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Opinion Editorials

Why great retirements do not come from the fed or employers

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A “must achieve” goal

This time of year brings out the planning demons in most of us. Our jobs, hobbies, family, even our bodies. If there’s a goal, at least if there’s a serious goal, there’s a plan of some kind. We all pretend that every year on February 14th, love is in the air. It’s also the day most people realize they’ve ignored many if not all their goals, and the plans to attain them. This, even though they were the architects of both the goals and the plans.

We pretty much know, though, that the things we make happen are the ones for which we hold no ambiguity. And yet . . .

The one goal virtually all of us view as a ‘must achieve’, is retirement.

The average American man reaches his 58th birthday with, give or take, around $60,000 in their job’s retirement plan. Betcha that inspires confidence. Think that’s bad? Women are pretty much in worse shape. It comes from thinkin’ that the government, or your employer, or both, have your best interests at heart. That they have a plan to generate a superb retirement for you.

Let’s look at the government’s motivation first

Beginning with Boomers as the prime target initially, the 401k and IRA were created. They were slickly marketed with a campaign touting tax deferral, and visions of huge piles of stored earnings, warehoused for Boomers’ abundant and richly deserved retirement. Here’s how it works, by definition. This assumes there are never any 2008s in the picture, a fantasy if ever there was one.

For 25-40 years, the taxpayer pays a chunk of their earnings to the ‘qualified plan’. In return for this wise decision, they’re given a tax break. For every dollar they divert into the plan, that amount is no longer counted as income, that year — and not taxed. How cool is that?!

According to the consensus, it’s very cool indeed. 

Take the couple who put in $10,000 a year, every year, for their entire working lives. Let’s say they make roughly 5.25% annual yield for 35 years. Every month, month in and month out, they dutifully fork out $833.34 as a team. They arrive at retirement with around a million bucks in their plan. They’re set, right?

You tell me. The bottom line principle here, is that the government’s plan grants tax deferment on relatively small sums — in the hard working years leading to retirement. Typically $5-14,000 annually. But when the taxpayer hits retirement, they’ll be paying taxes on 4-12 times that much every year. Furthermore, even if they produce a yield more than the 4% financial planners typically tell them to expect, that’s a lousy $40,000 a year — before taxes — state and federal.

In plain English, government baited the hook with tax breaks on amounts roughly 1/5 – 1/12 of what they’ll be collecting from you upon retirement. Geez, hurry up and tell me where I can sign up for that smokin’ good deal.

Oh, and that 4%? Quote that yield to retired folks today, who, as of last Friday were gettin’ less than 1.9% on a 10 year government treasury. Can’t find those people? They’re easy to find. Just go to the nearest Wal-Mart. They’re the ones with the big smiles, welcoming you.

‘Course, we all know that for every worker bee who amasses a two comma pile of cash in their 401k, there’re 100-200 who never hit $100,000. The takeaway?

The only reason ‘qualified plans’ exist in their present form, is to ensure the government maximum tax dolllars when your generation reaches retirement. Guess you might say, it’s Uncle Sam’s retirement plan, not yours. You save around $60-100,000 in deferred taxes. They usually get that much from a successful taxpayer/investor (401k) in the first 5-10 years of retirement. In other words, you gladly agreed to save yourself a buncha pennies in taxes each year for 25-40 years, for the privilege of paying a buncha dollars every year you’re retired. Ouch.

Then there’s your employer’s motivation

First off, shed any notion you might have about their noble intentions when it comes to the quality of your retirement lifestyle. They’d hafta climb three rungs up on the ‘I care’ ladder to reach apathetic. No, retirement plans for their employees is purely a matter of not having to fund generous pensions, as they did for so many generations up ’til around 1980.

Sure, they do the matching thing. But compared to funding pensions for all their full time, vested employees? Gimme a break. This begins and ends with limiting their costs, which, by the way, I’m all for. The government handed the gift that never stops giving with ‘qualified plans’, which was a sea change in our culture. It took retirement planning from the employer and thrust it upon the employee, making all of us responsible for our own post employment lifestyle. Again, I’m all for that. Being responsible for our own lives is what America is all about.

But the government, with the too willing help of employers, presented it as something it obviously isn’t. If it was so effective, why aren’t there millions retiring well, living more than comfortably off the income generated by their robust 401k’s?

Of course, all the preceding begs the question, doesn’t it?

Before we continue, I challenge the reader to conduct a search through the month of January. Find just one retired couple who’s living the retirement for which they worked so hard the last several decades — from the fruits of their 401k or IRA. You be the one to define what a ‘solid’ retirement is. Fine just one couple.

The moral of the story

Take your own after tax money. Generate your own retirement goals and a Purposeful Plan to get you there. Use real estate as your primary, but certainly not your only vehicle. Stop relying on the bait ‘n switch, ‘we gotcha covered’, ‘you don’t hafta do much’ plans provided by a loving and caring government and employer.

Or, simply ask yourself: How’s it been workin’ out for Americans lately?

Jeff Brown specializes in real estate investment for retirement, has practiced real estate for over 40 years and is a veteran of over 200 tax deferred exchanges, many multi-state. Brown is a second generation broker and works daily with the third generation. With CCIM training and decades of hands on experience, Brown's expertise is highly sought after, some of which he shares on his real estate investing blog.

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14 Comments

14 Comments

  1. Roland Estrada

    January 2, 2012 at 1:17 pm

    As Ronald Reagan once said, "The scariest thing a citizen can here is – We're the government and we're here to help".

  2. Jeff Brown

    January 2, 2012 at 2:35 pm

    In a nutshell, Roland. Nothing's changed.

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Opinion Editorials

7 ways to carve out me time while working from home

(OPINION / EDITORIAL) It can be easy to forget about self-care when you’re working from home, but it’s critical for your mental health, and your work quality.

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Woman in hijab sitting on couch, working from home on a laptop

We are all familiar with the syndrome, getting caught up in work, chores, and taking care of others, and neglecting to take care of ourselves in the meantime. This has always been the case, but now, with more people working from home and a seemingly endless lineup of chores, thanks to the pandemic. There is simply so much to do.

The line is thinly drawn between personal and professional time already, with emails, cell phones, and devices relentlessly reaching out around the clock, pulling at us like zombie arms reaching up from the grave. Working from home makes this tendency to always be “on” worse, as living and working take place in such close proximity. We have to turn it off, though.

Our brains and bodies need down time, me-time, self-care. Carving out this time is one of the kindest and most important things you can do for yourself. If we can begin to honor ourselves like this, the outcome with not only our mental and physical health, but also our productivity at work, will be beneficial. When we make the time to do things we love, our body untenses, our mind’s gears slow down that constant grinding. Burnout behooves nobody.

Our work will also benefit. Healthier, happier, more well rested, and well treated minds and bodies can work wonders! Our immune systems also need this, and we need our immune systems to be at their peak performance this intense season.

I wanted to write this article, because I have such a struggle with this in my own life. I need to print it out and put it in my workspace. Last week, I posted something on my social media pages that so many people shared. It is clear we all need these reminders, so I am paying it forward here. The graphic was a quote from Devyn W.

“If you are reading this, release your shoulders away from your ears, unclench your jaw, and drop your tongue from the roof of your mouth.”

There now, isn’t that remarkable? It is a great first step. Let go of the tension in your body, and check out these ways to make yourself some healing me-time.

  1. Set aside strict no-work times. This could be any time of day, but set the times and adhere to them strictly. This may look like taking a full hour for lunch, not checking email after a certain hour, or committing to spending that time outdoors, reading, exercising, or enjoying the company of your loved ones. Make this a daily routine, because we need these boundaries. Every. Single. Day.
  2. Remember not to apologize to anyone for taking this me-time. Mentally and physically you need this, and everyone will be better off if you do. It is nothing to apologize for! Building these work-free hours into your daily schedule will feel more normal as time goes on. This giving of time and space to your joy, health, and even basic human needs is what should be the norm, not the other way around.
  3. Give yourself a device-free hour or two every day, especially before bedtime. The pinging, dinging, and blinging keeps us on edge. Restful sleep is one of the wonderful ways our bodies and brains heal, and putting devices away before bedtime is one of the quick tips for getting better sleep.
  4. Of course, make time for the things you absolutely love. If this is a hot bath, getting a massage, reading books, working out, cooking or eating an extravagant meal, or talking and laughing with a loved one, you have to find a way to get this serotonin boost!
  5. Use the sunshine shortcut. It isn’t a cure-all, but sunlight and Vitamin D are mood boosters. At least when it’s not 107 degrees, like in a Texas summer. But as a general rule, taking in at least a good 10-15 minutes of that sweet, sweet Vitamin D provided by the sun is good for us.
  6. Spend time with animals! Walk your dog, shake that feathery thing at your cat, or snuggle either one. Whatever animals make you smile, spend time with them. If you don’t have pets of your own, you could volunteer to walk them at a local shelter or even watch a cute animal video online. They are shown to reduce stress. Best case scenario is in person if you are able, but thankfully the internet is bursting with adorable animal videos, as a backup.
  7. Give in to a bit of planning or daydreaming about a big future trip. Spending time looking at all the places you will go in the future and even plotting out an itinerary are usually excellent mood-boosters. It’s a bit different in 2020, as most of us aren’t sure when we will be able to go, but even deciding where you want to go when we are free to travel again can put a positive spin on things.

I hope we can all improve our lives while working from home by making time for regenerating, healing, and having fun! Gotta run—the sun is out, and my dog is begging for a walk.

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Opinion Editorials

Why robots freak us out, and what it means for the future of AI

(OPINION / EDITORIAL) Robots and humans have a long way to go before the social divide disappears, but research is giving us insight on how to cross the uncanny valley.

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Close of R2D2 toy, an example of robots that we root for, but why?

We hate robots. Ok, wait, back up. We at least think they are more evil than good. Try it yourself – “are robots” in Google nets you evil before good. Megatron has higher SEO than Optimus Prime, and it’s not just because he’s so much cooler. It cuz he evil, cuz. It do be like that.

It’s not even a compliment to call someone robotic; society connotes this to emotionless preprogrammed shells of hideous nothing, empty clankbags that walk and talk and not much else. So, me at a party. Or if you’re a nerd, you’re a robot. (Me at a party once again.)

Let’s start by assuming robots as human-like bipedal machines that are designed with some amount of artificial intelligence, generally designed to fulfill a job to free up humanity from drudgery. All sounds good so far. So why do they creep us out?

There’s a litany of reasons why, best summed up with the concept of the uncanny valley, first coined by roboticist Masahiro Mori (Wow he’s still alive! The robots have not yet won) in 1970. Essentially, we know what a human is and how it looks and behaves against the greater backdrop of life and physics. When this is translated to a synthetic being, we are ok with making a robot look and act like us to a point, where we then notice all the irregularities and differences.

Most of these are minor – unnaturally smooth or rigid movements, light not scattering properly on a surface, eyes that don’t sync up quite right when they blink, and several other tiny details. Lots of theories take over at this point about why this creeps us out. But a blanket way to think about it is that our expectation doesn’t match what we are seeing; the reality we’re presented with is off just enough and this makes us uncomfortable .

Ever stream a show and the audio is a half second off? Makes you really annoyed. Magnify that feeling by a thousand and you’re smack in the middle of the uncanny valley. It’s that unnerving. One possible term for this is abjection, which is what happens the moment before we begin to fear something. Our minds – sensing incompatibility with robots – know this is something else, something other , and faced with no way to categorize this, we crash.

This is why they make good villains in movies – something we don’t understand and given free will and autonomy, potentially imbued with the bias of a creator or capable of forming terrifying conclusions all on its own (humans are a virus). But they also make good heroes, especially if they are cute or funny. Who doesn’t love C3PO? That surprise that they are good delights us. Build in enough appeal to a robot, and we root for them and feel empathy when they are faced with hardships. Do robots dream of electric sheep? Do robots have binary souls? Bits and zeros and ones?

Professor Jaime Banks (Texas Tech University’s College of Media & Communication) spends a lot of time thinking about how we perceive robots. It’s a complex and multifaceted topic that covers anthropomorphism, artificial intelligence, robot roles within society, trust, inherently measuring virtue versus evil, preconceived notions from entertainment, and numerous topics that cover human-robot interactions.

The world is approaching a future where robots may become commonplace; there are already robot bears in Japan working in the healthcare field. Dressing them up with cute faces and smiles may help, but one jerky movement later and we’ve dropped all suspension.

At some point, we have to make peace with the idea that they will be all over the place. Skynet, GLaDOS in Portal, the trope of your evil twin being a robot that your significant will have to shoot in the middle of your fight, that episode of Futurama where everything was a robot and they rose up against their human masters with wargod washing machines and killer greeting cards, the other Futurama episode where they go to a planet full of human hating murderous robots… We’ve all got some good reasons to fear robots and their coded minds.

But as technology advances, it makes sense to have robots take over menial tasks, perform duties for the needy and sick, and otherwise benefit humanity at large. And so the question we face is how to build that relationship now to help us in the future.

There’s a fine line between making them too humanlike versus too mechanical. Pixar solved the issue of unnerving humanoids in their movies by designing them stylistically – we know they are human and accept that the figure would look odd in real life. We can do the same with robots – enough familiarity to develop an appeal, but not enough to erase the divide between humanity and robot. It may just be a question of time and new generations growing up with robots becoming fixtures of everyday life. I’m down for cyborgs too.

Fearing them might not even be bad, as Banks points out: “…a certain amount of fear can be a useful thing. Fear can make us think critically and carefully and be thoughtful about our interactions, and that would likely help us productively engage a world where robots are key players.”

Also, check out Robot Carnival if you get the chance – specifically the Presence episode of the anthology.

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Opinion Editorials

4 simple tips to ease friction with your boss while working remotely

(OPINION / EDITORIAL) Find it challenging to get along with your boss while working from home? Here are a few things you can try to ease the tension.

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Woman stressed over laptop in remote work.

Most people probably feel like their relationship with their boss is fine. If you’re encountering friction with your boss for any reason, though, remote work will often exacerbate it—this is one instance where distance doesn’t necessarily make the heart grow fonder. Here are a few ways to remove some of that friction without adding to your boss’ overflowing plate.

According to CNN, determining the problem that exists between you and your boss should be your first step. There’s one caveat to consider, however: Your boss’ boundaries. Problem-solving on your own time is fine, but demanding more of your boss’ time—especially when you’re supposed to be working—may compound the issue.

An easy way around this is a low-impact communique—e.g., an email—sent at the beginning or end of the workday. Since that’s a more passive communication style that takes only a minute or two out of your day, it’s less likely to frustrate your boss further.

If ironing out the issue isn’t your prerogative for now, examining your boss’ parameters for success is another place to start. Does your boss prefer to receive multiple updates throughout the day, or do they want one summative report each morning? Do you respect your boss’ preferred communication styles? These are important questions to ask during remote work. If you find yourself reaching out more than necessary, for example, it may be time to cut back.

It can also be difficult to satiate your boss if you don’t know their expectations. If you’re able to speak to them about the expectations regarding a project or task, do it; clarifying the parameters around your work will always help both of you. It is worth noting that some supervisors may expect that you know your way around some types of responsibilities, though, so err on the side of complementing that knowledge rather than asking for comprehensive instructions.

Finally, keep in mind that some bosses simply don’t communicate the same way you do. I’ve personally been blessed with a bevy of nurturing, enthusiastic supervisors, but we’ve all had superiors who refuse to acknowledge our successes and instead focus on our failures. That can be a really tough mentality to work with during remote periods, but knowing that they have a specific communication style that hampers their sociability can help dampen the effects.

As always, communication is key—even if that means doing it a little bit less than you’d like.

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