This is a simple response to an important question, "What is the Retirement Bubble about?" I could write a book on that, but I am going to make this far shorter. Thus I will have to leave out a lot of detail, but it is important to keep the focus where it belongs.

Okay, so what is the Retirement Bubble about?

It is not about Social Security, Medicare, or any other government program.

It is not about political philosophy or politicians.

It is not about the global financial crisis.

It is not about some kind of "generation gap".

Here's the big one. It is not just about money.

The Retirement Bubble is about your ability to accurately predict your financial and life situation for the next 20, 30, 40 or more years in the future. That is what it is about.

If you have already read Where Will You Be in 30 Years?, you know that I admit freely that I was unable to predict the last 10 years of my life 10 years ago, much less the last 20 or 30 years. If you have an established record of making such long-term accurate predictions about your own life, congratulations! And get to work on the book!

Frankly, even allowing for an exception somewhere out there, I simply do not believe that human beings are capable of making such long-term predictions with sufficient accuracy not to have to worry about the actual results. If you believe you can, more power to you and you are very welcome here, but this blog is not written for you. It is written for people like me.

This has always been true of retirement, but in decades now past, retirees planned for 10 or 15 years, 20 at the outside, and they were rarely disappointed. That simply is not enough today and I sincerely doubt it will be enough again any time soon, if ever. And when those in the past did outlive their money, they were small in number and society could deal with it.

The dangers are even greater due to the special nature of traditional retirement…the decision to no longer earn income, but to live off government payments, pensions, and asset appreciation. In other words, as I have said before here, to depend on the kindness of strangers.

If you switch careers at any age, you take a risk. Five or ten years later, you may decide the new career is not what you had hoped for. You may choose to return to your old field of work or move to another. This is never easy, but at least you can offer a resume that demonstrates your "work ethic" has been intact throughout and that you have picked up some new skills that can benefit your new employer, along with your recent work record and references.

But when you have not been working for five or ten or more years and try to return to the work world, you have nothing to show but a blank at the top of your resume. Whether it is visible on paper or not, your would-be employer will "see" it. And let's face facts, after that much time out of the work world, you will have lost many of the habits and standard practices expected of an employee and you will have to relearn them. If switching employment fields involves a risk, the above scenario involves far greater risks. Worst of all, you may no longer be physically and/or intellectually capable of returning to work when you are finally in need of it.

I have been asked why I use the word "bubble" in regards to traditional retirement. In my mind, the bubbles of the stock market in the late 90's and the housing market of recent years were not price bubbles. They were expectation bubbles. They were made up of expectations based on predictions that did not pan out. For many good people, these bubbles did not pop; they exploded. That is why I say the Retirement Bubble is not a matter of Social Security payments or asset values or generation gaps. The Retirement Bubble is an expectations bubble, based on predictions of an unpredictable future, and one that can explode at a time in our lives when we are least capable of recovery.

I believe we need to reduce our traditional retirement period substantially. If you don't want to continue in your current employment or if you don't know what else you might do for income, I recommend a Life Sabbatical approach that allows you time to find that new earned income opportunity doing something you really want to do. Whether that is a part-time opportunity or a full-time opportunity, that is your decision, but it should be something you enjoy doing. That can be far more enjoyable than having nothing to do at all and being dependent on others.

But one thing seems clear, waiting for this bubble to explode in your life is not a good idea.

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