also a form of deferred compensation for the same reason.
It helps the government of the day keep labor peace, make unions happy, get their votes, and yet kick the can 30 years down the road.
Works out for everyone involved, innit nice?


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## My Own Advisor (Sep 24, 2012)

@Harold, 

I was hoping this would happen for the "union infested public sector" as well. 

Personal days are not the same as vacation days, that's a separate class.


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