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Welcome to The Rogé Report |
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The following article was published in the January 2006 Rogé Report. In the spirit of the Holiday Season we thought we would republish it today, since not one word had to be changed almost four years later.
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Ronald W. Rogé
MS, CFP® |
T'was the Night Before Harry's Retirement
by Ronald W. Rogé, MS, CFP® |
| January 2006 |
T'was the night before Harry's retirement, when all through the house,
Not a creature was stirring, not even my spouse;
My account statements were piled on my desk with care,
In hopes that they would soon support us all for the future, that soon would be there.
Our divorced daughter's children were nestled all snug in their beds,
As my in-laws slept in twin hospital beds.
While visions of warm weather and golf danced in my head;
I knew that vision for retirement was already dead,
Because I never planned in my head, that this burden would be mine,
Having to support so many family members at this stage of my life.
I thought someone else would care for them for life,
Or that others would have already moved on to the afterlife.
I thought my daughter and grandchildren would be living somewhere else,
As I was playing golf in warm weather and enjoying the autumn of my life.
I wish I had planned better, to avoid this nightmarish life.
But it's too late now; I'm stuck with this life.
My advice to those of you who will listen, because I did not:
Plan early for the future you want, and include provisions for those who did not.
“Happy retirement to all, and to all a good life!”
I paraphrased the 1823 poem from Clement C. Moore's “A Visit from St. Nicholas” to describe some of the problems we are seeing today with Baby Boomer clients who are nearing retirement.
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Journalistic Forecasts Were Wrong |
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Back in the 1980s, there were all sorts of articles written about how much money Baby Boomers would inherit from their parents and what great retirements they would have because of that inheritance. Well, what those articles missed were the improvements in medicine and technology that are helping all of us to live longer.
We currently have retired clients in their mid-70s, who have living parents they now support, but never expected to have to support. That’s because Boomer’s parents never planned to live this long and have now run out of financial resources.
Boomers are also experiencing Boomerang children. The son or daughter gets married, has several children, gets divorced, and moves back in with the Mom and Dad just as retirement is approaching. This is not at all an uncommon event today.
Also, Baby Boomers are poor savers. Evidence of this is our national saving rate of slightly less than 0%. Boomers should be in the prime saving years of their lifecycle. |
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Blame the Parents |
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Boomers had a poor role model for developing a successful saving habit. Their parents! The parents of Baby Boomers had Defined Benefit Plans (the old-fashioned pension plan), which, by and large, does not exist in today’s globally competitive labor market.
They had Social Security that was a significant percentage of their pension income. Social Security for Boomers will not be nearly as significant in providing the retirement Boomers will need.
Boomers’ parents’ homes appreciated significantly in value just as they were ready to retire and downsize. This allowed them to buy a smaller home and create a portfolio with the balance of the funds from the sale of the larger home. While real estate has appreciated significantly over the past five years, it may not continue on this upward slope. In fact, it may depreciate over the next 5 to 10 years, just when the majority of Boomers are retiring. |
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Action Required |
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So the moral of this story is to plan, plan early and plan for the unexpected. How do you plan for the unexpected? By overfunding your retirement goal. We no longer recommend to our clients that they be 100% funded at retirement so they can live to age 95. We now recommend to our clients that they be 125% funded at retirement so they can live to age 100.
We are living longer in retirement, and so are our loved ones. To increase the probability that you will live your vision for retirement, plan and save for the unexpected. Don’t get stuck in Harry’s nightmare.
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Happy retirement to all, and to all a good life! |
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Postscript to this 2006 Article |
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We continue to see this nightmarish poem unfold for many Americans. As a matter of fact the prediction that real estate would stop appreciating and actually decrease for 5 to 10 years is now a reality, adding to the nightmarish scenario. Your future begins today. Forgive yourself for mistakes you made in the past and begin to create the future you want today. How? Begin with a Plan.
The following is the new motto of our company. I believe in three powerful words it says it all: |
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Plan. Achieve. Live!SM |
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Happy Holidays to all and to all a Happy and Prosperous New Year!
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For additional information about our services, please visit us at www.rwroge.com or call our office toll-free at 1-877-218-0085.
Click Here to read about
Rogé in the News-3rd Quarter 2009 Published Press. |
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R.W. Rogé & Company, Inc • 630 Johnson Avenue • Bohemia, NY 11716 • Phone: 631.218.0077 • Fax: 631.218.0147
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© Copyright 2009, R.W. Rogé & Company, Inc., All rights reserved.
Beyond Advice is a service mark of R. W Roge & Company, Inc © 2007, R.W. Roge & Company, Inc., All Rights Reserved |
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