Realistic Planning: There’s More to Life Than Retirement

One might quibble with that choice, and fewer young couples would likely make a similar choice today given the current real estate market, but it was a reasonable choice under the circumstances. The house offered us a place to raise our children in a good environment near family and other support systems. It was the right decision for us.

Obviously, young families are expensive, and ours was no exception. Retirement planning continued to mean little more than the company match until later, after college planning was more firmly grounded. Providing for our children — including college — was simply a more urgent concern for us. Many retirement planning advisors insist that college assistance should only come after maxing out the 401(k) each and every year, but we were not willing to go that route to the expense of our children's prospective education. Our priorities were (and are) different. Again, one may disagree with that choice, but it was an entirely plausible one, especially since I do not ask anyone to feel sorry for me or to prop me up financially on account of it.

I do not fall into this camp, but many workers are also incredibly discouraged about the prospect of saving and investing generally, including for retirement. According to the EBRI Survey, just 16% of workers are very confident that their investments will grow in value going forward. The secular bear market for stocks we have seen since the turn of the century and, much more recently, exceedingly low yields on bonds have resulted in some very disillusioned investors. That is a perfectly understandable reaction, especially given the findings of behavioral finance and the biases that so frequently beset us.

Many alleged experts in retirement planning — and I include myself in this group — are far too willing to offer advice without seeming to recognize the competing interests faced by those hoping to plan well. Much of what is called advice is really hectoring about the need to save more and to save more sooner and does not seem to recognize that alternative choices are not necessarily or entirely wrong.

A more realistic approach to retirement planning will not be all that different substantively — in general, people should save more and start saving sooner. But a better approach will meet the people who need good advice "where they live" without judgment or condescension, while remaining forthright about the challenges that await.

Not everyone with a less than perfect retirement plan gets into that situation on account of foolish decisions. My wife and I made some difficult choices. We remain convinced that, for us and for our family, they were the right choices. We are now ready to give retirement planning a much higher priority. It would have been better for our retirement plan had we done more and done it sooner, but thankfully we are in a position where we can still be cautiously optimistic about our retirement prospects.

Not everyone can give retirement planning the kind of focus and attention that they might otherwise like to. Per EBRI, 42% of workers identify job uncertainty as their most pressing financial concern, 20% report that their debt levels are a major problem and an additional 42% describe debt as a minor problem. Others have faced real economic, familial or health-related hardship. Some of us had what to us were more pressing priorities. We knew the risks we were taking and accepted them.

More realistic retirement planning will seek to offer the best and most creative approaches to the vexing problems we face without presuming that we have been irresponsible because our planning is not yet as advanced as it might be.

Bob Seawright is chief investment and information officer for Madison Avenue Securities in San Diego.