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Category: News & Current Events / Topics: Choices and Decision Making Opportunity Planning Statistics

On Average

by Dan Seagren

Posted: March 30, 2008

I’m wondering just how many people enjoy being classified as average: as an average man, child, athlete, businessman, CEO, preacher, surgeon, politician…

I'm wondering just how many people enjoy being classified as average: as an average man, child, athlete, businessman, CEO, preacher, surgeon, politician. Average somehow fails to kindle a lot of enthusiasm although no doubt considerably more than ‘below average.'

Now, having said this, I suppose we should consider how average is used: in mathematics, sports (batting average vs. average ability), old Italian (avaria: damaged goods), Wall Street (to purchase shares successively to equalize). Then there are synonyms: medium, mediocre, fair, middling, indifferent, tolerable, typical, usual, mean, norm . . .

What prompted this was an ad by Allstate with this heading: The average woman spends 11 years out of the workforce taking care of family – leaving her without enough retirement money to take care of herself. It continues reminding us that those 11 years are spent doing important work, for children or elderly parents (my wife was out of the workplace from 1959-1986 and then worked part-time, no benefits but a most enjoyable decade plus for her).

The ad continued by saying that women are still earning less than men do [for comparable jobs especially]. Those 11 years the ad mentioned cost her an average of $659,139 in earnings. Those are Allstate's figures. Not sure how that was computed ($659,139 divided by 11 years equals $59,921.77 per annum). But then, that's the average. Some earned less, others more. We also don't know the years involved in the computation.

The article also mentioned that only 47% of working women participate in a company retirement plan. Allstate encouraged women to avail themselves of employer options. And of course, the earlier she starts, the more prepared she'll be for retirement argued the ad.

Now, I for one, do not argue with the premise, nor that Allstate could assist in this. It is also true that Americans are not known for being disciplined savers. It is also true that married women are encouraged to work for many reasons which we won't go into here. It is also true that many marriages do not last as long as they did years ago which also complicates the equation. And the advent of an unusual increase of single parenting also enters into play. The difficulties of single parents to work full-time are legion and part-time workers are often denied benefits.

It is also true that when both spouses work, they may opt to take only one benefit package (health, retirement et al), probably choosing the most beneficial plan without two premiums being involved. Furthermore, there is concern that pension/retirement plans in existence today may not be in effect tomorrow. Moneys set aside often have a way of financing more pressing causes and these IOUs may somehow diminish or even vanish (even the government finds this attractive).

Now, let's go back to the average. Perhaps one way to understand it is to grasp the meaning of the "mean" which simply means that half is below the figure, half above (e.g. $659,139). The average is computed by totaling all the salaries, then dividing by the number of entries. The "mean" is not always equal to the "average". Perhaps both spouses had worked. Their lifestyle could be different from a couple with only one wage earner. Living styles vary considerably although statisticians often encourage retirement living at a lower level than while gainfully employed.

Then there are aging parents depending on their retired children. And boomerang kids do appear on retirees' doorsteps. Illness and disability are not always predictable which can severely complicate matters. Enough said. There is so much more that could be brought to the surface.

In closing, let's forget about the mean or the average right now. Let's suggest three things: 1. Plan ahead; 2. Start or continue saving; 3. Live responsibly. This may not be easy. We could add a 4th: Work longer. But this alone is not always possible. Inadequate planning could create a most distressing senior moment. Don't let it happen to you. Or to those younger.



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Dan Seagren is an active retiree whose writings reflect his life as a Pastor, author of several books, and service as a Chaplain in a Covenant Retirement Community.

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Posted: March 30, 2008

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