People are laughing and smirking at Suze Orman’s new retirement warnings. Especially the younger generations. That’s because with age comes experience and the younger generations just don’t have the needed experience Orman is talking about. At 67, Orman is discussing what other retirees she’s been meeting lately, have been telling her: they just weren’t prepared for The Retirement ‘X’ Factor. That’s when things go seriously wrong that no one could have predicted. Not you. Not the financial experts nor the political pundits.
Not sure about what I am talking about? Look at this photo and you will know what I mean:
This photo represents the aftermath of Hurricane Michael. Most every expert in this section of Florida, clearly stated, over the years, that a Category 4 or 5 hurricane could never reach the panhandle nor would anyone ever suffer such destruction and annihilation as witnessed when Michael passed through.
Florida’s building code, put into effect in 2002, is famously stringent when it comes to windstorm resistance for homes built along the hurricane-prone Atlantic shoreline. But it is less so for structures along the Panhandle, a region historically unaffected by storms as strong as the ones that have slammed into South Florida.
After Hurricane Andrew, a Category 5 beast, ravaged Miami-Dade County in 1992, new construction in the southern portion of the state was required to withstand 175-mile-an-hour winds. In the coastal Panhandle counties affected by Michael, the requirement is lower, for 120 to 150 miles an hour, and the rules for certain kinds of reinforcement have applied to houses built more than a mile from shore only since 2007. Many of the residences and businesses rubbed out by Michael in Mexico Beach were far older; rebuilding them to conform to the new code will be expensive, and could price out some of the working-class people who historically have flocked to Mexico Beach.
The world that we retirees saved and planned for back when we were younger, will not exist for us now in our retirement years. We all have to deal with ‘The Retirement X Factor’. Things that we never could have thought or planned for, do and will happen. That’s what Suze Orman is seeing in her current retirement rounds and that’s what both you and I fellow retirees should start thinking about.
Many of the residents who currently live in the Florida pan-handle are retirees in their 70’s. Many of them own homes built in the 1970’s and most of them rely solely on Social Security checks as their main source of income. Most of them do not have savings accounts nor were their properties insured. Many of them are in poor health. Almost all of them are facing dire difficulties and deep financial troubles.
Many in the Panama City region are facing these hardships: They have damaged homes, no power, and don’t have the resources to relocate, either to a new home or a temporary home. While others with more means have gobbled up hotel rooms in Destin 45 miles to the west, there are many who now no longer have a job and are forced to stay in damaged homes.
Despite fallen trees through their roofs, mud damaged interior rooms, debris almost everywhere, many homeowners have no choice but to live in their damaged homes because they lack the resources to do anything else. Many of these retired homeowners are also in bad health.
Clinton Moseley, 55, was cleaning limbs and debris from the house he shares with his 81-year-old mother, Rebecca. An enormous tree crashed through the roof above one of the bedrooms of the house. Water gushed in, but he said they’re staying.
Moseley, who lost his right leg below the knee, was sweaty and tired as he tried to clean up. He doesn’t have a job and his mother is staying in the house in a particularly hard-hit neighborhood.“Where the hell do you go?,” he said. “I survive. I got one leg. I survive … I don’t have nothing. I ain’t going nowhere.”
Gay Little, 72, returned home to gather her belongings. Little lives alone in the house. She has insurance, but she doesn’t have cell phone service to get ahold of her insurance company. She’s disabled and her only income is Social Security. “I don’t have anybody but me, and I’ve lost everything I’ve had,” Little said. “I get enough just to pay my bills. I have $3 a month leftover.”
“We’re lucky that we at least have a place to stay. There are people walking up and down the road with backpacks and no place to go.”
What’s the one thing most of these retirees are lacking: savings accounts. And that’s what Suze Orman was preaching. Retirement is expensive and unpredictable. That’s why Orman recommended having millions of dollars in the bank. While I agree with most Orman nay-sayers, millions in the bank is just not possible for most of us. But, always having at least a 6 to 1 year emergency fund is possible for almost all of us!
Being prepared for The Retirement ‘X’ Factor means having a secure, FDIC savings account somewhere, somehow, specifically to help cover the costs of recovery, rebuilding and/or relocation. You should keep this account intact and forever. Whatever sacrifices you have to make to squirrel this money away, do it. ASAP.
And we can smirk and pooh-pooh Suze all we want. In the end, however, she’s probably right. Things are happening to all of us that defy righteous thinking. Life is bizarre, for sure. Bad things happen to everybody.
Live well and prosper, my friend. Live well and prosper. Fingers crossed.