How France Has Changed My View On Retirement
How France Has Changed My View On Retirement
In the wake of recent events, I’ll tell you what led me to change my view on retirement. Believe it or not, there was a time when I would forsake my own immediate needs and wants to save for my future. I would even contribute a large percentage of my paycheck to my 401(k) because I knew retirement was something I wanted sooner rather than later and I wanted to secure my future. To me, my future was more important than caring for my present needs. However, the future and the dream of retirement as of recently appears to be uncertain.
France In The Headlines
I opened Reddit one day and saw France trending for increasing the retirement age – without a vote. Their president Emmanuel Macron has increased their retirement age from 62 to 64. You could say a reason may be to allow more pension money to flow into their system. You could say this may seem justified by their government since people are living longer. Or you might think it’s justified because they have one of the lowest retirement ages compared to other countries and it’s about time they “catch up”. Clearly, there is no incentive for any government to want to pay more in retirement pensions than they have to. Regardless, the opinions of the people were not taken into consideration. It may seem like such a trivial matter to protest over since their retirement is lower than other countries.
Many French citizens place a high value on work-life balance, quality of life, and retirement which is why many are opposed to it. The status quo is being interrupted.
Although I’m not affected by their government as an American, I felt sorry for them. This led me to feel even more sorry for us.
To the citizens of France – the world is watching you. We feel for you, we support you, and we want to defend like you. This war on the working class spans the entire globe and you just happen to make the headlines.
The Relevance of 49.3
You’ve probably been seeing lots of photos and references of the citizens of France showcasing 49.3. If you’re wondering what this means, it is a reference to the French constitution. Article 49.3 allows the government to pass a bill without a vote. Although legal, it’s viewed by citizens as undemocratic since it does not take their vote into consideration.
If there is any opposition by lawmakers they have 24 hours to file a no-confidence motion against the government. With the right amount of supporters, it can succeed with a majority of votes. If the no-confidence motion fails, the bill stands. A no-confidence motion was pushed to the national assembly which was rejected. This in turn makes the new pension plan law.
The World Is Watching
This is what you call protesting for a good cause. The reactions of the citizens of France was justified considering their government just took additional years of their life away from them. I think we can learn a thing or two from them. However, this does not come without consequences.
Imagine if America reacted how France did, specifically in states that are anti-protest. This could lead to jail time, fines, and even death. Even if you peacefully protest in America you are automatically seen as the threat. It seems like it would be in our best interests as a nation not to react because of the consequences. This is the unfortunate reality of the American political system. Another reality is that our healthcare is tied to our employment since we do not have universal healthcare in America. Many cannot afford taking time off from work nor would they want to risk getting fired. As a result, there is not much change. This is why I respect France’s right to defend themselves against a greedy government.
This is why it is important to advocate for yourself both financially and as a people. Our government seems so divisive with one political party arguing with the other. For the United States, we are not very united. I say with all neutrality that whether left or right wing, it’s the same bird.
How France Has Changed My View On Retirement
Based on the current political climate of France I’ve changed my own view about retirement. Not everyone has a pension but many do have a 401(k) through their employer. I strive to have a balanced view of the present and future. I’m not going to rob my current self of my basic needs and reasonable wants nor will I rob my future self of a comfortable retirement, even if I have to provide it to myself through other means such as a brokerage or savings. In addition, the IRS allows penalty-free withdrawals from retirement accounts such as a 401(k) after 59½. Although the current retirement age in the US has increased from 65 to 67, you can receive reduced social security benefits as early as 62.
Keep in mind that there are no guarantees and be realistic. There is no guarantee that you will live past 67. There is no guarantee that the retirement age will not be increased by the time you’re eligible to retire. And have realistic expectations of the political system not doing things in your favor. You absolutely need to advocate for yourself and your future and not leave it in someone else’s hands.
“I have learned to seek my happiness by limiting my desires, rather than attempting to satisfy them.”
John Stuart Mill
My view on retirement has also changed in regards to home ownership, the “American Dream”, and simple living. This has caused me to reduce my wants and strive for a simple and stable life in all aspects of the word. Instead “I have learned to seek my happiness by limiting my desires, rather than attempting to satisfy them.”
What This Means For You
This means that you need to vouch for yourself by securing your future through taking advantage of other securities outside of retirement resources. These can include brokerage and savings. You may have to rely on these investments before any retirement pensions such as social security or 401(k) kick in.
Keep in mind that if you have an employer matched 401(k) you may still want to contribute up to the limit to receive their match. This way you receive a 100% return on investment. One advantage of a 401(k) is that they offer target date funds which are diversified to balance out your portfolio automatically to mitigate risk. These risks include longevity risk, market risk, inflation risk, and the risk of deflation.
It is also important to value your work-life balance because this will be the one thing that keeps you in a balanced state with a healthy view of work. As with all things, your life should be perfectly balanced with you in the driver’s seat – even in turbulent times.