Q: What motivated you to write on what you see as a looming retirement crisis?
A: My background is heavy in marketing. I thought that a lot of current marketing efforts were causing Americans to spend more money than they had previously. It became normal to lease a new car every two years, to spend $4 on a cup of coffee several times a day. Past generations used to talk about starter homes. Young people want their dream home on the first shot. I saw young people who expected luxuries in life and were paying for them at the expense of savings. I saw how that lifestyle contrasted with my parents’ lifestyle and how they lived their life.
Q: What kind of influence did your parents have in shaping your financial habits?
A: My father and mother both survived the Great Depression and World War II. We had piggy banks from an early age and were taught significant lessons about accessing that money. I washed dishes; I mowed lawns; I unloaded trucks; I bartended through college. Dad didn’t loan us money. He didn’t buy me a car when I turned 16. He didn’t give me a credit card. He made me promise that I would go to college but then told me that I needed to figure out how to pay for it.
Q: Your father retired early at age 58. Did the economy work more in favor of past generations?
A: Not only did my father retire early, he was able to do so on a single income. The world wasn’t as competitive back then. He was home for dinner every night. It was a lifestyle of the past. Americans won’t see a retirement that was as easily attainable – or as affordable – as that of the past one or two generations.
Q: Why aren’t Americans more motivated to save for retirement? Research you cite shows that 40 percent of workers have saved nothing for retirement and the average amount saved is only $18,745.
A: Americans possess this romantic illogic about the back end of life. They have in mind the defined-benefit pension plans their parents had. They think that check is waiting for them also. Half of families have total assets of less than $23,000. That’s their total financial assets.
Q: What needs to happen to reverse the retirement shortfall?
A: I don’t see anything from our leadership that indicates a willingness to tackle significant issues on a national level. Employer and government help is shrinking. I am trying to grab individuals by the shoulders and shake them and say, “It is up to you. You need to help yourself. Have you started an IRA? Have you maxed out your qualified retirement plans? Are you spending prudently and saving as much as you need to? Have you engaged a financial adviser?” When you tell someone the amount of money they need to have to maintain the lifestyle they want in retirement, it is so overwhelming, they reject the message; they hide from it. But unless they face it, they are in for a wake-up call.
Edited for space and clarity from an interview by staff writer Aldo Svaldi.
