Retirement Reform Blog

After last week's post, I started thinking about what our societal expectations are about retirement.  So I brushed the dust off of my pocket-sized copy of the Constitution and the Declaration of Independence.  After perusing them, I was reminded that these beloved documents spell out many God-given rights that government is obligated to protect while allowing humankind to pursue life, liberty and happiness.  (Note to the courts:  Constitutional law still exists).  But what is expectantly absent from the Bill of Rights is the right to an easy, stress-free life.

What does this have to do with retirement, one might ask?  There are no Constitutional rights to retirement, much less an easy retirement.  Retirement is made possible by the structure of entitlement programs, the effort of workers and savers, and the generosity (hopefully) of the next generation to care for their aging parents.  But the Constitution says nothing about retirement.  Specifically:

1)  There is no Constitutional right to early retirement.  The full retirement age when people receive their full Social Security benefits for most of today's workers is now 67.  While retiring at age 55 may be the plan for many, there are no guarantees.  So if your 401(k) account derailed your plans to retire early last year, this matter does not justify a goverment bailout.

2)  There is no Constitutional right to home equity for retirement income.  While the Constitution protects your property from unreasonable search and seizure, there is no right to property earning a 200 percent rate of return that will enable you to downsize and retire comfortably from the sale of your existing home.  The current mortgage mess has affirmed that this right does not exist.

3)  There is no Constitutional right to entitlement programs.  Sadly, the government has mislead people into thinking that Social Security alone can and will solve any retirement financial problems, and that there will always be money to fund entitlement programs.  But the $102 trillion future deficit held by Medicare and Social Security as it stands today means that the program will exist in its current form – only as far as the government is willing to borrow and people are willing to fork over payroll taxes.

4)  Finally, there is no Constitutional right to a "wealthy" standard of living at retirement.  I am reminded of the elite elderly couple Thurston and Lovey Howell from the 1960s TV show "Gilligan's Island."  While they were shipwrecked on an uninhabited island, we learn little about how these millionaires made their money, but it was obvious by their dress and demeanor that they had no financial worries in their later years.  Such is usually not the case for real-life retirees.  Some baby boomers may approach retirement with the resources to purchase a yacht or a month-long cruise, while many others may have to settle for a three-hour tour.

In other words, there are no guarantees in life, or in retirement outcomes, for that matter.   But careful thought and planning can minimize the risk of plans going awry.

Have a good weekend!

Tags: elderly entitlement programs, retirement, Retirement Planning, rights