Planning Your Retirement Can Be an Age-Old Problem
features
Here is a warning to fire fighters of all ages, whether volunteer or paid: Retirement may be dangerous to your health.
Retirement is no longer a simple matter of working the required number of years, signing up for your pension check and settling in for the good, quiet life. Inflation took care of that. There are a number of other pitfalls to be avoided as well. Statistics show that retired people tend to have higher rates of alcoholism, divorce and suicide.
The reality of potential retirement problems may be hard to accept if your own retirement is still years away. Indeed, one expert suggests that most employees spend more time planning their two-week vacations than their retirement years.
Government figures indicate an average life expectancy of 13 1/2 years after age 65—17 1/2 years for women—and the averages are increasing. Younger retirees, more common in the fire service, will have even longer retirement years to cover. Of course, many will far outlive the averages. The real challenge becomes how to maintain the quality of life after retirement. What are you going to do with yourself? How will you finance it?
Pension plans not universal
Fewer than half of all American workers are covered by any pension system, according to the Senate Committee on Aging and Labor. Another 25 percent will not stay with one job long enough to qualify for a pension. This puts fire fighters with a sound retirement system in a relatively enviable position. Volunteers covered by a pension at their businesses are also fortunate.
But even fire fighters in the soundest systems will find their pensions unable to keep pace with the continuing rise of inflation. Ask any retiree of 10 years ago what his pension check is each month. That reality seems to be known. Examination of the ages of retirees from a 600-man department having a 20-year retirement revealed very few to be leaving right after the 20th year.
The message was clear from each one questioned: “I can’t afford to retire with inflation the way it is.”
If you’re as young as 30, it’s still not too soon to begin planning all aspects of your retirement. If you’re over 60, it’s not too late but the situation could be serious if you don’t get busy now.
Retirement can be a shock
Money isn’t the only difficulty. Perhaps the most unexpected problem is the psychological shock of no longer being active in your life’s work. Every department can tell stories of retired fire fighters who later wanted to return to work. Usually they cannot. A study at the University of California found that many retirees actually mourn the loss of employment as if they were grieving over the death of a loved one.
Mandatory retirement sharpens the effect for some. The American Medical Association, testifying in a suit, said this: “Considerable evidence is available to indicate that the sudden cessation of productive work and earning power of an individual, caused by the compulsory retirement at the chronological age of 65, often leads to physical and emotional deterioration and premature death.”
A main purpose of planning retirement—in addition to covering the obvious financial needs—is to provide a substitute for the value work once had.
Business sector is concerned
The business sector, more than local governments, is showing a concern for employees’ long-term needs. Many leading companies are stepping in to help with organized and detailed assistance in the form of preretirement counseling. Experts in all areas of retirement planning are being brought in to offer advice on understanding the choices and making the critical decisions.
American Telephone and Telegraph is one company offering the counseling. Others include Du Pont, Nabisco, Union Carbide, Bankers Life and Casualty, Raytheon and Kimberly-Clark.
No fire department is known to be providing this service.
In an article in Dun’s Review, this type of program is called “the newest employee benefit.” The payoff to the pioneering companies is said to be better morale because employees can view the future with more confidence. Whatever the return directly to the companies, they seem to think it’s a humanitarian approach that is needed and worthwhile.
Mike Smith, director of research of the International Association of Fire Fighters, thinks a similar program is a good idea for the fire service, too. Will this low-cost counseling become common in fire departments? Yes, he says, “but things like this typically take 5 to 10 years to be accepted by local governments. That’s too bad.”
IAFC takes initiative
At the International Association of Fire Chiefs, however, they’re not waiting for employers to give assistance. Don Flinn, IAFC general manager, has been developing a program to meet exactly the needs already described and will present the program for approval at the next meeting of the IAFC board of directors.
Flinn’s approach seems right on target. An expert in the field of retirement and planning, Lester Tenney, a professor at the University of Arizona, was found to develop a program tailored for fire personnel based on input from the IAFC.
A successful program could take many forms, such as a book, seminar or home study. The key to really preparing persons for retirement is to get them actively involved in a learning process rather than just talking to them. Flinn and Tenney have not neglected this fundamental principle.
The IAFC preretirement planning service will be in the form of home study assignments, in which the fire service person—and spouse—are directed through areas requiring the “student” to analyze financial condition, explore vocational experiences outside the fire service, understand the value of hobbies, and otherwise learn more about the realities of retirement. The course can’t be completed without active involvement. The result will be a written guide with possible pitfalls anticipated and prevented.
What you can do
Until detailed counseling is widely available to all fire fighters and officers, you will have to learn as much as you can on your own. Start reading in the library. Meanwhile consider that successful retirees often share these five traits:
• They are free of debt. A pension income will not be what you’re used to living on, but it can go further if the retirement has been anticipated. Find out exactly what your income and expenses will be when you stop work. Make lists. This allows outstanding debts to be reduced in time for the changing income. Frequently, large mortgages are given up for smaller, less expensive residences. On the other hand, work-related expenses will be cut. Determine how much.
• They have accumulated adequate savings or investment money. Even with outstanding debts removed, future living expenses and inflation may soon exceed your pension. Start now to build up savings if necessary. Although the average life expectancy at 65 is over 13 years, the careful planner would cover 30 years of retirement living. Covered by social security? Who knows how secure that will be in 20 years!
• They have carefully considered where to live. The organized retirement village in Florida is often portrayed as the destination of all retirees. This isn’t so. Actually, only 5 percent of all retirees leave their home state, according to one book. Many who do move return later, saying they missed familiar surroundings, friends and family. Special retirement areas sound nice, but a Syracuse University sociologist found that only 10 percent of residents participated regularly in the planned activities.
Retirement planning experts urge anyone to consider the support services they would be giving up. Renting in a new location for a year is preferable to cutting all ties at once. Retirement can be difficult enough without adding the burden of a place that never comes to feel like home.
• They have cultivated an interest in leisure or other activities. Most fire department retirees would still like to work, if only part time. For the younger retiree still wanting a full-time income, it is important to plan second career skills early. It is not enough just to believe that you always wanted to run a restaurant, or whatever. Take steps now to really learn the facts about your interest. Are you ready to bet everything on it, or is it just an assumption?
But it can be done. Kentucky Fried Chicken’s Colonel Sanders was 66 when he began his successful enterprise.
Moonlighting jobs of fire service personnel can point the way. Those extra jobs help expand horizons for new options in retirement.
Nonworking retirees should also consider what it would be like to spend all day, every day, with spouses for the first time.
Do you just want to play golf instead of work? Fine, but realize that it will affect your income and expense sheets. Make sure your plan makes it possible.
Lieutenant V. M. Edwards retired after 34 years service. He didn’t choose to work, but he maintains a large garden for economic reasons and because it’s something that is personally fulfilling to him. Demonstrating the need so many of us have to keep busy, he said, “When the weather is bad for just a day and I can’t get out, I start to get an uneasy feeling. It’s no use visiting my old fire station. Everybody is new and there’s not really much to talk about anymore.”
• They have maintained good physical condition. No matter what you plan for retirement, you must feel good enough to do it. Physical conditioning ideally was part of your career. If not, it is important to get started early to improve your situation. Few persons drastically change after retirement, so don’t keep putting off a physical conditioning program by shrugging your shoulders and saying, “When I have more time . . . .”
In a book that is now a classic, Future Shock, Alvin Toffler had this to say about retirement: “Retirement, for example, should not be the abrupt allor-nothing, ego-crushing change that it is now for most men.” Ten years later, the nature of retirement in the fire service is not much changed. But if fire departments take the initiative to provide useful counseling, then the report in another 10 years can be greatly improved.
