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The financial planning industry has been saying this for decades… we are unprepared. On so many levels, people everywhere, particularly in America, are not thinking enough, saving enough, or understanding enough, about retirement.
Why is this subject so important? Because of the American dream. Investopedia defines the American Dream as "the belief that anyone, regardless of where they were born or what class they were born into, can attain their own version of success in a society where upward mobility is possible for everyone. The American Dream is achieved through sacrifice, risk-taking, and hard work, rather than by chance. "
The Second Half of the American Dream
And then what? After the sacrifice, risk-taking and hard work, do you just die at your desk? No, the second half of the American dream is using the money that you've earned to have a great life without having to work so hard. America is a bit too young to understand this part. Perhaps, until now.
The industry has simplistically used a "precision calculator" to figure out a "number" that one must achieve to have the second half of the dream. However, the number is meaningless. Markets change, circumstances change, global pandemics happen, and these things disrupt the value of everything, and the relationship between everything. So why have so many companies followed suit? Because calculators are easy to develop, and those in power positions believe that by rationally making a mathematical case for change, a product will be sold. That would generally be true if finance were a rational subject. But it's not. It's emotional. And these calculators can backfire not only by lulling one into thinking the number is the answer, but worse, by triggering one of the most powerful — and dangerous — human emotions. Shame.
The Impact of Shame
Here is a scientific description of shame:
"We feel shame when we violate the social-norms we believe in. At such moments we feel humiliated, exposed and small and are unable to look another person straight in the eye. We want to sink into the ground and disappear.
Shame makes us direct our focus inward and view our entire self in a negative light. "
-The Scientific Underpinnings and Impacts of Shame, Scientific American, August 9, 2019
In light of this, consider three things:
- The notion of a number is a social norm. And most people are violating it. Might that make us view ourselves in a negative light?
- If we view ourselves negatively, do we actively seek change, or do we try to avoid having the negative feeling?
- If we avoid the feeling, how can we possibly confront the issues around retirement readiness, or seek help, by putting ourselves into a situation where we will be forced to look someone in the eye and talk about or violation of a social norm?
These are very prickly, complicated and highly charged questions., but they go a long way toward explaining why we need a new approach to engagement at or near retirement.
The Antidote to Shame Is Empathy… and the Industry Lacks Empathy
Brene Brown, world recognized researcher, author and speaker has noted that shame is the most primitive human emotion, leading to a feeling of being unworthy of love and affection. She also notes that the way people are pulled out of the abyss of shame is through true empathy, which is the ability to truly understand and share the feelings of another. In her book "Dare To Lead", Brene makes many helpful distinctions between empathy and sympathy, which are not the same and often confused, and also gives examples of empathy done well, and not. The bottom line is that empathy helps others realize that while they are experiencing shame, and a lack of worthiness, there is hope. She shapes empathy as a critical skill for leadership in the future, in essence, learning to be more human is essential for successful business and life.
Maria Ferrante-Schepis, CLU, is president, insurance and financial services, for 
