Lucky One

I OFTEN WONDER: HOW did I manage to retire early, at age 58? I wasn’t born with a silver spoon in my mouth. I never earned a large salary. I wasn’t a very good investor. I didn’t start saving for retirement until I was in my late 20s.

My future did not look bright. I graduated from college at age 23 with a degree in history. There were not many job openings for a history major. But I had luck on my side. I was born at the right time:

• I entered college in 1969, when the cost of an education was inexpensive. I was able to pay my college expenses by working part-time and graduated with no debt.
• I found a job in the 1970s with an aerospace company, at a time when manufacturing jobs were still plentiful in the U.S. It was an entry-level job, but there were plenty of opportunities to move up the ladder.
• In the beginning, I belonged to a union that negotiated wages and benefits on my behalf. I received yearly raises that helped my salary keep up with inflation. Today, membership in unions is far less widespread.
• Companies were still offering pensions and I was eligible for one. Also, I had affordable health care up to age 65. Now, companies rarely offer pensions to new employees. They have also cut back other benefits.
• I lived through some of the greatest bull markets. During my years of investing, I have seen the Dow go from 831 to the latest high of 26617.
• I retired in January 2009, when the stock market was deeply depressed. I took part of my pension as a lump sum and invested a significant amount in stocks, thus taking advantage of the next bull market.

Yes, I was a lucky one. But along the way to retirement, I also earned my opportunities:

• I worked hard and took advantage of every break that came my way. I got my work ethic from my father. He would get up early for work and come home late every evening. I also found myself working long hours and many six-day workweeks.
• I learned from my father about saving money, too. He would say, “It’s not how much money you make. It’s what you do with your money that counts.” I bought an affordable condo and retired there. I kept my cars until it didn’t make economic sense to repair them. I learned that, if you were a good saver, you didn’t have to be a good investor to reach your financial goals.
• I stayed relevant and current. I went to school at night, while working fulltime, and earned an MBA. I also earned all the certifications required to stay current in my job.
• I took advantage of a host of tax-favored saving opportunities: traditional IRAs, Roth IRAs, Roth conversions, 401(k) plans, 401(k) catchup contributions.
• I received many promotions during my career, thanks to hard work and social networking.

Unfortunately, future generations may not be as lucky as I was:

• Today, college education is unaffordable for many people. According to the Los Angeles Times, “Student loans are now the second largest category of household debt in America, topping $1.4 trillion and trailing only mortgages at $9 trillion.”
• Many individuals and families struggle to pay for health care. According to eHealth, the average total cost of health care in 2016 for an unsubsidized customer, including both premiums and deductibles, was more than $8,000 for an individual and almost $18,000 for a family.
• Good-paying manufacturing jobs, which allowed many in previous generations to join the middle class, are harder to find. According to the Bureau of Labor Statistics, the U.S. lost some five million manufacturing jobs between 2000 and 2014.
• The stock market may not produce the sort of gains for future generations that I enjoyed as an investor. In an interview in October 2017, Vanguard Group founder John C. Bogle forecasted that, over the next decade, stocks would return 4% a year and bonds 3%.

All I was looking for, when I was young, was an opportunity to succeed.  I got that opportunity. I hope future generations will have the same opportunity—but I worry that they won’t.

Dennis Friedman retired at age 58 from Boeing Aerospace Company. He enjoys reading and writing about personal finance. His previous articles include Friendly Reminder, First Responders and Truth Be Told.

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