Objective information about retirement, financial planning and investments

Winning The Retirement Gamble: Step 1 Adjust Your Mindset

Tri-Athletes Mental Tool Box -- F.A.S.T.

The PBS Frontline documentary The Retirement Gamble has sparked a lot of discussion, both pro and con.  One thing that is clear, the show contributed to the discussion about the lack of retirement readiness among many in the United States.  I’m hardly an expert in behavioral finance, but I do know that in order for investors to be able to focus on planning for their retirement they need to adopt  the right mindset.

Lose the victim mentality

I saw a lot of this on the PBS special and see this written about frequently in the press.  The last few years especially have been rough on many of us saving for retirement.  Job losses; the financial crises; the Flash Crash; the realization that not all financial advisors have their client’s best interests at heart; the mutual fund scandals of the middle part of the last decade might all be good excuses to feel like a victim.

As my wife used to say to our kids on the soccer field (when they had a minor injury) “…suck it up and get back in the game…”  If you feel like a victim you likely will end up as one.  Right or wrong saving for retirement is on you, deal with it.

Drink your own flavor of Kool Aid 

I love index funds and ETFs and use them extensively throughout my practice.  They comprise the majority of the assets for which I provide advice.  I don’t, however, use passive index products exclusively.  There are solid actively managed funds that in my opinion warrant inclusion in some client portfolios.

There are some folks out there who have an almost cult-like devotion to indexing and John Bogle.  Mr. Bogle deserves all of the respect and admiration that he gets and then some.  My point is that no single way of doing things is always right in all cases.  It’s OK to mix and match funds, ETFs, active, and passive strategies, as well as other vehicles as long as they fit your financial plan and your needs.  Don’t let anyone put you down because you disagree with their way of doing things.

Focus on the future, don’t dwell on the past 

The past is in the books.  Maybe you didn’t save enough perhaps you invested in all of the wrong places.  Perhaps you had a greedy “financial guy” whose focus was on selling you products that enriched their bottom line at your expense.  Don’t forget your past mistakes, learn from them, but don’t dwell on them.

All you can do in the financial planning and investing world is move forward from wherever you are now.

  • Find a fee-only financial advisor who puts your interests first.
  • Get a financial plan in place with appropriate goals and strategies.
  • Review your investing strategy.
  • Beef up your retirement savings.
  • Manage your career.
  • Take charge

Our retirement savings system puts the responsibility for accumulating enough for retirement on us.  Get in the game make sure you have the right mindset and attitude to be successful.

Please feel free to contact me with your financial planning and investing questions.  Check out our Financial Planning and Investment Advice for Individuals page to learn more about our services.  

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My Thoughts on PBS Frontline The Retirement Gamble


The PBS show Frontline recently aired The Retirement Gamble, an investigative documentary on the state of retirement savings and the problems with 401(k) and similar retirement plans.  The show did a great job of highlighting a number of issues and was pretty scathing in its treatment of the financial services industry and workplace retirement savings plans.

The Retirement Gamble

As a professional who serves as a financial advisor to a number of 401(k) plan sponsors as well as to individual clients (most of whom are either close to retirement or in retirement) I watched this broadcast with great interest.  Here are my reactions to what I saw.

Key issues highlighted by The Retirement Gamble

  • The high fees imbedded in some retirement plans, often these fees are next to impossible for the average participant to uncover.
  • Poor investment choices offered in some plans.
  • There are a lot of lousy 401(k) plans out there.
  • The confusion and frustration that many retirement savers in 401(k) and other defined contribution plans feel due to the fact that they are responsible for accumulating enough for retirement.  This is in contrast to the era when many folks were covered by a defined benefit pension plan where the investment risks and responsibilities for funding the plan were on the employer’s shoulders.
  • While the issues highlighted were not new to me nor to many of us in the industry, I think this documentary was a bit of an eye-opener to many in the general public.  I say this as there have been several surveys taken over the years where a shocking number of investors responded that they had no idea that there were fees charged by their 401(k) plan.

Where the documentary fell a bit short in my opinion 

As regular readers of this blog and those who follow me on Twitter and other social media outlets know, I am highly in favor of lower retirement plan fees and anything that increases transparency for investors.  That said I thought The Retirement Gamble had a very decided bias against the financial services industry and almost felt as though they had come to their conclusions before they started on the project.

  • The show did not highlight a single good 401(k) plan and there are many out there.
  • The show did not highlight a single person who had used the 401(k) to accumulate a significant nest egg. I have the privilege to serve as advisor to a number of folks who have done just that.
  • While I am an admirer of Vanguard founder John Bogle and use index funds extensively in the 401(k) plans that I advise and in the portfolios of all clients, I disagree that there are no actively managed funds worthy of investor’s dollars.  That’s not to say that these are the majority of active funds, but they do exist.  Finding them and determining if they are an appropriate investment choice for a plan sponsor to offer is what plan investment consultants are paid to do.
  • While the program did mention advisors who act as Fiduciaries in passing, the focus was on those advisors, reps, and brokers who sell plans and/or suggest investment options that serve to line their pockets sometimes at the expense of the plan’s participants.  Why not interview some advisors who do the right thing for their plan sponsor clients and the participants of those plans?
  • The worst part of The Retirement Gamble was that while many problems and issues were brought to light, there was little in the way of advice or suggestions for plan participants on what to do to improve their situation.

I do have to say that the most amazing part of the show was the interview with the head of Prudential Retirement Christine Marcks.  She insisted that she was unaware of any of the research showing the advantages of low cost index investing over high cost active management.  While she may or may agree with the findings, the fact that she insisted that she was unaware of this research was jaw-dropping in my opinion.  I think Ms. Marcks should have been coached prior to her appearance by someone at Prudential.

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