Late Career Resiliency

The Wall Street Journal took up the conversation about people close to typical retirement age being forced out earlier than they expected. The article notes the difficulty in getting any job (it takes longer) and the low odds of making the same income. There was also discussion about lower job quality which they defined as a job with no benefits, or as I think was also implied, a job with lousy benefits. 

This is an important subject and the solution is homegrown resiliency against the unexpected. No one is going to solve your problem for you. This is where the idea of independence, differentiated from having a lot of money comes in. Morgan Housel said to Shane Parrish that "rich is making your payments, wealthy is independence."⁣ I would also add the importance of health and fitness to this equation. 

There is overlap with this topic and the FI/RE movement, financial independence/retire early idea that has become popular in the last few years. When I read stories about people who FIRE'd at a young age, they almost never have actually retired. They typically accumulate impressive sums for their age living very frugally which I equate to paying dues and then figuring out how to cobble together several side hustles or may just one pretty good side hustle which allows them to own their time and have optionality to go without income for a time, maybe a long time. 

These stories sometimes don't add up, like this one, but it does seem like a lot of the FI/RE proponents have figured out the resiliency an optionality aspect which is something that people close to typical retirement age who get forced out early also need to do. 

Like with many things, this is an area where planning for everything to go as hoped for is a mistake waiting to happen. No one needs resiliency in the face of very good luck or outcomes. Resiliency is protection against the things that can't be seen coming. 

Something bad could happen to the company where I hang my shingle and I probably wouldn't get a ton of advanced notice. I am convinced they are doing all the right things but I don't know what kind of trouble they would get into if someone else hanging their shingle there like me was doing something terrible, they miss it somehow and then it gets caught during a normal SEC review (firms registered with the SEC are subject to some sort of regular review). Beyond that, I don't try to guess what could go wrong so much trying to prepare if something goes wrong. 

A couple of related follow ups. I've been saying that above some certain age, people won't be impacted by any sort of cut to Social Security payouts. Senator Bill Cassidy who has come up with a bipartisan idea working with Tim Kaine, told Barron's that if/when cuts come, everyone will be impacted. 

My belief on this came from several reads, quite a few years ago from people I believe had less motivation to spin and scare people than a sitting US Senator. But in the same vane as above, it would be better to plan for it being cut than not. Agreed, there would be absolute hell to pay if they imposed a cut but I would suggest including an assessment of your retirement planning numbers that assumes there is a cut. 

One thing I've said that appears to be correct is that if you find yourself out of work, chances are health insurance through healthcare.gov will be very cheap or even free. I plugged in my scenario without my day job income, so I assumed our rental income plus the stipend I believe I will be getting from the Del E Webb Foundation next year and for a silver plan, the linked calculator said we'd pay $329/mo and that a bronze plan would be $0/mo. 

I don't expect to need to worry about this but it is a tangible example of the importance of staying fit and healthy. I don't know, but I can't imagine the bronze plan is too much worse than what we've had for quite a while now. If your financial back was against the wall, would you be interested in free health insurance? It sounds like a terrible idea for someone who is not healthy and needs to go to the doctor frequently but it sounds like a godsend for someone who is healthy and just goes for a physical every year or two. Yes there might be some sort of bigger than normal rate increase for 2026, but at low income levels, I think the plans would be cheap.

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