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A friend is starting a new job with the federal government, and has asked me for help dealing with choices related to the benefits package. In the course of helping him, though, I got the feeling that he's completely screwed. You all are smarter than I am about these things; tell me what you think.
The Story: My friend moved overseas straight out of college in the 1980s, to work in a low-paying but rewarding job in a very expensive country. 20 years later, he was pulled aside by a fellow expat who told him, "the window is closing. You're already in your late 40s and have devoted you life to a field that you can only pursue here; if you ever hope to return to America to live, you need to do so right now and reinvent yourself before it's too late." So my friend did, getting a master's degree, and pursuing a second career -- just as the economy tanked. Finally, in 2014, he's got his first real job with prospects and so-so pay -- at the age of 52.
The Problem: My friend has nothing. No savings (if he ever had any, grad school ate them). No retirement benefits from his two decades abroad. Not even any social security built up (except for part-time work during college and a 1-year contracting position a couple of years back, he's not been employed in the U.S. until now). No family, either, for what that's worth. Basically, he's got a music collection and a friend or two who are worried about him. That's pretty much it.
The Bottom Line: Here he is at 52, earning not that much money (65k, but in DC where cost of living is astronomical) and with nothing saved already. Even his federal pension is likely to be miniscule; if he retired at 67, it would be unlikely to be much more than $12k/year in current dollars.
The Question: Can he ever retire? Should he even bother taking retirement planning seriously? Or should he just get reconciled to dying in the saddle?
The Story: My friend moved overseas straight out of college in the 1980s, to work in a low-paying but rewarding job in a very expensive country. 20 years later, he was pulled aside by a fellow expat who told him, "the window is closing. You're already in your late 40s and have devoted you life to a field that you can only pursue here; if you ever hope to return to America to live, you need to do so right now and reinvent yourself before it's too late." So my friend did, getting a master's degree, and pursuing a second career -- just as the economy tanked. Finally, in 2014, he's got his first real job with prospects and so-so pay -- at the age of 52.
The Problem: My friend has nothing. No savings (if he ever had any, grad school ate them). No retirement benefits from his two decades abroad. Not even any social security built up (except for part-time work during college and a 1-year contracting position a couple of years back, he's not been employed in the U.S. until now). No family, either, for what that's worth. Basically, he's got a music collection and a friend or two who are worried about him. That's pretty much it.
The Bottom Line: Here he is at 52, earning not that much money (65k, but in DC where cost of living is astronomical) and with nothing saved already. Even his federal pension is likely to be miniscule; if he retired at 67, it would be unlikely to be much more than $12k/year in current dollars.
The Question: Can he ever retire? Should he even bother taking retirement planning seriously? Or should he just get reconciled to dying in the saddle?
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