INTERVIEWER: How often have you heard it… 60 is the new 40! Take a look around, people are living lives they never dreamed of. But did you know that six in 10 Americans don’t know how much money they will need to retire? Hi, I’m Nicole Westin, host of Roadmap for the Future, brought to you by Western & Southern Life. So why is retirement such a hot topic? We asked the President & Chief Marketing Officer – W&S Agency Group- Troy Brodie – to offer his insights. So Troy, how did we end up this way?
TROY: Well, this did not happen overnight, it definitely took time… something on the order of a generation, or more. And there really is more than one answer to your question. INTERVIEWER: Okay, let’s get started! TROY: Let’s start with employment, and benefits. Generations ago, people worked hard and when they retired, they had access to a pension. Today, for the most part… pensions have gone away, either completely, or have been replaced by defined contribution plans like 401(k)s or 403(b)s. I have to add a shameless plug here… Western & Southern still offers its associates both a pension, and a defined contribution program in the form of a 401(k). But we are the exception to the rule. Of companies in the Fortune 500, Western & Southern is one of only 16 offering a defined benefit pension plan. So from an employment standpoint, many Americans just aren’t getting the same retirement benefits they got a generation or two ago. INTERVIEWER: So we have benefits concerns… Let’s talk about personal savings. I guess the inverse would be spending… Right? TROY: Yes, and what you’re alluding to is lifestyle creep. We all see unrealistic images in the media… People living in mansions, driving sports cars and wearing designer clothes. So to a degree, we try to emulate these people, and all too often people do so at the expense of their retirement savings. The result can be debt accumulation. And what you don’t realize is that all too often, those images we see online, and on TV portray a lifestyle that is not always real. It is only natural for younger people not to think about retirement. They often make purchases that provide instant, but only temporary happiness. And worse, they could miss out on years of compounding that could contribute toward a comfortable retirement. In fact, almost two-thirds of Americans have saved little or nothing toward their retirement! INTERVIEWER: That’s concerning… so what else? TROY: Well, looking at my generation… Whether Social Security, Medicare, or other governmental programs, people used to be able to rely on the government to take care of them in retirement. A lot of that is just not there anymore, or is diminished in capacity. Or perhaps threatened. There is a three-legged stool analogy that used to hold true: Of those legs holding up one’s retirement, the government leg used to bear most of the weight, with employer programs and personal savings being the two lesser legs. Today, we are moving toward personal savings being required to sustain the weight. INTERVIEWER: So our retirement stool is changing. I imagine the economy plays a role too… TROY: Yes, absolutely. No discussion on retirement would be complete without addressing our economic landscape. For a lot of people, the economic recession of 2008 could have wiped out what little retirement savings they had. And these people have had a tough time recovering. INTERVIEWER: Is there a way out? TROY: In my opinion there is… with a bit of the right guidance the situation that lots of people find themselves in can at the very least be positively affected, and in many cases turned around. I think too many people think the situation is hopeless, that definitely is not the case. But you need to start saving as early as you possibly can. If you’re earning a living, you aren’t too young to think about retirement. And if you haven’t started saving, the time to start is now. INTERVIEWER: So the good news is… you probably can get back on track. TROY: Well sure you can. Once you’ve made the decision to take action, you need to partner with someone… a financial professional who will really take the time to listen, and hear what you’re saying. With a well-constructed retirement plan in place, along with regular reviews, you have a good chance to get on track… and to stay there. Talk to people who you know… people you respect. And know that Western & Southern has offices nationwide. Our financial professionals welcome the opportunity to sit down, hear what’s on your mind, and help you create a personalized roadmap to retirement. INTERVIEWER: Roadmap to retirement… Troy, this sounds like good news to me… thank you for your time. TROY: Thank you!
