Tuesday, June 16, 2015

How Many Careers are Enough?

Ok, so I left the bulk of this comment on a PF blog but she decided not to publish it.  This comment was in regard to a discussion on "second careers".
Or as the younger folks call it "your Second Act".  This blogger was talking about people putting in enough years to "retire" from a career to receive a pension and then leaving to go do something else/have a second career.

First off, the number and types of jobs in our current world are quickly dwindling that offer pensions when you leave their employment.  Most pension plans are attached to state or local public sector jobs nowadays.....fire, police, teachers, etc. or federal or US military government employees.

The private sector employers(business corporations)have been discarding pension plans for the last 20 years.  And many of those that remain are rife with underfunding and borrowing from these funds to put the monies elsewhere in the company.  And when companies go under these loyal longtime employees who thought they had a securely funded retirement until they died are told the money is all gone so too bad.
This group of jobs that let you "retire" with a pension after 20 years in is a rapidly shrinking pool of employment.

But the thing is, this pensions disappearing act isn't only happening in the private sector either.  Remember in 2010 how the entire town of Central Falls went bankrupt in Rhode Island and the city workers near retirement were told not to expect much of a pension and all the then already retired workers' pensions were sliced by 50% or more?  "The state bailed them out(more tax hikes for working RI residents!)and now they are getting about 75% of their pensions for the next few decades.
But this scenario of pensions crumbling is playing out in other US cities as they become insolvent.

A few years ago, well before this current Recession, my Hubs major corporation asked all it's then current employees to choose between a company funded pension at retirement or offered to give them the equivalent balance in cash that was in their pension account to invest/manage themselves.  We chose the latter.  Any one starting work at this corporation no longer can choose a pension over a 401K/Defined Benefit/Cash Balance Plan.  Pensions are no longer offered.

Looking back at the last few years I am glad we decided against the pension.  Sure, it's more work on our part looking after our funds but I know I won't wake up some morning at the age of 72 and get a letter from Hubs' old company saying that their pension fund is bankrupt and there will be no more checks to live on.  Having my future in a corporation's hands is much scarier than having to decide how to invest our money ourselves.  It's almost as scary has having our future in the hands of our government. ;-)

There was talk on this particular blog about having a second career in the private sector because salaries were so much more lucrative.

While that may have been true 20 years ago, salaries as a general rule are no longer higher in the private sector.....plus they are also not as secure as they once were.   Many positions, even with-in large, long established corporations have little to NO job security!  Especially if you live in a "at will" employment state....you can be fired for no reason.

That's always been the trade-off between public vs. private sector jobs.  Private sector salaried jobs paid out more while public sector salaried jobs had better benefits and more security.  Since the recession hit many well paid private sector salaried jobs have gone away, never to return.

Leaving a job after "getting your time in" doesn't mean retirement necessarily.  Who needs to retire at 40 years old when it's possible you may live another 40 years or more?  They would spend the majority of their life not working in that scenario!  20 years though enough to "retire" with a benefit from some jobs, is a very small slice of your working life!

Why quit a job after "getting your time in" when you still plan on working a number of years?  Unless that job is so onerous the thought of doing it for any amount of time longer, why quit?  If you go elsewhere, you will be the "first hired, first to get fired" in the employee hierarchy.  If you go elsewhere you will have to start fresh fitting in, getting up to speed, learning the ropes.  If you go elsewhere you may also be starting at the bottom of the salary scale too.

If your job is too stressful I can see leaving after "getting your time in" but not every job is THAT stressful and all jobs ARE stressful to a degree in one way or another.

In my grandparents generation people retired at 65 or so and most people didn't live much past that so no issue about saving/paying for retirement years.   Plus their jobs had pensions so they needn't save for their golden years.  Now pensions are quickly becoming a thing of the past in the US and as companies go bankrupt they are renigging on pension agreements leaving pensioners with nothing.

Nowadays everyone wants to retire "early".  My BIL retired at 50 with a nice company package to go that early.  He now lives in a mobile home, has no money and basically is waiting to die. Sad.
Though BIL chose to go when he did, sadly, post recession, many older workers were sacked and didn't get a choice about retiring nor did they get a package of extra cash/benefits.

Many folks near retirement age has not saved nearly enough to support themselves well and will run out of money at some point in their old age. 
If you figure that our grandparents lived not long past 65 and worked until 65 then we could possibly live another 20 years(or more)to 85 so for us, retiring at 65 IS early retirement.
But that's another discussion for another time.

As for the Millennial generation,  talk of a first and second career will be moot.  This generation may know 4 or more job/career changes before they see retirement.  And now with the ACA these workers no longer feel tied down to a location/job like the previous generations of workers because healthcare benefits are no longer necessarily tied to their company/position.  Our workforce is much more mobile than it ever was and work is taking on a whole new look.

Bottom line, I think it's a wise thing to save early and often and to run retirement numbers well before you actually get anywhere near to a retirement age(say 50+).  I'd recommend running retirement figures as early as your 30's and every 5 years after that to rebalance and reassess your savings and your goals.  That way you know where you stand with your "post working" income and have a better handle on when you can afford to retire.

Stop living a life on borrowed money now, keeping working as long as it benefits you not matter your first, second, third, or fourth career and save, save, save!



  1. I have been saving for years as I want to have a comfortable retirement. No pension for me and I don't count on social security even been there when I retire.

    And my grandparents live a lot longer than 65. One grandpa lived 'til in his 80s, another grandpa 'til 89 and my granny lived to 99 1/2. (My mom's mom was killed by a drunk driver when she was young, so that does not count in this equation.)

    I am hoping to retire at 66 so Hubby and I can have many, many years of playtime. :-)

  2. Bravo!! Bravo!! Standing and clapping! Thank you for saying all this. My job is dealing with all of those company pension plans that go bad - and the reality is that most people are in absolutely no position to retire. And will face poverty in retirement. Anyway you nailed it all - except I might add I was a federal employee for many years - the idea that they are paid less than the private sector counterparts is complete fiction - without counting benefits feds get paid at least as much or more than the private sector counterparts plus have job security.

  3. We started saving at 25 and our investments earn as much each year as one of us does. That's like having a third person working for you -- for free! And we continue to contribute.

    My guy has a physical job and will have to retire. I plan to go out at 63, but the bank I work for values older workers so there will be no "force out." I might even be able to contract with the skills I have.

    I feel very secure out our future -- but that doesn't mean we're going to coast or get careless. We have no one to rely on but ourselves!

  4. Company loyalty is gone. You stating the truth obviously didn't go with the preconceived notion of that blogger. Apparently, she still believes in that fallacy and is using her blog to perpetuate it. What is that blogger's age? Has she not noticed what has been happening in the last 20 years or so (or more)? When 50-year-old people are forced out of their job, it isn't a "second career", it is swimming when they could have sunk! You're a smart woman, and you tell it like it is!


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