This MoneyWatch article talks about retirement in the 1950s
and begins with the statement that in comparison, most of us would feel
deprived. They had far fewer financial resources than we do today, but
their expectations were appropriate to that level of resources.
Having been raised during the depression, the retirees in
1950 knew what it was like to have little and to get by on little and to
appreciate what they did have. Necessities did not include a second car
in the garage, or for that matter a garage. "There were few TVs, no
computers, no cell phones, no entertainment centers, no home gym equipment.
Long-distance phone calls were expensive, so people usually communicated with
distant friends and relatives via regular mail." Houses were
smaller and families were bigger. Jeans were patched when they got holes
in them, not bought that way. Those who bought new clothes instead of
mending the old ones or getting something handed down from an older sibling
were considered well to do. Also reserved for the upper echelons or
special occasions was the “luxury” paying a professional to cut your hair.
In 1950 pensions were less common than they are today and
our tax-deferred retirement savings tools were not invented until decades
later, as were such financial instruments as reverse mortgages. (So your house was considered a residence,
not an investment.) “In 1950, the
average Social Security benefit was $29 per month. In 2012 it was $1,262. In
2012 dollars, that $29 translates to about $280, which means the average Social
Security benefit in 2012 is worth about 4.5 times the average benefit in 1950.” Part of the answer to their ability to get by
on so little was the very modest cost and equally modest outcomes of healthcare
at the time and the related shorter life expectancy; but also the willingness
to work longer, while having much lower expectations about personal possessions
and leisure activities.
As we look back we might wonder how they got by and try to
learn some lessons from our grandparents.
The strong message is one of perspective. Compare, for example, the expectations of the 1950s to the USA Today article from earlier this week listing $130,000 per year as the price to live the "American Dream" for a family of four. Clearly many more people can dream this than can live this, but without perspective everyone had permission to believe the marketing messages and feel bad about it. The first article closes with: “Instead of comparing ourselves to the
Joneses, let's focus on what we really need, what we can realistically afford
and what truly
makes us happy.” This is good
advice for retirees and prospective retirees, but also for everyone else beginning
with our children and grandchildren.
No comments:
Post a Comment
Click again on the title to add a comment