Do you worry about your retirement?
I do. And everyone I talk to lately seem to worry about retirement as well.
My colleagues worry.
My friends worry.
My PhD students worry.
My sons (the grown up ones) worry.
Frankly, in the world we live in, one will be rather silly not to worry about retirement.
Yet, thinking back, my grandmother never did. And she was far from silly – when it came to money she was frugal to the extreme, careful to a fault and ambitious as an army major.
I know; I live with my grandparents for three years when I was little and visited regularly until they passed on when I was at university.
She never even mentioned her retirement, or her pension.
‘She was probably rich.’ – you may be thinking.
Well, her life is a real ‘rags to riches’ and then loose it all again kind of story.
She was born in a small village in Bulgaria at the beginning of the 20th century. Her parents were poor. Like many young man, her father went to the US to work and provide. There, according to the family story, he got tuberculosis and died.
I have never seen the evidence of that and it is entirely possible that, like many young man at the time, he went to the US and…just never got back in touch again. Stuff like this happens, right.
When my grandmother was three years old her mum passed away and she was orphaned. She had a sister that was three years older than her, that was all.
As I said, her family was poor so she was sent to another village to be raised by a distant relative. She always cried when she told me this part of her life: it is a story of physical abuse, hard work at a very early age and terrible unhappiness. But she worked, she took the beatings, she went to school for several years (though I still think she was functionally illiterate which means that she could read and write but never did it) and survived.
In her teens, and with the promise of becoming a very attractive young woman, she went to Sofia (the capital of Bulgaria) to be a nanny to two Jewish girls. Several years later, and having become an attractive young woman, she went back to her village.
There she met my grandfather – the son of a wealthy local landowner – and decided that she will marry him.
She did: because his family was against him marrying a woman with no family and wealth they eloped.
They lived a comfortable life between the two World Wars. Just to give you an idea of how comfortable they were, my grandfather bought his son-in-low a dental practice as a wedding present.
Then in 1945 the Communists took over Bulgaria. They ‘nationalised’ the land which means my grandparents were left with just a bit of land for their personal use – the rest was taken into the ‘cooperative’.
My Dad (their son) was one of these communists, by the way.
Later, they still probably had more than the people around them: my grandfather was a talented accountant (you see, this personal finance blogging thing has family roots) and always made enough.
Still, my grandmother came from poverty, married into wealth, lost it all to the communist state and never worried about her retirement (or pension).
And this is why!
One: She grew everything they ate
My grandparents had a large garden around their house which was split: some was used to grow fruit and vegetables and part was fenced to house all animals.
They had sheep, hens, geese and turkeys. So all eggs, meat, milk and cheese came from the yard. They also had pigs which were used for meat (my grandmother used different preservation methods for that and some was canned, some fried and preserved in oil).
She made cheese and she made yoghurt. She canned all the fruit and vegetables from the garden. This way there was food during the winter as well.
The only thing I remember them buying was bread, sugar, salt and oil. Otherwise, if something didn’t grow in my grandmother’s garden it was bartered with the neighbours.
This means that although my grandparents didn’t make a lot of money, they saved almost all of it. It also means that feeding themselves was their job. But I still remember what it is like to bite into a freshly picked tomato that’s grown in the sun.
Two: She had a simple life
My grandparents had a very simple life. They worked the garden and other fields, looked after their animals and chatted to the neighbours.
They never travelled. I think that my grandmother can probably count on the fingers of her hands the times she travelled more than 40 km from her village. They didn’t have skiing holidays or rest at the beach.
Thinking about it, I’m not sure they had the notion of holiday – or entertainment – at all. They had parties on certain dates (usually the saints’ days) and that’s it.
My grandparents didn’t have a TV: my grandmother won’t allow it.
Most of my grandmother’s life was about functionality: not fashion or beauty.
Three: She didn’t waste anything
You know, my grandmother didn’t have a rubbish bin. Not really.
Everything was used and recycled. Organic waste was composted and used in the garden or in the fields; paper raps were used to start the fire and all packaging was re-usable.
My grandmother won’t put the light on because she didn’t want to waste the electricity (yep, if she paid more than 20 pence for electricity per month she thought she lost her frugal touch).
She did live, and she knew that she can live, on very little.
Four: She didn’t have great retirement expectations
Today, we make too big a deal of our retirement. We obsess about where we are going to retire, what we are going to do in retirement and whether we’ll be able to faraway lands.
My grandmother had no expectations of her retirement. I’m not sure whether she had a notion of retirement at all.
For her life was simple: you are born, you grow up to be a decent person, you work, you have children; you work some more, you have grandchildren; you work some more, you slow down and then you pass away.
This is life. If you are lucky this is the sequence of a good life.
Five: She had children
This is a major piece in this jigsaw.
My grandmother never worried about her retirement (or pension) because she assumed – rightly – that her children will look after her when she needs it in her old age.
For her, this was part of the sequence of life. You look after your children and make sure that you leave two things: legacy and inheritance. Legacy takes care of raising your children to be good people and know their duty to their parents. Inheritance gives you a bit more edge.
If you manage to leave legacy and inheritance, your children look after you.
She wasn’t wrong: my Dad looked after my grandparents when they needed help.
Finally…
I’m not saying that my grandmother lived a great life.
Even if it was, I couldn’t live like that. This is why I am very serious about my retirement, my pension and building more income streams.
And if you don’t match all five conditions set out above I’ really urge you to get concerned about your retirement. Oh, and take action.
Do you worry about your retirement? What are you going to do about it in the next week?
I don’t think I worry about it, but I do/did something about my future. I am still working on t by contributing to my 403(b) and pension. I created a variety of layers to make sure I will have enough in retirement. I created multiple layers because there are people I know that either wanted to or had to retire at the just the wrong time.
@Krant: Good work, friend. When are you retiring? And making sure that you have layers of security is not a bad strategy either :).
I think your Grandma lived a GREAT life. I absolutely do. She suffered, she stood up to it, she fought back and she made of her life what SHE wanted it to be. I think she lived a great life – not perfect (but nobody does), but GREAT nonetheless. Where do you think you got your moxy from?
@Jim: Thanks (about the ‘moxy’ thing). She did have a great life; more interestingly, she had a life – she didn’t waste it on regrets or empty wishes. Life was what it was and she got on with it enjoying greatly parts of it.
Your grandma was a strong woman. Your family history could make an awesome book! In her eyes, life was about surviving. In our eyes, life is about getting by AND enjoying it. Every generation strives for more, and that’s normal, right?
@Crystal: Will think about the book but you may be right :). Yes, every generation strives for more and this is the way it should be. Lately, though, I’ve been thinking that we think about the whole ‘meaning of life’ and ‘why I’m on this Earth’ too much. At the end we have one main responsibility: to leave the planet better off than we found it or failing that not to cause much damage. And we failmiserable in that.
Your grandmother of course wasn’t very likly to live for 20 years after retirement and have a reasonable chance of living 30+ years… And she also lived at a time where there were increasing numbers of younger people, rather than an ageing population with its massively increased health costs. Inter-generational economics are going to be hugely difficult over the next 50 years.
@Sara: I agree with you that inter-generational economics will be dificult inthe future mainly because we’ve made the relationship between generations an economic one again (it used to be when survival was so hard that once you couldn’t contribute you had to ‘go’). As to the two factors contributing to worry that you mention, they play now but were entirely irrelevant in my grandmother’s case – she passed away at the age of 85 (even assuming retirement at 60 this is 25 years) and Bulgaria has been depopulating since the 1960s. In fact my point was that my grandmother had a ‘small’ life and she didn’t think of grand demographic developments – she knew that she has children and that she’s raised them ‘right’.
I loved reading the story of your grandmother. Generations past have much wisdom that we’d do well to learn from today. That being said, I’m not sure I could live that way! I try hard to be frugal and not waste, but we really do love to travel. And I’m not sure how much to expect our only daughter to care for us in old age. Thanks for sharing!
@Dee: You are making a very important point (and I can feel another post coming). We’ve got into the habit of seeing older people as helpless and useless. In fact, I’m getting a bit cross because young people in shops have started calling me ‘love’ (and I’m only 52 which is the new thirties, right). Every time this happens I rememeber a movie called ‘Fried green tomatoes…’ and want to shout: ‘Yes, but I have better insurance.’. And for the record, I couldn’t ever live my grandmother’s life either but some of the ‘early retirement’ people try to.
Your grandmother had grit, a quality that seems to be lacking these days. I think we’ve been lured into this idea that retirement means vacations, which it clearly is not. Something happened after WWII, which here in the US we call the “American Dream”, that was brief and short-lived: people worked for X amount of years, then retired comfortably and went on “vacation.” For most generations prior to this and now after that one, this isn’t a reality unless you make an effort to save, invest, and save some more. It takes more work to achieve that “American Dream.” So, I’m just going to continue working. ; )
@Little House: Interesting! And here in Europe we thought that the American Dream is much older and is about opportunities: the message that enybody can get wealthy in the US (you see, in Europe most wealth is still inherited). Anyway…I won’t retire. Like ever! What I’ll have is financial independence in October 2018. And financial independence is about re-organising your life.
Retirement in the way that we talk about it, is a very new concept. How you describe your Grandmother’s life is very similar to what I’ve heard from other families, from my family, etc. With some nuances of course. I’ve spoken with my Grandma about how she grew up and what she says is very similar to what you describe in your Grandmother’s story. My Grandma is still fairly “young” but this is what she told me about her childhood. She grew up on a farm, they grew everything, they made their clothes, they didn’t go out to eat, travel, etc. She didn’t ever express that she felt like she was missing out on anything at that time in her life. While I do want some different things for my retirement I DO want to focus on minimalism and being very, very clear about what is important to me: health, time, people, travel, and money. That’s it. Everything else is just icing on the cake.
@Michelle: I was toying with the thought of experimenting with minimalism (though deep down I know that a minimalist I’m not going to make – love some of my stuff too much). Then I found a book on Essentialism and discovered the I’m a born essentialist. You may turn out to be as well: it is by Greg McKeown and is called Essentialism: the disciplined pursuit of less.
She lived a remarkable life, it seems. Reminds me of my own grandmother, who also had quite a journey for her 99 years that she was with us. Didn’t have much growing up, had some for a while before being widowed at a young age, then lived very modestly later in life. Not an easy life, actually. The thing is, she had very modest expectations and had grown daughters who supported her later. These two align with what you mentioned about your grandmother.
Great post.
@Tie the Money Knot: Yes, I’m sure that it is generational rather than location based. After all, the generation of my mum lived through two world wars. And you are right: low expectations and children who can help is what doesn it.
Very interesting… I’m thinking about my own article I wrote today on “regular” retirement in your 60’s vs “early” retirement much sooner than that, and how if you stop to figure out what your “dream” life would be you can then go backwards and set stuff up to hopefully get you closer to that end. I wonder if your grandmother ever *wanted* a different life or if she just loved the one she had so no need to change? We all bitch and moan about our lives and retirement because most people don’t want their current lives so you either a) do something about it or b) continue bitching and moaning 😉 I think most of us here fall on the “doing something about it” line.
@J. Money: Jay, this is a hard question to answer. It seems to me that we do spend most of our lives wanting a different one, because we can ‘get out of and reflect on our life’. To be able to do this we need the idea that there are other possibilities which we get from TV, magazines etc. In my grandmother’s case, the life she had was the only life she knew – everyone else she was close to had a similar life (well, her children didn’t but then we rarely wish for our children’s lives, right). In such cases, it is not a matter of acceptance or change: life is what it is and you make the best of it. Did you notice her smile on the picture?
I worry about retirement. At 32 I have debt, debt and more debt and an insy wincy pension. I worry more about my parents, i’m not sure what provisions they have and I can’t afford to help them.
@Victoria: Victoria, you don’t have to worry: it is probably time to start doing something about it. And if you need to talk to someone about how to pay off the debt do get in touch (you know I’m aslo know as the ‘Debt Destructor’, right?).
I like your grandmother’s retirement. Having land to provide and family to care makes a huge diffrence. In my case I have to assume a more urban retirement — which means needing to worry about having enough to cover expenses…..
@Jean: Yes, me too. And I still have land – thing is, I have absolutely no idea what to do with it, don’t feel inclined to learn and will miss coffee bars too much were I to go to the place where the land is and try to work it.
Your grandmother sounds like she was a very resourceful woman. Growing your own food and not wasting anything are some of the best ways to make sure you get the most out of everything.
I don’t really worry about retirement itself, I know that given time I should easily be able to save enough for it. I just need to put in more years of saving to get there. I think that the biggest part will be figuring out exactly how many more years that will be.
@Zee: There is something that has been worrying me for awhile and it is the following: personal finance assumes that the world (and the economy) will be largely unchanged when it is time for a generation to retire. Looking back at history, this has never been the case. My Dad had saved a lot for his retirement and than the hyper-inflation in Bulgaria (early 1990s) wiped it all out. This is how it turned out that I am my Dad’s best investment – paying for my education made sure I was always able to earn enough to help them (and they accepted very unwillingly but had no choice).
It’s a good reminder and perspective about “problems” we face today. People used to work from sun up to sun down and until you died. That was life. Now we worry about retiring early or having enough money. We’ve been maxing out for years so I feel really good about the plan we have in place. I think people are going to be really disappointed later in life and wish they had done more. It’s important to have a plan, important to have perspective in life and together that should make you happy along the way.
@Lance: A good point your are making. We create this problems for our selves and keep working on the assumption that the world will continue down the same trajectory it is on now. We all want to save a lot for retirement and assume we’ll be spending on the things we spend on today. In fact, old people need very little apart from basic care and a bit of love and attention.
Growing up in Russia, I can totally relate to your grandmother’s story. I’ve visited villages where people still live off the land (in the 21st century!), provide for themselves and haven’t even heard of investing. Most of them don’t even have a bank account.
It’s a very philosophical argument as far as who is really happier – them or “us”, people who live in the more developed areas. Each life comes with its own challenges and benefits. I’m like you, where I can never live like that, but millions of people still do…
@Anton: Hey, you are here :). Anton, I’m not buying – and have never bought – the ‘let’s be close to nature and hug trees’ lifestyle. I don’t interfere with the people who hunger after it and get to live it; and I don’t want people interfering with the kind of lifestyle I choose which is as far from nature as possible. I like coffee bars, I like travel, I like exploring new places and getting to know new cultures.
Point is that it has to be a choice. And we have to know that whatever happens we are likely to survive and adapt. My grandfather adapted to not being wealthy.
I like reading about people’s family histories and what makes them the way they are today. I think that generation was more like the Chinese are today, where you are expected to take care of your parents in their old age. The more I think about it, I would love to live in a granny suite in one of my kid’s homes, with quick access to my grandchildren. What’s not to like about that?
@Debs: This sounds nice. I’d prefer a house three blocks away. You see, Debs, seeing the children and grandchildren from time to time is great fun but I still want my independence (even if it is a bit solitary).
My grandmother had a very similar story. Before she passed, she would tell her daughters, “I don’t know what you will do without me.” And she was right. They are lost without her. She ran the house.