FRONTLINE: The Retirement Gamble

Go forth, watch “The Retirement Gamble” by Frontline on the PBS website, then come back and I’ll talk you down off the ledge.  Here are my reactions.  First off:

  1. Of course people don’t know how much they need to retire.  They don’t hire the people who can tell them that (financial planner,) so they don’t know.  Apparently most people plan their retirement by shrugging.
  2. Pensions, when they worked, were good things.  I notice the video doesn’t talk about pension failures.  Pensions weren’t all puppies and honeysuckle.  Many pensions failed and impoverished their retirees.  Here’s a list: “The 10 Biggest Failed Pension Plans” from USNews.  Also, pensions aren’t portable.  You lose your job, you can lose your pension (if you’re not fully vested.)  It’s incredibly destructive to employees in fast-moving industries, and those laid off.
  3. There are, from my observation, four major areas of diversification in the average household’s wealth: equity in personal residence (real estate market), value of retirement accounts (dependent on stock and fixed income markets), income from work (labor market*), and cash (generally not exposed to market forces.)  During a normal recession, you should expect one or two of these to get whacked in the nose.  During the last recession many people took a hit from real estate, retirement, and their job.  That’s terrible.  But I suspect a lot of the people speaking in the program didn’t have an emergency fund or liquid savings.  Having liquid savings is like recession-proofing your finances.  If the households that were hurt so badly in the big recession had ample cash, the recession would’ve been a great opportunity instead of a nightmare.  But that’s neither here nor there.
  4. Reading a prospectus isn’t that hard.  Honestly.  The people on the program make it out like it’s the end of the world.  Here’s a prospectus.  The fees are listed in the table of contents, and on page one.  It took me, literally, less than ten seconds to find them.  Oh, think I just picked an “easy one?”  Here’s another prospectus.  This one is a lot more complicated than the first.  I found the fees listed on the fifth page.  I found the fees faster than the prospectus was downloaded.  So someone call the wahmbulance.  ProTip:  Your unwillingness to check the price of the thing you buy does not entitle you to cry about the price.
  5. Lord.  If you don’t know what something means, look it up.  If you don’t know what “EXP Ratio” means, type it in the search bar in your web browser and find out!  I just typed “EXP Ratio” (without quotes) into my generally inferior search engine and the definition for “expense ratio” was the first dad-gum link!  Don’t act like it was some harrowing voyage of discovery.

Wow, I sound cranky.  It’s not so much critical of the show as I am critical of the attitude.  It comes across as a little juvenile, like people are saying “I don’t understand what’s going on with my money, my investments, and my retirement; and I think some institution should do it for me.”  It rubs me the wrong way.  Taking care of your money and your retirement is about being a responsible adult.  Kids ask people to just take care of them.  Grown ups act to fix their problems.  They do research, and get help if they need it.  The show just keeps triggering my distaste of childish whiney-ness.

Anyways, maybe I’m just cranky today.  Next thing you know, I’ll be yelling at kids to get off my lawn.

*Technically not “wealth,” but the household needs income from some source to exist, so I’m lumping it in for convenience.

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