Our retirement planning has implications I would never have considered before I talked to an economist yesterday.
Six of the most affluent counties surrounding Detroit -- and not including the county poor beat up Detroit is in -- have lost about 350,000 jobs in the last 10 years. Economist Donald Grimes, senior researcher for the University of Michigan Institute for Research on Labor, Employment and the Economy, thinks that by 2013, 75,000 of those jobs will return. But the rest of them are probably gone forever.
Nevertheless, he's predicting a labor shortage within four or five years because so many of us baby boomers are going to quit working. In other words, all those jobs can disappear, but there are so many of us that our retirement could put thousands -- just in a small geographic area -- back to work. Amazing.
Heaven knows I'm no economist, and I have no crystal ball, but I don't think you have to be one or have one to figure out some of the things that are likely to come about as we boomers get old and the economy improves.
- Grimes points out that the health services industry mostly escaped the Great Recession and predicts that it will continue to expand, hire more people and costs will go upward. If you haven't bought long-term care insurance, now's a good time.
- Housing is still bumping along the bottom, but if more people find work, costs of new construction and remodeling will rise and so will the price of new homes. If your retirement plan includes staying put, now's a good time to have the work done on your house that will make it liveable for a long time -- before the cost of labor rises. If you're moving, consider whether now could be the time to buy.
- The U.S. Department of Agriculture predicted Tuesday that it believes retail food prices will rise 3.5 percent to 4.5 percent in the coming months. Can other inflation be far behind? If you're not aggressively saving and managing your money in preparation for retirement, you're making an enormous mistake.