Life After Work Research Proposal

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Research Proposal on Life After Work: A Case Study Although Assignment

Although retirement is almost never the primary issue in most working young adult's minds, most all Americans have come to expect and even look forward to a leisurely career of relaxation and entertainment once their working lives are over. Even though it may have become the norm in expectations, the concept of retirement is actually quite new, according to Franklin (2008), having been established in 1935 with the development of social security. In fact, the idea of retirement was not intended so much to aid the elderly, but instead to benefit the young workers who wanted their positions (Franklin 2008). But like the college fund that many high school students assume is waiting for them with cash aplenty in their parents' bank accounts, retirement, and the funds to make it possible, is mythical for some. Taking into account the current financial crisis, paired with the fact that many companies are going under, and pensions are disappearing, the fact that many older Americans cannot afford to retire, or are worried about their income during retirement, is understandable and expected. In fact, Franklin points out that only 17% of those working outside of the government will receive "traditional pension checks" (2008). That most older Americans will continue to work during retirement is expected, or at least the goal of a healthy retirement, according to Franklin (2008), who suggests that be working part time or part of the year instead of round the clock, older Americans in retirement will get to experience both "success" and "satisfaction." But whether they're dream is to remain completely retired or to take on some side work doing something that they love, older Americans can still enjoy retirement with proper planning and execution of those financial plans. Still, these older Americans must still consider a variety of variables when it comes to preparing for their retirement, including health concerns and medical costs, the availability of Medicare, the sustainability of savings and the ability to create income, and the possibility of nursing home care. In the following scenario, these variables are considered when deciding what choices a fictional mother and father must make when preparing for their retirement.

The first thing that one must consider when advising this particular set of parents is their age. At 69 years of age, they are both already quite elderly, passed the retirement age by four years. Taking into consideration the recent collapse and bankruptcy of many banks and other financial institutions, whatever assets these people may have had in certain stocks and bonds may now be lost. If this is the case, than it is too late for them to begin reinvesting in new markets, so retirement and level of comfort in retirement will be compromised. If this couple has, indeed, lost money in the recent stock market crash, like they did in the 1990s, then they will most likely have to open a small business or do some other type of work in order to make ends meet in retirement.

Whether or not the couple lost money in the recent crash, however, is unknown to this case study's reader, so, making an assumption that they did not, one can view their situation as it was before the most recent cash, believing that all of their assets, if invested in a bankrupt bank, were FDIC insured. After establishing that the couple has not been injured in the recent financial crisis, the first step to determining where they stand in terms of retirement is assessing their financial competency, or reviewing their finances ("10 Ways to Prepare for Retirement" 2008). In this area, the couple looks as if they are most exceptional. Clearly, they have assessed their financial situation quite extensively and accurately, noting that they have about $40,000 in annual income made up of social security and 401K income, $50,000 of savings in the FDIC insured bank, a $250,000 home, and a $75,000 life-insurance policy on the man, to be paid out in one year. Not only is the grand total, $40,000 a year and $375,000 in assets, rather impressive, but also the fact that they are able to assess their situation so accurately is beneficial for their futures. Although it is hard to imagine, many people are so out of touch with their finances that they don't even know how much they have coming in and going out each month. This amount of cash, and level of accountability, suggest that they will be well prepared for their retirement, especially if there are no medial concerns. However, it may not fit the bill if the parents are envisioning a retirement filled with travel, luxury, and entertainment. After reviewing their finances, therefore, one must ask this couple about their idea of retirement. Do they want to stay in their home? Do they want to travel? Would they be interested in purchasing a retirement condo or living in a retirement village? ("10 Ways to Prepare for Retirement" 2008). One must also ask if they are planning to work during retirement in order to supplement income earned by the 401K.

One must strongly urge the couple to answer these questions before providing an assessment of their financial preparedness for retirement. According to Franklin (2008), "determining the lump sum you'll need to support a comfortable lifestyle in retirement is the most difficult part of the equation," and should have been done long before retirement age. Although a variety of theories exist regarding the determination of this number, what one must consider first and foremost is that the number is an expression of how much will need to be withdrawn from personal savings each year in order to live comfortably. With a $40,000 per-month income and a nest egg of six figures, the couple in this example are not doing as poorly as they could be. In fact, for many older Americans who are working at Wal-Mart's and taco bells across the country, this retirement arrangement would be paradise. They are not, however, necessarily at the top of the income bracket for retired persons. In fact, Franklin (2008) mentions one couple whose $64,000 per-month income is supplemented by a seen figure nest egg. One of the keys to retirement that this couple has, however, is the lack of a mortgage. Without a monthly payment of this size, the couple in this example are able to live much more comfortably than if they had been weighed down with the burden of a mortgage payment. Additionally, owning a house free and clear is an excellent way to supplement assets, and the value of that home will increase their wealth extraordinarily if sold. Although this couple should be advised to determine how much they spend each year as a percentage of their $40,000 income and/or percentage of their nest egg, one can assume that the couple is doing fairly well in terms of the money they will need to live comfortably in their twenty or more years of retirement. In order to insure that this is true, however, one should advise these parents to live within their $40,000 per year income, investing the remainder in limited risk investments managed by a professional, as the father has had some bad luck with investments in the past. They should not touch their nest egg for income, but should only use that money should an emergency arise or the purchase of a large item become necessary. Furthermore, one of the members of this couple, or both partners, should consider getting a job that will supplement the income they already have. Franklin (2008) notes that working longer "may be the key to financial security for many future retirees who haven't saved enough during their working lives."

Indeed, finding a way to earn money during retirement is not only about the income, for some. For instance, Franklin (2008) notes that one retired person decided to begin acting to earn a small amount of money on the side. Although this was initially a hobby in which he participated for free, he soon became a member of the Screen Actor's Guild, a reoccurring extra, and a senior citizen with an extensive savings plan in addition to the $122 a day he makes acting. This second career type of mentality, however, is severely limited by one of the heavier topics of retirement -- medical bills. In this example, both spouses have medical concerns, heart problems for the mother and arthritis and obesity for the father. Although the couple has saved adequately during their life of work, a host of expensive medical bills, without the proper insurance to cover them, will quickly put a damper on their lifestyle of leisure. The fact that both parents have Medicare and supplemental insurance, however, helps, but the fact that insurance does not provide adequate drug coverage nor all costs associated with long-term care is frightening. According to Weston (2008), medical expenses can be the axe hanging over the head of retirement for many. In fact, she notes… [END OF PREVIEW] . . . READ MORE

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Life After Work.  (2008, October 1).  Retrieved August 11, 2020, from https://www.essaytown.com/subjects/paper/life-work-case-study-although/4124239

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"Life After Work."  Essaytown.com.  October 1, 2008.  Accessed August 11, 2020.
https://www.essaytown.com/subjects/paper/life-work-case-study-although/4124239.