Several years back I was doing a local television show as a personal finance guy. It was one of those morning shows that come on after the national variety stuff and although Portland isn’t a big player in the overall TV market, it did okay. I did a wide range of topics, always sort of fluffy (kids and finance, how to fix your budget) and never anything too serious (the high cost of divorce on a retirement plan). I even did a show in 2005 about the impending housing crisis but no one was listening. It was good for me and my books.
But one day, I got a call from their news department. They wanted to know, since I was the station’s financial expert, if I would come down and do an interview on pets. The reporter, Susan Richards and I sat and chatted on camera for about an hour about everything from insuring these animals to why folks were willing to go broke paying for vet bills. When it aired, only fifteen seconds or so made it to the news that night and, if you know television, it wasn’t the most flattering moments of the conversation.
The snippet they chose had to do with the subject of when to let go. I suggested that with so many pets in shelters, the right thing to do, instead of forking over thousands of dollars to keep a dying dog alive, was to save another animal. Seemed to be the coolly logical choice for anyone who was thinking about their finances more than once a week. Cool logic finds a place far down the emotinal latter when it comes to pets. My bad – clearly.
So it really came as no real surprise when a recent survey of those about to retire found the importance of their animals (along with their pre-retirement lifestyle, which includes vacations, internet, dining out and entertainment) to be non-negotiable. They had a lifestyle these Boomers suggested and it was not about to change simply because they stopped working. Not only that, they were willing to work many years beyond what was previously an un-breach-able boundary to achieve these creatures comforts, not only for themselves but their pets.
What was once a luxury is no longer considered as such by folks who want retirement in some shape or form. This is understandable when you consider how fast such things as smart phones have infiltrated our daily lives when it seems just years ago, it was considered an extravagance. The transformation to “must-have” is subtle but costly.
But at what cost are these necessities having on the retirement plans many have in place. Aside from working longer, Boomers are starting to realize that the middle years, the ones where they raise the family and save little are over and they need to consider life as it currently is. The next question: how can we keep the same lifestyle when we no longer have incomes to rely on?
Almost half are willing to switch to smaller living arrangements. That is an easy fix for many but half want to stay in place when they retire. This means they need to put more money towards this future. Doesn’t mean they will according to Dr. David Stewart, a financial psychologist who focuses on consumer behavior, and dean of the school of business administration at the University of California at Riverside. The intent is not often followed through with action.
Historically, the middle-aged members of the workforce knew that time was no longer on their side. So they shifted, often dramatically from net-consumers to net-savers in the hope that they could catch-up. This late-in-life gearing down seems to no longer be the norm. They don’t want to stop spending but instead are looking for ways to make up ground.
Back to the pets. Most folks can budget for many of these necessities formerly known as luxuries (internet, cellphones, vacations, weekly entertainment). But animals are another story altogether. A few of these late-to-the-game savers and investors will turn to financial professionals for help. Fewer still will offer to tell them about their pet preferences.
According to Drs. Race Foster and Marty Smith, veterinarians who run a a website devoted to pet education the first mistake many potential owners make is the unwillingness to spend money on a better breed dog. This also applies to cats as well but for the sake of example, we’ll use the more costly of two most common pets to illustrate potential costs. Animals obtained from the shelter may cost less initially, but they warn, may cost more as time goes by. A well-cared for, better bred dog could cost the average owner close to $40,000 over the average 14-year life span. (Cats coincidentally cost about $19,000 over a 13-year period and both vets caution that these are conservative Midwest prices)
They do warn that many people will not spend that amount but will pay $2000 or more for a single visit to the vets. While financial professionals who may see these clients over the next decade worry about numerous other concerns confronting these future retirees, from kids moving back to the possibility that the economy will remain sluggish for more years than anticipated, their attitudes towards luxuries and what they might be – turns out the one true luxury is still time – should also be considered. But can it be budgeted along with the rest of their financial considerations?
The answer is yes. The harder answer is how. Determining attitudes now might give financial professionals the opportunity to understand what might impact their future income stream. If they have animals now (considering their age might lead to the question: do they intend to have them later as well) and how long they have had them might make you ask if these pets have a place in the overall budget. Most don’t, simply lumping the cost of their food in with yours, the cost of animal friendly accommodations or boarding in with the overall travel costs, and some forego their own medical considerations for the pets they own.
As I said earlier, you tread on dangerous ground suggesting that animals may cost too much in retirement for the average Boomer to afford. But the subject needs to be confronted and rationally discussed by those entrusted or enlisted to help with our financial futures. Just be cautious.
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