Fairy Dust — Real or Imagined?

Posted: Jul 30, 2013 12:01 AM


For those of you who are unfamiliar with the term “mailbox money,” allow yourself to be enlightened.  Do you remember when you lost your first tooth as a young child?  In many households, there is the traditional placement of the tooth under the pillow which is a clear signal for the tooth fairy to go into action.  Accordingly, the tooth fairy then carefully replaces the treasured tooth with a nickel, a dime, or in some instances, a quarter.  The correlation involving money and placing teeth under the pillow was normally never forgotten, especially for a youngster.  In fact, it was an exciting event that could be counted on with great expectation.  And the same can be said regarding mailbox money.  In fact, Social Security fits very nicely into the mailbox money category.  It’s a certain amount of greatly anticipated money that arrives every month either in the form of a check or a payment that’s deposited directly into your bank account.  Moreover, when workers retired in the past — from either the public sector or the private sector — because of the retiring worker’s pre-existing defined benefit plan, they and their spouse could count on even more mailbox money in addition to their Social Security.  Thus, it was a lifetime of hard work summarized in an amount of dollars that would be received consistently, providing the ability for the income payments to be budgeted while also allowing the opportunity for future financial plans to be made.

Then, the financial and economic landscape changed dramatically.  Corporations and Wall Street convinced the aggressively greedy (just about everybody) that mailbox money was for saps, “With a 401K, you too can manage your way to a much better retirement.”  Although it worked out very well for the corporations and the titans of Wall Street, for the average citizen with questionable money management skills — combined with the intended or unintended consequences of ZIRP, stock market flash crashes, dot-com debacles, credit busts, and roller coaster financial markets ultimately going nowhere — it’s resulted in retirement plans becoming mere spectacles of disillusionment.    

However, as each day dawns, hope springs eternal.  The argument that this time it would be different is always forthcoming, yet seems to preclude events of long ago, thus creating a forgotten past.

The comfort and security of mailbox money — or for that matter my grandson’s perception of guaranteed tooth fairy money — is much more reliable than the fairy dust currently emanating from Wall Street.