No Substitute for Solid Retirement Planning

Friday, 23 Sep 2011 11:31 AM

By Ben Stein

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Recently, as my wife and I were shopping at a grocery store in West Hollywood, we found ourselves in the dog food section. I saw a brand that was new to me: Paul Newman’s dog food, made with lamb and other delicious ingredients.

I thought I might try a few cans for our many hounds until I saw the price: $2.50 for a single-serving can. I was floored. Obviously, that was way too much, so I looked for our familiar Science Diet brand. That was about $1.15. And suddenly a thought washed over my poor little brain: Wow. The world has changed in a lot of ways, and prices are one very big way.

I am endlessly amazed at how much everything costs compared to when I was a child in the 1950s. If I remember right, a can of the bargain-brand dog food we used to get was about 15 cents, maybe a little less.

But that’s just one tiny example.

We lived in a beautiful Maryland home my parents had built in 1952-53 with a famous architect. It was not lavish, but a perfect avatar of ’50s modern, with maybe 2,500 square feet of living space. It cost about $36,000.

In 1956, the most lavishly equipped Cadillac you could buy was about $5,000. A visit to my allergist for a desensitizing shot in 1957 was probably $7.

A well-placed apartment in Manhattan in the mid ’50s might have been $300 per month for a three-bedroom pad.

Now, when I was a child and my parents told me how little goods and services cost in the ’20s and ’30s, I really could not believe it. Today, when I tell young people about prices in the ’50s, they think I am joking.

Even when I tell people about what I paid for housing in the ’70s, they are stunned.
My first tiny little house in Wesley Heights, a super-prestigious neighborhood in northwest Washington, D.C., was $55,000 (which I could ill afford).

My salary at the White House in 1974 was $25,000, and I considered myself well-heeled.

My first new car was a Subaru FF-1. It cost $1,800 including tax. That’s eighteen HUNDRED, not thousand.

When I moved to New York City in 1974 to work for The Wall Street Journal, my wage was $21,500 per year, and I had a penthouse apartment on the water in Brooklyn Heights, a great neighborhood. It cost $500 per month.

To put all of this in an easy perspective, our housekeeper gets paid 3 1/2 times per year what I got paid to write editorials and columns for The Wall Street Journal just 35 years ago.

There’s a point here beyond reminiscence. Two points, actually.

One is that when prices change that much, people are left disoriented. In addition to all of the other changes in daily life, such as alternative lifestyles now being commonplace and the endless threat of terrorism and the collapse of the schools, we now have a price structure that is frightening.

Closely connected, we now know that we have to face the prospect of price increases in the future.

Yes, when we retire we generally spend less than when we were working, for obvious reasons. But we also have to face the fact that if we live for 20 years after retirement, we may well face prices that are half again as high as they are now.

This calls for serious savings, for serious investments, for serious investment advice. In 1958, a fully loaded Rolls-Royce was $12,000. That barely buys a low-end KIA now.

Obviously, few of us will live for 55 years after retirement. But the direction of prices is clear and dismaying.

Let me tell you once again . . . time for a great retirement planner and for professional money management advice.

You don’t want to be eating $20-a-can dog food, or worse, not be able to afford it.




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