A 21st Century Career-Path to a More Prosperous Life

posted Aug 2, 2013, 9:05 AM by Willie T. Butler   [ updated Aug 2, 2013, 9:06 AM ]
(Originally Published | March 5, 2012)

If I were asked to recommend the best career-path or strategy for building a secure financial future, my response would be to develop as many income streams as possible within the least number of years.

May sound like a strange answer to such an important life planning question, but it isn’t … not really. Not when you objectively assess how the last 30-40 years of employment, career development, specialty education and personal savings and investment performance have affected the majority of middle-aged to older Americans.

The facts speak for themselves, and here are a few:

  • During the past 30-40 years, Americans who retired from military or public service through some federal, state or city government have secured guaranteed annual income for life. This provided—for many—their first guaranteed income stream after as few as twenty years of service, which afforded them an opportunity to pursue other, often higher-paying employment in the private-sector.

  • According to a 25-year study by the U.S. Bureau of Labor reported in 2006, Baby Boomers had averaged 10.5 jobs throughout their careers. Others groups of private-sector Americans working for corporations and non-profits had changed companies or careers at least 3-5 times during the same period. The trend—it seems--is flowing towards a lifetime average of 7-9 jobs in an average working career.

  • In 2011, the average 401(k) retirement account held less than $50,000 by workers within ten years of their retirement. Worst, today half of all working Americans have less than $5,000 in their retirement nest-eggs; and I in every 4 will likely retire without adequate income. This is after twenty years or more of regular contributions to a retirement plan. In contrast, public-sector retiree’s benefited most from defined benefit pensions rather than defined contribution plans, which means their employer bore the greater burden to provide some type of retirement benefits.

  • Public-sector retirement benefits have kept many retirees from falling below the US poverty level of $22,450 (in 2011) based on their guarantee of income for life. To avoid falling below the poverty line, a retiree would have to receive at least $1,875 per month in benefits. Of course, after only twenty years, some military and public-sector retirees receive only half this amount, and without other income streams do fall below the poverty level. One alternative is serving close to 40 years and receiving full benefits.

  • Over the past thirty years, the number of public-sector jobs created surpassed private-sector jobs by over 20%; and public-sector wages have kept pace with or exceeded annual inflation rates while private-sector jobs, wages and cost-of-living adjustments declined. The latest data from the Bureau of Labor Statistics (2009) also shows that government workers make about 5 percent more than private sector workers on average.

  • High-tech, engineering, finance and computer-related start-ups provided the fastest track for getting rich at a very young age, enabling additional upstarts, successful career shifts and additional income streams. However, the spiraling cost for higher education and need for specialized training hampered many low-to-middle income Americans from pursuing these high-paying professions.
Accordingly, a young person leaving high school forty-years ago and choosing the public-sector employment route would have fared better overall choosing to: 1) pursue a government career—at any level—for the first twenty years of their life, followed by 2) a second career in defense, finance, healthcare or a high-tech field such as engineering, computer-science or network administration.

Using all the benefits of this strategy, this young person could have chosen the US Armed Forces—as a public-sector career path—and have the government pay for their education; any specialized training and contribute towards their future retirement benefits. All but the retirement benefits would be available immediately and the latter in twenty short years. Ongoing education, medical and other lifetime benefits offered to retirees coupled with free training for transitioning to civilian careers would have kept their personal financial commitment minimal. However, a private-sector person would have likely incurred many expenses, including student loans and unreimbursed job-related expenses which they would have had to pay for out of their normal living expenses...

In contrast, the military retiree would have secured a guaranteed lifetime income that would have adjusted annually with inflation--as it has for all but one of the last 40 years. When you factor in that for the past 40-years private-sector wages have lagged in relation to annual cost-of-living adjustments, this is a big thing. During this same period, the average American loss buying power almost every year while public-sector retirees were subsidized. Even with the loss of their second job or career, they would still have income to depend on.

Perhaps most confirming about my public-sector recommendation is the unquestionable fact on what guaranteed lifetime income means in lieu of the other data. If our young person followed this suggestion and retired at age 40 from the military (or other public-sector career), depending on rank and other separation benefits, the average beneficiary may receive from $900 - $1,450 per month in income which, over the course of the next 35-40 years of life expectancy would be equivalent to $432,000 - $740,000 of guaranteed income.

Officers and high-ranking administrators would, of course receive significantly more in retirement and over a cumulative period. Monthly income ranging from $2,500 - $8,500 is not uncommon among higher-ranking retirees. This would mean that the US government is committed to paying such retirees $1,000,000 - $4,000,000 even after their fully covered period of service. This has been Uncle Sam’s way of subsidizing and securing a comfortable lifestyle for those considered to have served this nation well.

While choosing a career should not be solely based on its’ income potential, let’s face it, what you earn during your working years determines your quality of life while earning it and when retired. At least 20% of Americans will pursue public-sector careers in the 21st Century and maximize their chances for multiple income streams. Given the vast array of career fields and opportunities the public-sector will offer, the private sector should give serious thought to implementing similar, competitive terms and benefits. 
Comments