Working on retirement

I got a jolt when I opened the envelope last month. My IRA statement showed that its value had dropped about 12 percent since the last quarter.

I recalled a couple of periods when the account increased by at least that much over similar periods. Such is the nature of dollar-cost averaging.

I’d read an article that same morning reporting that lots of baby boomers earned and subsequently lost a bundle in their collective retirement plans because of the drop in the stock market in the last year or so. The article didn’t indicate that baby boomers are afraid they won’t be able to retire, just that they won’t be able to retire early. To the contrary, a lot of us will be working longer than we thought.

Several factors, it seems, are conspiring to make the dream of early retirement just that. Here’s why:

* There seems little doubt there will be labor shortages over the next several decades, if not across the board, at least in pockets of the economy. That means people with in-demand skills will find it attractive to continue working.

Baby boomers still constitute the largest demographic bulge. As a group, they’re also fairly well educated. My suspicion is that it will be so attractive to work that a lot of us won’t be able to resist staying on the payroll. We’ll be able to work from home, in some cases, so we can live in the Sunbelt and telecommute.

* There’s the phenomenon of contrary outcomes. That means things could turn out a whole lot differently than anyone expects. For instance, if I had gone to medical school, I would have figured on entering a profession in which I would be handsomely compensated.

Doctors still do pretty well as a group, but some are opting out of medicine for a number of compelling reasons: working conditions, insurance company hassles and economic factors, to name a few. Who would have predicted that in the early ’70s?

* Because of advancements in medical science and public health initiatives, we’re living longer, which means we’ve got more years of retirement to fund. It’s kind of a cruel kindness. We’re living longer, so we’re going to have to work longer to afford it.

* Politicians are trying to untie the Social Security/Medicare knot, and who knows what that will mean. I’d bet they’ll figure out a way to keep us working — while they’ve retired, of course — either with incentives or disincentives or both.

So I’ve decided not to worry too much about the ups and downs of my retirement fund. I’m probably going to have more time than I’d planned to build up that nest egg. Ray Marano ([email protected]), who already has that retirement condo in Ft. Lauderdale — at least in his mind — is senior editor of SBN Magazine.