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6 The Perquimans Weekly, September 7, 2005 YOU DECIDE Dr. Mike Walden What will retirement mean? M y wife and I are aging. I won’t tell you how old - especially she- is. But suffice it to say we’re now well past the half cen tury mark. After teaching her 32nd year of elementary school, my wife says that’s enough. She’ll retire after this school year. Although I plan to continue working for the foreseeable future, her decision has caused us to think much more about retirement. Of course, there are a number of important issues to address in retirement, spanning psycho logical, sociological, medical, legal, and financial elements. As an economist. I’ll only touch on the last one. For most of our nation’s history, retirement usu ally meant poverty. Retirement means an end to paid work, and without the earnings from work, many retired people barely got by. Fortunately, this is no longer the case. Although retired households have less income than other households, retirees actually spend more per per son. Indeed, retired households spend more per person on all major expenditure categories except clothing and transportation. It makes sense they spend less on clothes and cars because a significant part of this spending is work related. Of course, the biggest difference in spending between retirees and others is in health care. Retired households spend over twice as much per person on health care than other households. But wait a minute, you might be saying. How can retirees spend more when they have less income? The answer is easy. Retirees don’t save. In 2003, the average retiree saved only $624 annually, compared to $4124 for all persons. But again, this makes sense because a large reason for saving is to build up a financial reserve for retirement. So one hig benefit of retirement is that money doesn’t have to be budgeted for saving, either through Social Security, company pensions, 401Ks, or other personal savings. Retirees can focus on liv ing for now! This isn't to say retirees are home-free with no financial worries. In fact, retirees constantly face one big worry - the possibility of outliving their money. None of us knows exactly how long we will live; in fact, most of us want to live as long as possi ble. But since retirees aren’t working, or at least aren’t working full time, this does leave the ques tion of where the money will come from for expens es much later in life. Of course. Social Security is supposed to last as long as someone lives, although the current debate over its solvency does raise some questions. Certain kinds of company pensions, called defined benefit plans, will also pay out for the entirety of one’s life. For other retirement savings, there are two ways to ensure you don’t outlive your money. One is to only spend the interest earnings from the retire ment funds. Say you’ve saved $300,000 for retire ment, and you earn an annual interest rate of 5 per cent. This method means you’d only spend $15,000 from the fund each year, always preserving the orig inal $300,000. The second method is to use your retirement sav ings to purchase an immediate annuity. An immedi ate annuity will, in turn, pay you back an annual amount. The unique characteristic is, this annual amount wiU be paid as long as you live. You can also purchase an immediate annuity that wUl continue paying your spouse if you die first, although the annual amount will be less with this form. Retirement should be a happy time. I know my wife and I are looking forward to it. However, before you get there, it’s important to decide on the options for both your income and spending. Walden is a William Neal Reynolds Distinguished Professor and Extension Economist in the Department of Agricultural and Resource Economics at North Carolina State University who teaches and writes on personal finance, economic out look, and public policy. The Perquimans Weekly Established 1934 119 W Grubb St., P.O. Box 277, Hertford, N.C. 27944 42&5i728 Susan R. Harris, Editor & Publisher Bev Alexander, Advertising Representative Erin Rickert, Staff Writer Julie Papineau, Creative/Composing Technician The Perquimans Weekly USPS 428-080) is published each Wednesday by The Daily Advance, 216 S. Poindexter St., Elizabeth City, N.C. 27%9. Subscription rates are $24.20 per year in-state, $26.40 per year out-of-state, single copy rate 35 cents. Second class postage paid in Hertford, N.C. 27944. POSTMASTER: Send address changes to P.O. Box 277, Hertford, N.C. 27944. CdTolina Homgiown V, '.-H fc We know what its liko.flnr) we know what to do... My last lottery column? N ow that it is final ly done, who are the winners and losers in the lottery fight? The biggest winner might be you, if you are a regular reader of my col umn. My opposition to a state-run lottery has been so strong that you have had to endure lots of columns filled with my passion about the topic. Your ordeal could be over. The biggest losers might be the biggest supporters of the lottery. The lobbyists and public relations consultants, who have, off and on, been on the payrolls of gambling companies promoting the state lottery, may have worked themselves out of their jobs. Some of them, however, may get a second wind, again representing these companies as they compete to get a contract to run the state’s new gam bling business or working to expand the lottery’s operation. Other losers might be the Democratic Party lead ership. The governor, lieu tenant governor, the house speaker, and the senate leadership took prominent roles in the passage of the lottery this year. In public, they are celebrating and congratulating each other. In private, they worry that they have lost a popular political issue that helped them win the last two gubernatorial elections. They remember what hap pened in South Carolina. In 1998 Democrat Jim Hodges won an upset victory over incumbent Governor David Beasley, on a pro-lottery platform. But in 2002, the South Carolina lottery was in place. Without the “lottery” issue to help him, Hodges lost his reelection cam paign. Similarly, some North Carolina Democrats wish they could have kept the issue on the table for a few more elections. For the same reason, some anti-lottery Republican politicians are glad they finally lost and got the lottery issue out of the way. The deputy leader of the Republican minority in the state senate, Tom Apodaca from Hendersonville, told the Charlotte Observer, “I've always been against it, but I spent my whole week end back in my district with everybody I saw say ing, ‘Please vote for the lot tery’ From that point. I'm glad to get it off the table. I’m tired of hearing about it. We've got a lot of other important issues we need to be dealing with.” Apodaca might have added, “And, having the lot- h' D.G. Martin tery off the table is going to make it possible for us to win at election time.” The biggest losers, over time, may well be the students in public schools. With the lot tery supposedly taking care of school construction needs, local voters may be less likely to approve school bond issues. Actually, even the most optimistic projections of lottery proceeds would cover only a smaU fraction of estimated needs. Also, even though the legislature has “promised” not tp reduce other funding for schools, we have learned that you cannot take such “promises” to the bank. Speaking of promises that might not be kept, don’t count on me keeping the one I made about not writing any more about the lottery. Here is why. The lottery issue might not be over quite yet. Some lottery opponents may be exploring the possi bility of challenging it on constitutional grounds. The North Carolina Constitution requires “rev enue biUs” to be approved on two separate days. The lottery bill was approved on a single day The question then is whether or not the lottery legislation was a “revenue biU.” Here is what the consti tution says: “Sec. 23. Revenue bills. No law shaU be enacted to raise money on the credit of the State, or to pledge the faith of the State directly or indirectly for the payment of any debt, or to impose any tax upon the people of the State, or to allow the counties, cities, or towns to do so, unless...” Is the lottery a tax or does it pledge the state’s credit? You be the judge. John Locke Foundation President John Hood argues “that the proceeds transferred from the lot tery coffers to the state treasury, typically about a third, is a tax.” If a court agrees with Hood, the lottery will be back on the legislature’s table. The Democrats will keep a popular issue for another election season. And you will have to con tinue to endure my anti-lot tery columns. D.G. Martin is the host of UNC-TV’s North Carolina Bookwatch, which airs on Sundays at 5 p.m. This week’s guest is Bill Morris, author of “Saltwater Cowboys, ’’a mystery involv ing shrimpers, fishermen, environmentalists, develop ers, and other residents of North Carolina’s coast. A cycle and a circle continued H igh above the fields a hawk was flying as smoothly as the water flowed back at home in my fountain in the sunroom. Too high to iden tify, it soared with infinite grace and design. Red winged blackbirds gath ered along a line of young willows protruding from a ditch that swayed their ten der branches like a bobbing balloon tugged by a child’s hand. The yellow topaz sun glowed high in a sky, cast ing its mesh of ochre like a gigantic net that pulled every living thing into its amber aura. I was in autumn heaven. It had been far too long since I’d walked these fields and meadows, for I do not walk them quite as smooth ly anymore, nor for more than an hour or two at a time. My physical attributes may be faltering somewhat, but my intense desire to know intimately every crevice and corner of the natural world within my territory is unchanged. I watch it all. As I stood with one hand shading the brilliance of the late afternoon sun from rabbit the My my face, a small but fierce kestrel hawk swooped down within thirty feet of where I stood in the fall meadow and plucked small from grasses, heart felt sud denly torn as a rush of adrenaline flood ed my senses to do some thing to cause the small, swall(j./-like falcon to drop its prey It was only momen tarily though, as I am aU too aware of the cycle of life and what happens when humans interfere. Animals, like this rabbit, are constantly and unique ly resurrected into keeping the circle of life strong. Their lives are rapidly recy cled into other lives, like the meal the rabbit will pro vide for the hawk and even tually its young. It is far too easy for most people to draw cold-eyed conclusions at the witness of these nat ural acts, but those who live close to the land consider it a sacred union. NATURE IN A NUTSHELL Gail Roberson Nature has always been my sanctuary. While others rush around and become lost in the hopelessness of society and uselessness of trivia, I am in tune with the rhythms of the earth. We all need places in which to work and play in where we find strength of body and mind, and espe cially of the soul. If this were a universally recog nized and practiced thing, there would be little short age of the earth’s resources now. Our mental institu tions would be practically empty. We would know everything about our plan et from the depth of the ocean floors to the healing medicines of the rain forests. We could breathe clean air and drink uncont aminated water. Life would be different. I felt as if I were in a great cathedral watching a holy performance. As I pause to watch the female grasshopper laying her eggs beneath the surface of the ground, today I am not walking alone. There is yet another child by my side...a child filled with the same curiosity and desire into which, not that much unlike the hawk and rabbit, I can recycle my own awareness and knowledge. He sees what I see. He feels what I feel. He wants to know what I know. He stands beside me in the sun and absorbs the heat against his skin and watch es the hawks soar through the clouds. He is my new protegee. When I am gone from this place, he wUl someday help reconnect the circle of life that humans have destroyed, and eventually recycle his curiosity and knowledge into others. Doctors tell us that a walk outside is good for your health. I can assure you that a walk outside is equally as good for your soul. I constantly recycle that awareness. Subscribe to The Perquimans Weekly
The Perquimans Weekly (Hertford, N.C.)
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