Today as I was sitting waiting for my doctor's appointment, I was mulling over the stuff I'd written earlier today, the whole garden metaphor I was working on, and it struck me that I see even more connections between retirement and gardens than I had realized.
For example, I've read about retirement income being a "three-legged stool" consisting of Social Security, personal savings, and an employer's pension. I've also read in an interesting Prudential publication about the 4 pillars of retirement: http://www.prudential.com/media/managed/FourthPillarRetirementChoices5-10-07FINAL.pdf.
What works for me in these concepts of what supports our retirement income is that we need to have more than one source; both show that Social Security won't be enough, and that's something that a lot of people may not have yet figured out. Something I read recently, the source of which escapes me just now, shared a survey in which some high percentage of people headed for retirement thought they were going to get a pension -- but they didn't have any idea about the source of that pension! Clearly there needs to be more education along these lines.
What does not work for me in the stool legs and pillars concepts is that both indicate those legs or pillars are somehow equally weighted; that is, that a savings stool leg will be of the same diameter as our social security one, or that the pillar for our retirement time behaviors (such as part-time work or downsizing), will have the same diameter, hence the same importance or weight, as our employer pension.
I started thinking about the retirement income stream in another way: as a garden I plant and tend along my way. Each source of retirement income, not only the type but also the time at which we draw it, is a little bit like planting a garden.
Social security and an employer's pension (when we are fortunate enough to have and collect them) are the early-planted perennials of our garden. Maybe they are the evergreen shrubs that are low to the ground. Is it a juniper? The one that spreads is the inflation-indexed social security -- every so often, this one will get pruned back by Medicare premium deductions -- while the non-inflation-indexed pension that was frozen a while back is another kind of evergreen that stops growing at some point. Maybe it's an English boxwood, and it's somewhat more fragile and dependent on good growing conditions than the Social Security juniper.
Along the way, we add to those base plantings with 401(k) and IRA contributions. Depending on how we invest those funds, our crop will have some good years and some not-so-good years. Over time, though, maybe like the daffodils I plant, they will naturalize -- if I feed them, and if I can keep the snails and the neighborhood kids out of them. When there are plenty of flowers I can harvest more, but when I've been a little too lazy in the garden, my cuttings garden is more bare.
That cuttings analogy runs through the drawdown time of contributions, too, not just in the planting. If the solid background of evergreens (social security and a pension, say, or an annuity), are always in the background, supplemented by the retirement behaviors we choose (spending less, one way or another), then we can cut more from our cutting garden (IRAs and 401(k)s when we need to -- when we tend things correctly -- and leave that 'garden' to propagate (earn more interest, dividends, capital gains) in times when it needs to reseed and rejuvenate.
In a way, then, retirement saving and retirement planning both are more cyclical to me, a process in which some parts of the process get more emphasis or are weighted differently throughout our saving and drawdown cycle, a cycle in which we revisit what our garden needs in the way of seed and harvest all along the way.
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