Working till retirement is not a great plan

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Snowjob
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Working till retirement is not a great plan

Post by Snowjob »

I expect at some point (perhaps around 50, give or take a few years??) I will start to experience some sort of conscious or subconscious age discrimination in the work force. Like fellow board member Klangfool, I wouldn't bank on keeping ones current job and salary level till you reach a ripe old age of your choosing. I think its risk most people don't appreciate outside of this board. Below is an article I found on CNBC today showing the workforce transformation at IBM that reinforces this point to me.

https://www.cnbc.com/2018/03/22/cutting ... t-ibm.html
bloom2708
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Re: Working till retirement is not a great plan

Post by bloom2708 »

I agree.

Set yourself up so that by ~50 you don't NEED to keep making as much.

$0 or smaller mortgage, no car loans, no other consumer loans. Make it so it doesn't matter.

At 47, most "reductions in force" at my megacorp are 50 and over. When they cut and slice, they tend to cut the bigger salaries of long term (older) employers.

I am ready.
"We are here to provoke thoughtfulness, not agree with you." Unknown Boglehead
gotester2000
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Re: Working till retirement is not a great plan

Post by gotester2000 »

Snowjob wrote: Thu Mar 22, 2018 1:19 pm I expect at some point (perhaps around 50, give or take a few years??) I will start to experience some sort of conscious or subconscious age discrimination in the work force. Like fellow board member Klangfool, I wouldn't bank on keeping ones current job and salary level till you reach a ripe old age of your choosing. I think its risk most people don't appreciate outside of this board. Below is an article I found on CNBC today showing the workforce transformation at IBM that reinforces this point to me.

https://www.cnbc.com/2018/03/22/cutting ... t-ibm.html
Be FI and enjoy your work and life - people know the risk everywhere,they live in denial that it wont happen to them.
mega317
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Re: Working till retirement is not a great plan

Post by mega317 »

Agree. One very small, but conscious, part of my career choice was that I saw a lot of old people doing it which I took to indicate there wasn't a high rate of burnout and people weren't fired willy nilly at age 50.
https://www.bogleheads.org/forum/viewtopic.php?t=6212
smitcat
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Re: Working till retirement is not a great plan

Post by smitcat »

Snowjob wrote: Thu Mar 22, 2018 1:19 pm I expect at some point (perhaps around 50, give or take a few years??) I will start to experience some sort of conscious or subconscious age discrimination in the work force. Like fellow board member Klangfool, I wouldn't bank on keeping ones current job and salary level till you reach a ripe old age of your choosing. I think its risk most people don't appreciate outside of this board. Below is an article I found on CNBC today showing the workforce transformation at IBM that reinforces this point to me.

https://www.cnbc.com/2018/03/22/cutting ... t-ibm.html
We planed and transitioned to being self employed - it took a bot longer than we planned but were out of the 'typical' roles by early to mid 50's.
Hillview
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Re: Working till retirement is not a great plan

Post by Hillview »

See this in action where I work and as a mid 40s person it is concerning. All my future calculations are being done on an assumption that my salary will go DOWN in the next 10 years (which is not great). I think this is reality at least in the tech sector.
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Re: Working till retirement is not a great plan

Post by Sandtrap »

Had I not been self-employed, I'm sure I would've been "phased out" for "newer models" long ago.
Consider "self employment" and/or developing alternative income streams in the retirement transition.
j :D
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mptfan
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Re: Working till retirement is not a great plan

Post by mptfan »

bloom2708 wrote: Thu Mar 22, 2018 1:28 pm $0 or smaller mortgage,
I think it would be hard to get a mortgage smaller than $0.
8-)
KlangFool
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Re: Working till retirement is not a great plan

Post by KlangFool »

OP,

1) I am fighting a losing battle trying to wake people up that they are overly optimistic that they will be fully-employed until retirement age.

2) In most cases, younger professional at the 30s chooses to be "House Poor" and overpay for their houses. When they hit the 40s and faces their first major laid off, it is too late for them.

3) Then, we have folks that assume their retirement will be fully-funded since they will be continuously fully-employed over the next 20 to 30 years. They overpaid for their children's college education and take on the children's student loan. They are burned badly too.

4) Nothing that I said will change those people's mind until their first recession and first major laid off. But, then, it is too late for many of them.

5) The story repeats itself every recession.

KlangFool
smitcat
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Re: Working till retirement is not a great plan

Post by smitcat »

KlangFool wrote: Thu Mar 22, 2018 4:00 pm OP,

1) I am fighting a losing battle trying to wake people up that they are overly optimistic that they will be fully-employed until retirement age.

2) In most cases, younger professional at the 30s chooses to be "House Poor" and overpay for their houses. When they hit the 40s and faces their first major laid off, it is too late for them.

3) Then, we have folks that assume their retirement will be fully-funded since they will be continuously fully-employed over the next 20 to 30 years. They overpaid for their children's college education and take on the children's student loan. They are burned badly too.

4) Nothing that I said will change those people's mind until their first recession and first major laid off. But, then, it is too late for many of them.

5) The story repeats itself every recession.

KlangFool
While I agree with most of what you say it is not too late to take action "in your 40's".
It is not too late to take action in your 50's.
But it would require taking action.
Amphian
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Re: Working till retirement is not a great plan

Post by Amphian »

I think there is definitely truth to age discrimination and you hear about it a lot, so I was worried when I got laid off in January at 50+. It took me about two months to land a great job with a 20+% raise. I think it depends a lot on what you do, your location, the state of the economy, working hard to find a job, luck, etc. Most of my team was in some kind of management (IT Director, Project Manager, etc.) and they are still looking for work. I stayed in development (Software Engineer) partly because I have no interest in management and partly because having development skills helps to keep you employed. I also HATE looking for work, so I was very focused on getting it done.
KlangFool
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Re: Working till retirement is not a great plan

Post by KlangFool »

smitcat wrote: Thu Mar 22, 2018 4:26 pm
KlangFool wrote: Thu Mar 22, 2018 4:00 pm OP,

1) I am fighting a losing battle trying to wake people up that they are overly optimistic that they will be fully-employed until retirement age.

2) In most cases, younger professional at the 30s chooses to be "House Poor" and overpay for their houses. When they hit the 40s and faces their first major laid off, it is too late for them.

3) Then, we have folks that assume their retirement will be fully-funded since they will be continuously fully-employed over the next 20 to 30 years. They overpaid for their children's college education and take on the children's student loan. They are burned badly too.

4) Nothing that I said will change those people's mind until their first recession and first major laid off. But, then, it is too late for many of them.

5) The story repeats itself every recession.

KlangFool
While I agree with most of what you say it is not too late to take action "in your 40's".
It is not too late to take action in your 50's.
But it would require taking action.
smitcat,

1) With a huge mortgage and/or student loan while permanently unemployed or under-employed, there is no recovery.

2) The standard housing advice is to buy a house 3.5 times the household gross income.

KlangFool
smitcat
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Re: Working till retirement is not a great plan

Post by smitcat »

KlangFool wrote: Thu Mar 22, 2018 4:50 pm
smitcat wrote: Thu Mar 22, 2018 4:26 pm
KlangFool wrote: Thu Mar 22, 2018 4:00 pm OP,

1) I am fighting a losing battle trying to wake people up that they are overly optimistic that they will be fully-employed until retirement age.

2) In most cases, younger professional at the 30s chooses to be "House Poor" and overpay for their houses. When they hit the 40s and faces their first major laid off, it is too late for them.

3) Then, we have folks that assume their retirement will be fully-funded since they will be continuously fully-employed over the next 20 to 30 years. They overpaid for their children's college education and take on the children's student loan. They are burned badly too.

4) Nothing that I said will change those people's mind until their first recession and first major laid off. But, then, it is too late for many of them.

5) The story repeats itself every recession.

KlangFool
While I agree with most of what you say it is not too late to take action "in your 40's".
It is not too late to take action in your 50's.
But it would require taking action.
smitcat,

1) With a huge mortgage and/or student loan while permanently unemployed or under-employed, there is no recovery.

2) The standard housing advice is to buy a house 3.5 times the household gross income.

KlangFool
Yes there is , we are proof of that.
adamthesmythe
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Re: Working till retirement is not a great plan

Post by adamthesmythe »

It's a good plan if you can do it, and many (although not all) of us can.

Working until retirement even at a reduced salary is very worthwhile if you get health care included.
KlangFool
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Re: Working till retirement is not a great plan

Post by KlangFool »

smitcat wrote: Thu Mar 22, 2018 4:52 pm
KlangFool wrote: Thu Mar 22, 2018 4:50 pm
smitcat wrote: Thu Mar 22, 2018 4:26 pm
KlangFool wrote: Thu Mar 22, 2018 4:00 pm OP,

1) I am fighting a losing battle trying to wake people up that they are overly optimistic that they will be fully-employed until retirement age.

2) In most cases, younger professional at the 30s chooses to be "House Poor" and overpay for their houses. When they hit the 40s and faces their first major laid off, it is too late for them.

3) Then, we have folks that assume their retirement will be fully-funded since they will be continuously fully-employed over the next 20 to 30 years. They overpaid for their children's college education and take on the children's student loan. They are burned badly too.

4) Nothing that I said will change those people's mind until their first recession and first major laid off. But, then, it is too late for many of them.

5) The story repeats itself every recession.

KlangFool
While I agree with most of what you say it is not too late to take action "in your 40's".
It is not too late to take action in your 50's.
But it would require taking action.
smitcat,

1) With a huge mortgage and/or student loan while permanently unemployed or under-employed, there is no recovery.

2) The standard housing advice is to buy a house 3.5 times the household gross income.

KlangFool
Yes there is , we are proof of that.
Okay. Tell us your numbers and story.

KlangFool
JBTX
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Re: Working till retirement is not a great plan

Post by JBTX »

I was laid off right at 50. Been working contract gigs since. I have been pretty lax in job search as my DW has good income and reasonably secure position.

I’m about ready to jump back in full time, ideally if I got another 5 year run that would be good.

While I can’t be certain there is age discrimation, there are things that seem like I’d be a slam dunk for where I don’t even get a nibble. My guess is they prefer somebody with a 10-20 year more focused / career straight line background vs mine which takes some interesting turns.

Ultimately, we could survive if I never worked another day, but that isn’t optimal.
farmecologist
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Re: Working till retirement is not a great plan

Post by farmecologist »

In Personal Capital I have the retirement planner set up to "retire" at age 52...basically because of this reason ( I work at a megacorp ).

Only a few years to go!
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Artsdoctor
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Re: Working till retirement is not a great plan

Post by Artsdoctor »

KlangFool wrote: Thu Mar 22, 2018 4:00 pm OP,

1) I am fighting a losing battle trying to wake people up that they are overly optimistic that they will be fully-employed until retirement age.

2) In most cases, younger professional at the 30s chooses to be "House Poor" and overpay for their houses. When they hit the 40s and faces their first major laid off, it is too late for them.

3) Then, we have folks that assume their retirement will be fully-funded since they will be continuously fully-employed over the next 20 to 30 years. They overpaid for their children's college education and take on the children's student loan. They are burned badly too.

4) Nothing that I said will change those people's mind until their first recession and first major laid off. But, then, it is too late for many of them.

5) The story repeats itself every recession.

KlangFool
I don't think you're fighting a losing battle, I think you're doing great. Keep it up.

I approach it from a different angle because of my job as a doctor. People make all sorts of plans with the assumption that they'll continue working until 65, give or take. Some of the expenses throughout working life are laudable (kids' education, for example), but many are just a waste (leasing a nice car without even saving a cent comes to mind, especially in LA). There is an assumption that there will be plenty of time to save later.

The problem that I see is not necessarily the recession risk, but the health risk. People do get sick, as much as they'd like to ignore that. Some people can no longer work because of a disability, some people just can't work because they have an extremely long road of medical treatment in front of them, some people have a spouse that dies prematurely, etc., etc. All of these things happen with humbling frequency and will not have been part of many people's financial spreadsheets.

It is far, far better to go heavy on the saving stage early. If you work until much later, terrific. But there are way too many things that can happen between "now and then" to bank on a smooth ride.
Last edited by Artsdoctor on Thu Mar 22, 2018 5:07 pm, edited 1 time in total.
Amphian
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Re: Working till retirement is not a great plan

Post by Amphian »

KlangFool wrote: Thu Mar 22, 2018 4:50 pm 2) The standard housing advice is to buy a house 3.5 times the household gross income.
KlangFool
My gross x 3.5 would mostly not buy me a house here unless I was willing to move way out - and I make 3 times the average income for my area. I'm not willing to spend anywhere near that, and they don't make houses for singles (I don't need 3000 square feet and four bedrooms.), so I rent. The people I know who own houses bought into the system before the run-up at the turn of the century or during the recession when they bought a foreclosure.
Amphian
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Re: Working till retirement is not a great plan

Post by Amphian »

JBTX wrote: Thu Mar 22, 2018 5:02 pm While I can’t be certain there is age discrimation, there are things that seem like I’d be a slam dunk for where I don’t even get a nibble. My guess is they prefer somebody with a 10-20 year more focused / career straight line background vs mine which takes some interesting turns.
The advice I got on this was to minimize the turns and length. I had had five jobs when I got laid off - 3 C++ development jobs (about two years each), 1 web development job (8 years, self-employed, so a lot of individual contract work), and 1 JavaScript development job (8 years). The last two jobs had full info on my resume. The first three were on the second page with just company, location, and a sentence about what I did.
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Re: Working till retirement is not a great plan

Post by friar1610 »

KlangFool wrote: Thu Mar 22, 2018 4:50 pm
smitcat wrote: Thu Mar 22, 2018 4:26 pm
KlangFool wrote: Thu Mar 22, 2018 4:00 pm OP,

1) I am fighting a losing battle trying to wake people up that they are overly optimistic that they will be fully-employed until retirement age.

2) In most cases, younger professional at the 30s chooses to be "House Poor" and overpay for their houses. When they hit the 40s and faces their first major laid off, it is too late for them.

3) Then, we have folks that assume their retirement will be fully-funded since they will be continuously fully-employed over the next 20 to 30 years. They overpaid for their children's college education and take on the children's student loan. They are burned badly too.

4) Nothing that I said will change those people's mind until their first recession and first major laid off. But, then, it is too late for many of them.

5) The story repeats itself every recession.

KlangFool
While I agree with most of what you say it is not too late to take action "in your 40's".
It is not too late to take action in your 50's.
But it would require taking action.
smitcat,

1) With a huge mortgage and/or student loan while permanently unemployed or under-employed, there is no recovery.

2) The standard housing advice is to buy a house 3.5 times the household gross income.

KlangFool
I seem to recall that when I bought my first house in 1976 the guidance Was 2.5x although I don't recall if that was house price or mortgage.
Friar1610
Ostentatious
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Re: Working till retirement is not a great plan

Post by Ostentatious »

Any ideas on how to prepare if this happens? Self employment is good but how many of us have the skills to self employ?
Simple Simon
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Re: Working till retirement is not a great plan

Post by Simple Simon »

Surely everyone works till retirement- by definition?
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Gronnie
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Re: Working till retirement is not a great plan

Post by Gronnie »

I can't imagine spending much more than 1-1.5x income on a house. At 3.5x plus, doesn't that leave pretty much nothing to save for later?
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HueyLD
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Re: Working till retirement is not a great plan

Post by HueyLD »

Ostentatious wrote: Thu Mar 22, 2018 5:53 pm Any ideas on how to prepare if this happens? Self employment is good but how many of us have the skills to self employ?
After I got my first job out of college, I noticed that the company was doing all kinds of things to try to get rid of old timers. And many such old timers were struggling to stay employed because they couldn't afford to retire. As a result, they put up with a lot of abuse, including demotions, pay cuts, undesirable positions, etc.

So, I decided then to work as hard as possible and to live well below my means. My goal then was to retire by 50 or before I was no longer needed whichever came first.

And sure enough, stuff happened and the last company I worked for was acquired and everyone in my department was laid off. However, I was able to retire on schedule, though involuntarily, and had saved enough money to do so. But many of my coworkers didn't have such a luxury because they spent the bulk of their earnings on wants, not just needs.

YMMV.
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Ged
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Re: Working till retirement is not a great plan

Post by Ged »

friar1610 wrote: Thu Mar 22, 2018 5:18 pm
I seem to recall that when I bought my first house in 1976 the guidance Was 2.5x although I don't recall if that was house price or mortgage.
I bought my first house back then too. It was size of mortgage. Interest rates were triple what they are now which is a factor too. I was house poor for a couple of years, but inflation then was rampant so my salary increased pretty quickly. The effect of inflation of housing price increasing was a factor in my deciding to buy then too. Nowadays with low inflation I think it's worse to buy a house at the edge. You are much less likely to get bailed out in the way I was.

I agree with the idea that post 50 there is a much greater chance of being laid off and suffering an income shock. It happened to me. You really do need to realize that life isn't a smooth progression and have personal as well as financial capital in reserve for such times.
KlangFool
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Re: Working till retirement is not a great plan

Post by KlangFool »

Ostentatious wrote: Thu Mar 22, 2018 5:53 pm Any ideas on how to prepare if this happens? Self employment is good but how many of us have the skills to self employ?
Ostentatious,

Save 1 year of expense every year.

KlangFool
bogglizer
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Re: Working till retirement is not a great plan

Post by bogglizer »

Simple Simon wrote: Thu Mar 22, 2018 5:56 pm Surely everyone works till retirement- by definition?
What if you die first?

The rule I was told by my mortgage lender is that they allow borrowers to spend no more than1/3 of income on housing. If you follow this rule for choosing your house cost, you end up having zero margin on living expenses. Something like 1/4 or less is more rational.

I was laid off at 50 from MegaCorp, along with a bunch of other old codgers. The local unemployment office guru told me that, since I was an engineer, I would get hired again within a month. Other people might take a year. She was right in my case. So, the secret to job security after 50 is to be an engineer in California.
JBTX
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Re: Working till retirement is not a great plan

Post by JBTX »

Ostentatious wrote: Thu Mar 22, 2018 5:53 pm Any ideas on how to prepare if this happens? Self employment is good but how many of us have the skills to self employ?
Best thing is put yourself in a position where you don’t need the job and you can survive without it for a while (save a lot, live modestly). Also, and this is just my personal opinion, but I would never want to be in a position where the entire family is dependent on one income for long periods of time due to a full time non working spouse.
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Re: Working till retirement is not a great plan

Post by corn18 »

KlangFool wrote: Thu Mar 22, 2018 4:00 pm OP,

1) I am fighting a losing battle trying to wake people up that they are overly optimistic that they will be fully-employed until retirement age.

2) In most cases, younger professional at the 30s chooses to be "House Poor" and overpay for their houses. When they hit the 40s and faces their first major laid off, it is too late for them.

3) Then, we have folks that assume their retirement will be fully-funded since they will be continuously fully-employed over the next 20 to 30 years. They overpaid for their children's college education and take on the children's student loan. They are burned badly too.

4) Nothing that I said will change those people's mind until their first recession and first major laid off. But, then, it is too late for many of them.

5) The story repeats itself every recession.

KlangFool
While this may be your life experience and opinion, I have three friends that are over 50 and hoping for the call to come down to HR. I'm getting to that point, too.
Don't do something, just stand there!
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Snowjob
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Re: Working till retirement is not a great plan

Post by Snowjob »

KlangFool wrote: Thu Mar 22, 2018 4:50 pm 2) The standard housing advice is to buy a house 3.5 times the household gross income.
KlangFool

Personally I'm a little leery of 3.5x gross. I think 2.5x gross is probably the most I would be comfortable with and for some reason that rings a bell in my mind. That said, I think if I were to buy a house I'd probably cut a lot of excess savings and try to pay down the mortgage as fast as possible. I think mortgages were much shorter 100 years ago and given I live in a high tax state, at some point the mortgage interest deduction doesn't really matter to me anymore so might as well just pay it off and sleep better at night
Simple Simon
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Re: Working till retirement is not a great plan

Post by Simple Simon »

bogglizer wrote: Thu Mar 22, 2018 6:13 pm What if you die first?
Ha, good point.

Reminds me of the quote in "your money or your life", it goes something like this:

At some point, everyone will (A) stop working for money, and (B) die. If A happens before B, it is called retirement. :D
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Abel
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Re: Working till retirement is not a great plan

Post by Abel »

I personally found that when ageism hit me professionally, it was a useful thing to go with it. Of course it's miserable if you're still all competent as ever, and maybe you still are. In my case it took a couple years to see and accept that the younger guys (tech is predominantly male) were faster and more interested in hoovering the latest new thing and using it at work. It's been a bitter pill to swallow. The plus side is, what a relief to not be so very driven and seeking to optimize my work life.
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Re: Working till retirement is not a great plan

Post by bling »

bogglizer wrote: Thu Mar 22, 2018 6:13 pm I was laid off at 50 from MegaCorp, along with a bunch of other old codgers. The local unemployment office guru told me that, since I was an engineer, I would get hired again within a month. Other people might take a year. She was right in my case. So, the secret to job security after 50 is to be an engineer in California.
or in other words, be in demand.

-------------

when i read articles like this, i can't help but think that because i'm in my 30s and i can't fathom it ever happening to me, or whether all of these older folks just got complacent and became unemployable -- probably a bit of both.

i have a colleague who looks for a job every year, not because he needs to, or wants to leave his job, but to a) get a read on the local job market, b) keep his interviewing skills up to date, and c) knows where he stands in terms of his salary vs the market rate.

the fact of the matter is that if you're 50, commanding a salary of say, $100k, are you actually 3x faster/better than the fresh grad out of school they can hire for $30k? is your 20 years of experience the same year of experience 20 times or did you grow and do more challenging things each year?

at my company, all of the older folks are there because they've proven they can consistently provide value for the firm and drive the business forward. the ones who can't don't last because they are competing against fresh grads that can work 10 hours a day for far less pay.
KlangFool
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Re: Working till retirement is not a great plan

Post by KlangFool »

bling wrote: Thu Mar 22, 2018 6:35 pm
the fact of the matter is that if you're 50, commanding a salary of say, $100k, are you actually 3x faster/better than the fresh grad out of school they can hire for $30k? is your 20 years of experience the same year of experience 20 times or did you grow and do more challenging things each year?
bling,

1) I consistently solved the problem that cannot be solved by others in my company and our suppliers over 6 months to 1 years. I get it done in 1 to 2 months. But, that does not stop my laid off.

2) The irony of the whole affair is when I was laid off, I received the most employee awards for that year.

<<because i'm in my 30s and i can't fathom it ever happening to me,>>

3) Your time will come. There are only 2 choices: grow old or ???.

KlangFool
bogglizer
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Re: Working till retirement is not a great plan

Post by bogglizer »

bling wrote: Thu Mar 22, 2018 6:35 pm the fact of the matter is that if you're 50, commanding a salary of say, $100k, are you actually 3x faster/better than the fresh grad out of school they can hire for $30k? is your 20 years of experience the same year of experience 20 times or did you grow and do more challenging things each year?

at my company, all of the older folks are there because they've proven they can consistently provide value for the firm and drive the business forward. the ones who can't don't last because they are competing against fresh grads that can work 10 hours a day for far less pay.
If you are 50 but do work that can be done by a 30 year old, then you should rightly fear for your job. The trick is to make sure that your company sees any added value that you provide to be worth the extra cost. This is oddly more important than actually providing more value. People move up into management because management itself highly values this non-value-added activity.
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Re: Working till retirement is not a great plan

Post by Kenkat »

corn18 wrote: Thu Mar 22, 2018 6:22 pm
KlangFool wrote: Thu Mar 22, 2018 4:00 pm OP,

1) I am fighting a losing battle trying to wake people up that they are overly optimistic that they will be fully-employed until retirement age.

2) In most cases, younger professional at the 30s chooses to be "House Poor" and overpay for their houses. When they hit the 40s and faces their first major laid off, it is too late for them.

3) Then, we have folks that assume their retirement will be fully-funded since they will be continuously fully-employed over the next 20 to 30 years. They overpaid for their children's college education and take on the children's student loan. They are burned badly too.

4) Nothing that I said will change those people's mind until their first recession and first major laid off. But, then, it is too late for many of them.

5) The story repeats itself every recession.

KlangFool
While this may be your life experience and opinion, I have three friends that are over 50 and hoping for the call to come down to HR. I'm getting to that point, too.
Each year I put in the bank puts me that much closer to hoping for a package to come rolling along. Once I turn 55 in January I will have even more options.

There is a sense of peace from knowing that you have probably saved enough to be ok, even if the best course of action is to keep working a few more years.

It also doesn’t hurt that I know where all the bodies are buried at work. However, there is always the risk that new management comes in and doesn’t realize that and cuts you loose anyway.
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Re: Working till retirement is not a great plan

Post by KlangFool »

bogglizer wrote: Thu Mar 22, 2018 6:53 pm
The trick is to make sure that your company sees any added value that you provide to be worth the extra cost. This is oddly more important than actually providing more value. People move up into management because management itself highly values this non-value-added activity.
bogglizer,

1) It is not your company. You do not own the company.

2) The company may not survive. Your career needs to last longer than any single employer.

<<People move up into management because management itself highly values this non-value-added activity.>>

3) Management is political. If your boss is gone, you will be gone too regardless of how good you are. You are not part of the new team.

4) Do not be naive. Your employer's interest is not exactly aligned with your own interest.

KlangFool
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corn18
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Re: Working till retirement is not a great plan

Post by corn18 »

bogglizer wrote: Thu Mar 22, 2018 6:53 pm
If you are 50 but do work that can be done by a 30 year old, then you should rightly fear for your job. The trick is to make sure that your company sees any added value that you provide to be worth the extra cost. This is oddly more important than actually providing more value. People move up into management because management itself highly values this non-value-added activity.
That's the path I have taken to maintain value to my company. Director, VP, President. Although my professional network is something no 30 year old could bring to the table and out business develop me. I'm in the aerospace/defense world. Seems to be a lot of tech related folks on here. Don't know much about that.
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Normchad
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Re: Working till retirement is not a great plan

Post by Normchad »

I agree while heatedly with the above. In today’s world, I think age discrimination is largely a misnomer. Unless there is a pension at play, what motivation does an employer have to get rid of you due to age? Other than your salary, what do they save from letting you go.

We don’t like to talk about it, but a lot of older workers lose their job because they’re just not that good relative to their pay. I’m a well paid SW engineer at 50+. I know I’m not as good as I used to be. I’ve got a lot of great experience, which counts for something, but there are limits.

These new college grads are very smart, have the latest skills, and work for less. If we were purely looking at numbers, I’d pick them over me every time. For some reason, people just aren’t willing to admit that people’s productivity declines with age, and as pay rises, it creates a yawning disparity between their pay and their worth.

There just aren’t many great SW developers in their 50s and beyond. If they were worth their salary, there would be no reason to let them go.

I think it would be great if companies could adjust pay to always catch a persons actual value. So your pay would rise to a peak around 45, then start declining. In this way, there would be no reason to let older works go, because they would always be earning their keep.
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Re: Working till retirement is not a great plan

Post by KlangFool »

bling wrote: Thu Mar 22, 2018 6:35 pm
fresh grads that can work 10 hours a day for far less pay.
bling,

How long can the fresh grads last if they work 10 hours per day? They will not have time to learn anything new. If and when what they learn from college is no longer the latest, they will be replaced by another fresh batch of fresh grads.

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dwickenh
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Re: Working till retirement is not a great plan

Post by dwickenh »

KlangFool wrote: Thu Mar 22, 2018 4:50 pm
smitcat wrote: Thu Mar 22, 2018 4:26 pm
KlangFool wrote: Thu Mar 22, 2018 4:00 pm OP,

1) I am fighting a losing battle trying to wake people up that they are overly optimistic that they will be fully-employed until retirement age.

2) In most cases, younger professional at the 30s chooses to be "House Poor" and overpay for their houses. When they hit the 40s and faces their first major laid off, it is too late for them.

3) Then, we have folks that assume their retirement will be fully-funded since they will be continuously fully-employed over the next 20 to 30 years. They overpaid for their children's college education and take on the children's student loan. They are burned badly too.

4) Nothing that I said will change those people's mind until their first recession and first major laid off. But, then, it is too late for many of them.

5) The story repeats itself every recession.

KlangFool
While I agree with most of what you say it is not too late to take action "in your 40's".
It is not too late to take action in your 50's.
But it would require taking action.
smitcat,

1) With a huge mortgage and/or student loan while permanently unemployed or under-employed, there is no recovery.

2) The standard housing advice is to buy a house 3.5 times the household gross income.

KlangFool
I have not heard the 3.5 times rule as standard advice for housing.
I am guessing it would apply to a HCOL area?
The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.” | — Warren Buffett
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Re: Working till retirement is not a great plan

Post by KlangFool »

Normchad wrote: Thu Mar 22, 2018 7:13 pm
I agree while heatedly with the above. In today’s world, I think age discrimination is largely a misnomer. Unless there is a pension at play, what motivation does an employer have to get rid of you due to age? Other than your salary, what do they save from letting you go.
Normchad,

<<In today’s world, I think age discrimination is largely a misnomer. >>

So, what do you call when the employer does not hire qualify applicant because of their age?

If it is due to race, we call that racial discrimination. If it is due to age, we should call it as age discrimination.

<<Unless there is a pension at play, what motivation does an employer have to get rid of you due to age? Other than your salary, what do they save from letting you go. >>

Health care cost. Vacation days and so on.

Don't worry. Your days will come too.

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triceratop
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Re: Working till retirement is not a great plan

Post by triceratop »

KF,
What is your advice to someone whose career is just beginning, and saves 33-40% of a very modest gross salary?

If they were training in a specialized field would this change your advice in either direction?

What if they do not know the direction their life (family, career, location, employability) will take or their future spending levels?

Regards,
triceratop
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dknightd
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Re: Working till retirement is not a great plan

Post by dknightd »

Snowjob wrote: Thu Mar 22, 2018 1:19 pm I expect at some point (perhaps around 50, give or take a few years??) I will start to experience some sort of conscious or subconscious age discrimination in the work force. Like fellow board member Klangfool, I wouldn't bank on keeping ones current job and salary level till you reach a ripe old age of your choosing. I think its risk most people don't appreciate outside of this board. Below is an article I found on CNBC today showing the workforce transformation at IBM that reinforces this point to me.

https://www.cnbc.com/2018/03/22/cutting ... t-ibm.html
Media and marketing. Ignore it.
If you value a bird in the hand, pay off the loan. If you are willing to risk getting two birds (or none) from the market, invest the funds. Retired 9/19. Still working on mortgage payoff.
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Re: Working till retirement is not a great plan

Post by KlangFool »

triceratop wrote: Thu Mar 22, 2018 7:36 pm KF,
What is your advice to someone whose career is just beginning, and saves 33-40% of a very modest gross salary?

If they were training in a specialized field would this change your advice in either direction?

What if they do not know the direction their life (family, career, location, employability) will take or their future spending levels?

Regards,
triceratop
triceratop,

I come from a country/culture where the average gross saving rate is 30+%. My family follows that by default. And, there are many millionaires in my family plus many more reached financial independence. They ranged from low income to 7 figures income. They ranged from folks that never enter high school to those with a graduate degree.

I found that our mentality is just different from many others. Our goal is not retirement. Our goal is financial independence as soon as possible.

<<What if they do not know the direction their life (family, career, location, employability) will take or their future spending levels?>>

How does any of that matters? Having the money give the person freedom and option.

KlangFool

P.S.: I am advocating a somewhat balanced approach. Save 1 year of annual expense every year. It is not saved as much as you can. It is a balance between saving and spending.
Last edited by KlangFool on Thu Mar 22, 2018 7:51 pm, edited 1 time in total.
dknightd
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Re: Working till retirement is not a great plan

Post by dknightd »

Normchad wrote: Thu Mar 22, 2018 7:13 pm I agree while heatedly with the above. In today’s world, I think age discrimination is largely a misnomer. Unless there is a pension at play, what motivation does an employer have to get rid of you due to age? Other than your salary, what do they save from letting you go.

We don’t like to talk about it, but a lot of older workers lose their job because they’re just not that good relative to their pay. I’m a well paid SW engineer at 50+. I know I’m not as good as I used to be. I’ve got a lot of great experience, which counts for something, but there are limits.

These new college grads are very smart, have the latest skills, and work for less. If we were purely looking at numbers, I’d pick them over me every time. For some reason, people just aren’t willing to admit that people’s productivity declines with age, and as pay rises, it creates a yawning disparity between their pay and their worth.

There just aren’t many great SW developers in their 50s and beyond. If they were worth their salary, there would be no reason to let them go.

I think it would be great if companies could adjust pay to always catch a persons actual value. So your pay would rise to a peak around 45, then start declining. In this way, there would be no reason to let older works go, because they would always be earning their keep.
Sad but true. This why we can (or have to) retire. Old feeble minds - ha ha
If you value a bird in the hand, pay off the loan. If you are willing to risk getting two birds (or none) from the market, invest the funds. Retired 9/19. Still working on mortgage payoff.
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SeeMoe
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Re: Working till retirement is not a great plan

Post by SeeMoe »

By the early 40’s it’s time to start putting 15%-20% of your money into “ your” future retiree folios. The kids have to take care of their education with what you provided up until then. If one is RIFTED by 50 or so, immediately downsize and live within your means. Doing odd-jos if necessary and practice frugality by not touching your investments. Life still goes on , but have medical insurance too as a safety net. Plan?

SeeMoe.. :shock:
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Re: Working till retirement is not a great plan

Post by holycow007 »

Changed retirement to 50 in Personal capital
Shows 82% chance..got to improve
fortunefavored
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Re: Working till retirement is not a great plan

Post by fortunefavored »

"i can't fathom it ever happening to me, or whether all of these older folks just got complacent and became unemployable -- probably a bit of both."

I have worked at (recent) megacorps where the policy was 20% of new hires every year must be new graduates but the total number of staff must remain flat. Maybe that policy is legal but I can do basic math and see how that has very little to do with competence.

I saw the writing in my 30s and similarly made a plan to be done by 50 at the latest.
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