Can You Ever Retire?

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

For the rest of us, work is a means to support ourselves and our families. If you're in that group with me, you've probably asked yourself whether 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:

• How long you'll live
• How well your health and independence will hold out
• How bad inflation will be
• How well your investments will perform
• How much you'll be able to save every year between now and retirement
• What kind of retiree benefits you'll receive

If you could accurately project those results, it'd be 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 could 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. Even ignoring those like Joe Schlitz Brewing, Polaroid, and S.S. Kresge, which these days no longer exist as independent companies, their results haven't all been stellar. For instance:

Sure -- caffeinated beverage giants Coke and Pepsi have gone on to do quite well over the ensuing decades, but oh so many others have failed to keep up with the overall market. Sure, there were some stunning successes from the Nifty Fifty, but there were certainly enough failures to make it clear that they were anything but "one decision" stocks. 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, it should be clear that your future has 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