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Thursday, December 1, 2016

The Future of Retirement

It has always been very difficult to prophesy about the future. As we look down the road we must wonder what retirement will look like for our youngest generations, the Millennials, and whatever we will name the post-Millennials. I remember clearly when I was in college a book had just been published titled Future Shock. 

In it, the author, Alvin Toffler, described a psychological state of shock that was brought on by rapid change in the world around us. He predicted that people would have lasting, negative psychological effects because, in the post-industrial world, change would come so rapidly that most individuals would be unable to adjust. He was, of course speaking of his own World War II generation and, perhaps, of the Baby Boom generation. What he hadn’t counted on was the coming of a generation that was born into change. 

The Millennial Generation is so named because they were born at the time of the transition from the second to the third millennium after the birth of Christ. More importantly, however, is the fact that this generation was born after the advent of the internet and has never known a world without computers and without incredible access to information by way of the internet. To them, these things are usual and ordinary. There is nothing special or even new about them. Toffler referred to a thing called “information overload” when individuals were faced with too many sources of new information. For the Millennials there is no such thing. 

Rapid change is expected because it is all they have known. How quickly the human species has adjusted. In just two generations the speed of change is now imperceptible because it is the way it has always been! I refer to this here because as we look to the future world of the Millennial Generation, the colloquial phrase comes to mind, “you ain’t seen nuthin’ yet!”I have the great honor and privilege to work very closely with two young men in a business partnership who are members of this generation. 

I will admit that I had some doubts as I entered this relationship. I thought that we would have little in common and that we would have difficulty communicating. I remembered how difficult it was communicating with my parents who were children of the Great Depression. 

They had such different values and such a different model of learning. I surmised it would be the same for me working with someone who could be my grandchild. I have been amazed at their openness and their solicitude toward me. I sometimes feel that I am always running to keep up, but they seem to admire my efforts and they always value my input and my experience. 

I have a whole new appreciation for this generation, their drive, determination to succeed, hard work, integrity, dedication to advance humanity, and the will to make a positive contribution to others. I am often humbled by their work ethic and their willingness to put in very long hours even though they sometimes see little (as of yet) by way of return. 

This, of course, is destined to change. At my age I thought that it would be difficult for me to be surprised, but all I have seen so far has been a very pleasant and hopeful surprise to me. As I contemplate a future that I will never see, I am filled with great hope for what this generation will accomplish. I recently re-read an internet posting that puts some of the things that are happening into perspective. The posting came to me anonymously, so I don’t know who to attribute it to, but I am relatively certain of the facts presented. It talks about the pace of change we are currently experiencing and some of the effects it will have, even on my generation. The author points out changes that we have already experienced and to which we have already adjusted. Take, for example, a company that my generation grew up with and that was a household word – Eastman Kodak. 

When I was growing up everyone had a Kodak camera and when they got their film developed, they had their photos printed on Kodak paper. In 1998 Kodak employed 170,000 workers and 85% of all photos worldwide were printed on Kodak paper. Today the Kodak company no longer exists. Who knew that the digital industry, which began with extraordinarily inferior equipment in the 1970’s, would rapidly advance to eclipse the previous photographic industry, making it so that no one prints photos any more, and put an entire, established industry out of business? The same is currently happening to the auto industry. Driverless cars will be introduced in 2018. They will likely be seen as “quaint” and somewhat inferior. 

Just like the early digital cameras. Let’s look at what is currently happening, though. Uber, which is nothing more than a computer application, owns no cars, but is now the largest taxi company in the world. Airbnb, another computer application, owns no properties, but has become the largest hotel chain in the world. The generation coming up after the Millennials will never get a driver’s license. To take a trip you will call for a car, which will arrive (driverless), pick you up, and take you wherever you want to go. There will be no need to park. The car will just go to its next appointed pick-up. 

Because you won’t have to drive, you will remain productive on your commute, so you may decide to move to the “super-boonies.” Who needs to live in a crowded city? Even there, noise levels will be drastically reduced because of less traffic and less noise from electrically powered cars. Parking lots will be re-purposed into green spaces and playgrounds. Medical advances will be some of the most astounding. Because of my medical condition, I am in need of a kidney transplant. 

If I get one, I will spend the rest of my life in need of very expensive anti-rejection drugs with sometimes terrible side-effects. Worse than that, in order to receive a transplant I either need a willing, far beyond heroic, donor to sacrifice an organ from his/her body, or, like some kind of ghoul, I need to go on a list and wait for some otherwise healthy organ donor to be killed in an accident or die of some other causes. In either case, I feel dirty just thinking about it. In the not-too-distant future medical science will be able to remove stem cells from my body, put them into an advanced 3D printer, and manufacture a kidney that is made up of my own DNA. My body will accept the organ as my own and I will not require any other medication. 

The Millennials will experience all of this and so much more. They will be able to live long and productive lives far beyond the age of 100. Speaking along these lines, though, with the advent of driverless cars will also come a huge decrease in accidental deaths. Today there is about one death for each 100,000 kilometers driven worldwide. Automated cars will reduce that statistic to about one in 10 million kilometers driven, saving the lives of over a million people per year. 

So much for my waiting list!I have always been a sci-fi buff and I remember reading several of Isaac Asimov’s robot novels. In particular was his 1983 novel, The Robots of Dawn, which was really a classic murder mystery. What struck me about the book was the population of the futuristic planet, Aurora (or Dawn), where the story took place. People there normally lived about 200 years and remained productive throughout their lives. Because of long life, they were able to work on complex projects for decade after decade and make tremendous scientific progress. There was little thought of retirement. 

Though this future may be a long way off, upcoming generations should take a serious look at the length of their productivity and, really, how long they expect to be retired. There is a lot to be said in favor of leisure; especially if it is active and filled with things a person enjoys doing. I remember my mother who retired after working for many years. She was always active, but most importantly was used to being out of the house. Just a few weeks after her retirement she came to me asking for a part-time job. The fact that she was now at home full-time with my father was driving her nuts. 

They had never spent that much time alone together and, even though they loved each other, they soon found that they were happier with more space and time away from bad habits and eccentricities. The same is true for most of us. We need to choose wisely how we will spend our retirement years – and for how long. Millennials may want to start planning now that they will stay active and employed (or at least doing something that contributes to the welfare of society) until age 85 or 90. 

I guarantee that, barring a gross error in my estimations, you will be healthy and energetic far beyond those ages. Thinking of retiring at age 65 could give you 40 or 50 years of retirement – or more. I suspect, however, that long periods of inactivity and lack of proper stimulation could result in a shortening of the life span. Staying active and productive as long as possible, especially with good health and stamina, will lead, in turn, to even longer life. Medical advances are now on the cusp of eliminating age-related illnesses such as Alzheimer’s disease and other forms of dementia. Genetic advances are closing in on cures for cancer and I’ve already spoken of looks not only bright, but very long.So what do we at Grilo Enterprises recommend for you? First and foremost, start as early as possible to save money for the future. 

There is a saying we use about this that will be as relevant in the future as it is now. That is, "It’s not how much money you make that counts, it’s how much you save.” As my business partner, Guilherme “Guigo” Grilo likes to point out, “Retirement is not an age, it’s a plan you put in place for the future.” You should not rely on what the government or your employer suggest as the time to retire, but on the plan you have put in place for yourself. Guigo would also say that you have to have the right kind of plan in place. There are many well-known and company-sponsored plans that you may have heard of, but they may expose your future to the volatility of an unpredictable stock market and other forces that are not in your best interest. 

Grilo Enterprises will be happy to sit with you to introduce you to other options that could give you better peace of mind. As I have mentioned a number of times in other articles, one of the best assets you have on your side is time. With the proper plan, started early enough in your career, and with only modest effort on your part, there is no reason why you could not be a multi-millionaire when you decide to retire. Moreover, these plans avoid the catastrophic loss of assets (as much as 30% or more) through taxes, penalties, and hidden fees. Because time is so essential to your future plans, there is no time to delay or waste. 

We recommend, in the strongest terms, that you sit with a professional financial planner as soon as possible so we can introduce you to the plans you have never heard of and which are probably the best for you and your future plans. Don’t delay. 


Retirement for the future generations will present itself in a number of different ways. A decision that many will make is that they will hold their jobs and keep on working well past the age of 65. After all, if you retire at 65 you may well spend as much time in retirement as you did actively working. Will you have the resources to sustain yourself for that long?

Remember that Social Security as we know it will not be there for you. The wisest choice for those who are healthy and strong will be to continue working until age 85 or 90. This will give you even more time to accumulate funds into your retirement accounts. Another group of people will want to slow down their work lives by taking a less stressful position with their current employer. 

They will work fewer hours, take long weekends, and enjoy more of life. This could also go on long past the age of 65. Some in this group will find a second career in an area of personal interest. With reduced income, they could start drawing off retirement savings to supplement their lifestyles and live very fulfilling lives on their own terms. Still others, who have planned wisely and well, will be able to step away from paid work altogether. They will have saved enough to live comfortably for the rest of their lives. 

Far from sitting around the house, they will pursue hobbies, get involved in volunteer activities, pursue stimulating leisure activities, and make further important contributions to society. Retirement on these terms will have a whole new face and a whole new definition. What a wonderful future it will be, if only we plan for it to happen today.