Saving for retirement is a gamble. We may need it or we may not.

Assuming we compare two people. One saves for retirement and prepares for the future. The other person doesn’t save and throws caution to the wind.

If both people die before age 65, the saver was the sucker. The one who didn’t save was the winner. He spent and enjoyed all of his money during his life and didn’t worry about retirement, or the stock market, or property prices.

Work until you die

If you never saved for retirement and you live past the age of 65, you might have to work until you die. But this alternative could be a good thing or a bad thing. If you hate your job, working until death is not a good thing. But even there, for many older people, the major complaint is not doing an unpleasant job, the biggest complaint is facing loneliness and isolation.

By age 65, many people have found a job or created a business where they feel content with life. Feeling like a contributor to society has some moral and psychological advantages, so even in this scenario, the person who didn’t save still came out ahead.

Consider all the people who have enough money to retire, but who decides to continue working. Most millionaires and billionaires fit this category.

Then, at a given moment, that person is unable to continue working. At that moment, government programs will pick up the tab.

Relying on the pension

I have a friend who works at one of the major Canadian universities. He has zero savings. He relies 100% on his pension, and there is no shame on that. His standard of living will diminish a bit, but probably not by much. At the same time, when people become older, they spend less money, so a lower income might not be a major inconvenience.

The disadvantages of not saving for retirement

Living on government help is not pleasant. It’s hardly enough to pay off one’s expenses. It wasn’t meant to be a retirement plan, it was meant to be a help for retirement income.

Also, if you depend on pension income, most of the time everything goes well, but there are those times when the governments or the corporations paying the pension default on their payments. Does anyone remember Nortel?

At times, the uncertainty of depending on a corporation or the government for your livelihood can be quite unsettling and worrisome.

Some ways to counteract the lack of money is to get a part-time job to supplement the government income. Up to this point, we all have seen it, older people working at Walmart as door greeters, at McDonald’s mopping the floors,  or in many others low income, low responsibility kind of jobs. I have seen a few older people working for Uber, just working a few hours to make ends meet.

It’s not a horrible strategy

Overall, not saving for retirement is not a horrible strategy, but to my opinion, it’s not the best.

What’s your take?

Are you saving for retirement?
Are you taking your chances?

Let us know in the comments below.

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