Monday, April 13, 2015

And now...the end is near!

I have had a great career. True I was laid off and went through two down cycles in the airline industries. I have lost a house and spent a few sleepless nights worrying about how to make it until the next pay check. But, in the grand scheme of things it has been a very successful and profitable career for me.

I was at work the other day and one of my co-workers came in. He said that something interesting happened to him on the way to work. He left his house at 3am and needed some coffee so stopped by the local AM/PM convenience store.

He gets his brew and the guy behind the counter asks him if he is an airline mechanic. Not too big of a leap since my buddy was wearing a SWA Mechanic jacket. He tells the guy yeah and the guy starts asking about the job.

My buddy realizes this guy knows what hes talking about simply by the questions he was asking so he asked the guy what his background was. It turns out he retired from World Airways as a mechanic. "No way" my buddy says. The guy lifts up his shirt to display his World Airways belt buckle!

The airlines used to offer us employees really great pensions. These pensions slowly but surely started to disappear in the 80's and now not one American airline offers it's mechanics a pension plan. As most American companies the pension plans of old have been supplanted by the 401k plan.

The 401k was never designed to be a retirement savings plan but it is what most companies offer and so it is what most mechanics depend on for their retirement savings. There are a few drawbacks to the 401k that are alarming. The most troublesome to me is that it pretty much follows the stock market. Also it is often difficult to switch your investments within the 401k and most plans limit the choices you will have to invest in.

All this has come to my attention because as a person who wants to retire early in life I started doing some studying. Did you know that 75% of working Americans have less than $10.00 saved for retirement? Scary huh?

Long story short what I've learned is that to really enjoy your retirement you must diversify your savings. 401ks are good but you have to have some investments outside of them to really see your retirement savings take off.

Airlines are great, and being a mechanic is a source of pride for me. I've heard too many stories of old airline mechanics working way past the age of 70 and never retiring. Old airline mechanics retiring and having to work at WalMart to supplement their retirement income. Old airline mechanics retiring and passing away within a year or so  because they worked too hard for too long and their bodies are all used up.

The way for me is going to be retiring early rather than later with enough income from my investments to allow me to continue living in the lifestyle I'm accustomed to.

We are all living longer these days. Males tend to live into their 80s these days and that number is going up and up. Will you 401k be able to support you for 20 years after you retire? How about 30 years? Start thinking about it now so I don't have to hear any more stories an old mechanic working at the local AM/PM convenience store after 30 years at World Airways.

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