Can You Ever Retire?

BY Chuck Saletta

Some people live for their jobs -- I just don't know any.

For the rest of us, work is a means to support ourselves and our families. If you're in that second group, chances are that you've asked yourself if you'll ever be able to retire, and if so, when.

Unfortunately, that apparently simple question has a fiendishly complicated answer. It depends on many projections about the future. Some of the bigger ones include:

If you could accurately project what those results will be, it'd become fairly straightforward to plug your current financial data into a spreadsheet and come up with The Answer.

Get real
Answers are never quite so simple. You could, for instance, give France's Jeanne Calment a run for her money as the world's longest-living person. Likewise, depending on your investment strategy and the whims of the market, your overall portfolio performance can be all over the map.

Just think back to the 1970s and the Nifty Fifty stocks. Those were supposedly "one-decision" stocks that you could buy, hold, and forget about forever. Yet looking through that list reveals a number of less-than-ideal results over the ensuing decades. For instance:

Company

What Happened

S. S. Kresge

Became Kmart , went bankrupt,
now part of Sears Holdings (Nasdaq: SHLD).

Polaroid

Went bankrupt, bought out by BankOne ,
which later was acquired by JPMorgan Chase (NYSE: JPM).
Now in the hands of Petters Group.

Emery Air Freight

Struggled, taken over, passed from suitor to suitor.
Successor company now owned by UPS (NYSE: UPS).

Revlon (NYSE: REV)

Leveraged buyout gone bad, now trades around $1.20 a share.

Eastman Kodak
(NYSE: EK)

Trades below where it did in January 1970.

Digital Equipment

Struggled. Taken over by Compaq ,
which itself struggled and was later taken over
by Hewlett-Packard (NYSE: HPQ).

Sure, there were some stunning successes from the Nifty Fifty. American Express (NYSE: AXP) has certainly thrived, as have many other companies from that group. The key lesson is that an investment strategy based on "set it and forget it" runs a serious risk of failing.

A lifelong journey
When you look at the big picture of your retirement, the one thing that should be clear is that there are many moving parts. As a result, there's no simple answer to the question of whether and when you can retire.

Don't let that stop you from trying to get there, though.

© 2007 Universal Press Syndicate.