I told my kids to clean their room last week. They asked, perfectly reasonably, “Why? It’s just going to get dirty again.” I thought for long time. Finally I said, “Well, you might be able to find your stuff,” trying to sound convincing. By then, they had made an even bigger mess. “We don’t care,” they said, dumping a box of Legos on the floor. “Then, no TV until you do!” I screeched hysterically. With that they went off, pushing dirty clothes under their beds.
It was the same day I met with my financial planner. My kids had worn off on me, and worn my nerves to fine, taunt treads. I was not in the mood for a lecture.
“You need to save enough to have 70 to 80 percent of your current income in retirement,” he began, to his everlasting regret.
“This sounds like a differential equation, and that’s a hard subject,” I replied, trying to look serious.
He looked at me askance. I pursed my lips to keep from laughing. It worked. “No, it’s really easy,” he said in an avuncular tone. “Just assume a historical rate of inflation and you’re in business.”
“So, I start with the end goal of say 70 percent of my current income and work backwards to how much I need to save every month?” I could tell he was getting impatient. But I was determined to make him earn his money. He probably watched clouds drift by his window while I was making kids clean their rooms.
But he took it in stride. “Yes, that’s right,” he said with an expansive gesture.
He was right where I wanted him. “I can’t save that much, you know. I need some from Social Security and my pension too.”
“Well, we subtract those from the end goal, of course,” he said. There was hope in his eyes. He thought we were almost done. But I had more to say. My inspiration was retired United Airlines mechanic stepping stiffly from his trailer to his big rig when he thought he’d be in a Florida retirement community. (It had been on TV.) His income was cut in half when the pension he thought would be there went under the purview of the Pension Benefit Guarantee Corp. His equation was right, but his assumptions were wrong. I forged ahead for his sake. “You’re asking me to make a wild guess about Social Security and my pension. Lots of countries have been forced to reduce their public retirement benefits in light of changing demographics. And what about United Airlines employees, whose pensions were cut even after they were ‘safely’ retired?”
Beads of sweat appeared on his forehead. “You’re not supposed to know about that,” he said under his breath.
“What? What was that?” I asked. This time I smiled, but he was busily rearranging his paperweights and didn’t notice.
“Oh, nothing,” he said. Then he gathered himself for the final round. I admired his tenacity in the face of certain defeat. “Look, you just have to make an educated guess,” he said meekly. I had intended to let it go at this. The poor guy had suffered enough for one day. But a sudden image of myself with grizzled locks serving greasy burgers came to mind. “I’m not going to retire,” I declared.
A look of absolute horror came to his face. I could almost feel his blood running cold. “Don’t say that!” he hissed through clenched teeth.
“But it’s too much math,” I said. “I’d rather keep working forever than do this equation.”
I had won the argument, but a cornered beast is dangerous. Especially one that does a lot of accounting. “No TV until you start putting money in your IRA!” he screamed.
With that I handed him a check. Now he was speaking my language.
