Reset Retirement Podcast

Ep 3: Do We Get Shamed by the Retirement System?

July 25, 2019

In the United States, 8.5 million older people will fall from being middle-class into poverty when they retire if we don’t do anything. With so many at risk, why do people feel alone?

Reset Retirement, a new podcast from our Retirement Equity Lab, tells the real stories of retirement. This is not the same, old retirement advice that is hard to follow in today's job market and makes us feel worse about our own saving. Rather, we hear from real people - millennials, mid-career professionals, and retirees - about how life has affected their retirement savings, how they cope, and what we can do to demand a system that works for real people. Listen above or wherever you find your podcasts. 


We all live in the same retirement system that works for spreadsheets, not real people—and when we believe it’s our fault, we are shamed by a failing system.

On episode three, we explore what this conflict looks like in real life. First, we meet Archer, an English professor who reflects on his early saving experiences and expresses feelings of regret. Then, we talk to Barbara, a single mother working at a non-profit, to discuss how job loss and divorce led her to deal with feelings of shame and eventually to financial empowerment.

After their stories, we hear from our expert round table, including host Teresa Ghilarducci and our guests, economist Tony Webb and author Helaine Olen, for a discussion on the role of shame in our retirement system. Finally, we highlight workers who have taken action to recover savings lost to high and often hidden fees in typical 401k plans.

Expert Roundtable Guests

Teresa Ghilarducci, Host, SCEPA Director, and Economics Professor

Teresa Ghilarducci is the Director of the Schwartz Center for Economic Policy Analysis (SCEPA) at The New School. She joined The New School after 25 years as a professor of economics at the University of Notre Dame and 10 years as director of the Higgins Labor Research Center at the university. Her latest book, co-authored with the Blackstone Group’s Tony James, argues our financialized pension system destabilizes the macro economy and fails to provide equitable, adequate and efficiently delivered retirement income. It outlines a bold policy vision to create Guaranteed Retirement Accounts (GRAs) for all American workers. Her research areas concern automatic stabilizers, financialization, and labor market dynamics. Ghilarducci holds a Ph.D from the University of California Berkeley.


Helaine Olen, Author

Helaine Olen is a regular contributor to the Washington Post’s PostPartisan blog and the author of “Pound Foolish: Exposing the Dark Side of the Personal Finance Industry” and co-author of “The Index Card: Why Personal Finance Doesn’t Have to Be Complicated.” Her journalism and commentary have also been published in the New York Times, the Atlantic, Slate, the Nation, and the Los Angeles Times, and she’s appeared on both The Daily Show and Frontline to discuss her work on public policy issues, including retirement. She serves on the advisory board of the Economic Hardship Reporting Project.


Anthony Webb, SCEPA Economist

Tony Webb is the Research Director at SCEPA's Retirement Equity Lab. He is a widely recognized expert in retirement planning and policy. Prior to joining SCEPA, Dr. Webb was a senior research economist at Boston College’s Center for Retirement Research, and a senior research analyst at the International Longevity Center. He completed his PhD in economics from the University of California, San Diego. His research interests include the impact of pension type on the retirement age, the financing of long-term care, and the management of the process of asset decumulation.


Full Episode Transcript


Teresa: The messages we get about retirement these days are “be afraid” and “it’s all your fault.” We’re told that if, like most people, we don’t have enough saved for retirement, it’s because of what we did, not the system’s fault.

But is that the truth? The Reset Retirement Podcast asks, what does retirement really look like for Americans?  

By hearing from people who have both struggled and succeeded in saving, we can learn where the real problems lie within our system. We can stamp out retirement-saving shame, and we can discuss real solutions.  

I’m your host, Teresa Ghilarducci, a labor economist and professor at the New School for Social Research.  In our third episode, we investigate how our current retirement system brings on feelings of shame and embarrassment. We ask our guests and our expert round table, “Are we shamed by our retirement system?” 



Teresa: In the United States, 8.5 million older people will fall from being middle-class into poverty when they retire if we don’t do anything. With so many at risk, why do people feel alone? We all live in the same retirement system that works for spreadsheets, not real people. Today, we talk with Barbara and Archer and see what this conflict looks like in real life. So welcome, Archer, to today's broadcast of reset retirement. Can you tell me about yourself, just a little bit for our listeners?

Archer: Sure. First name Archer, age 64. Aging professor at a local college. 

Teresa: If you did lose your job today, do you feel like you're ready for retirement? You're 64. That seems...

Archer: Heck no! Let’s suppose, I got a phone call: “fired today.” My bank account, my retirement savings, a little bit of stock, and something else that now I've forgotten, it would absolutely give me two years of current income, without a doubt. And then if I factor in Social Security and again, being conservative, I'm sure that would get me through four years. 

Teresa: How much money do you have in your retirement account? How much do you have?

Archer: In my retirement account? It's in excess of one hundred thousand. I find this difficult to believe, according to what I read, I'm in better shape than most Americans. And I am shocked, I'm shocked. I mean I am certainly not a role model. I would be better as a cautionary tale.

Teresa: You started working regularly in the job that you have now as a professor of english and composition when you were 40. Did you start saving for retirement then and did your employer help you?

Archer: No. For the first seven years of my employment, I was an adjunct at my present college plus some other institutions. So I receive full time employment in 2002. Now, more financial foolishness: my pay was so low, I said “I can't afford to save.” That's - ok if if I want to tell someone listen to grandpa - hat is a dumb decision: “I can't afford to save.” You can't afford not to. Unless you intend to be a suicide. 

And it took a fellow teacher. I will never ever forget him for actually walking me to the office of TIAA-CREF and getting me enrolled because my college does match - I mean I don't mean one for one - they match five percent. He has a gift for making simple statements, that the truth is very apparent, and he said I was leaving money on the table and he's correct.

Teresa: Archer, I hear you blaming yourself for not saving earlier. Do you think that's common?

Archer: Well, I would guess when you get older, start approaching my age, it’s the norm. I let the callowness of my youth last too long. I am somewhat the grasshopper and the ant. I was having an unthinking, carefree life while I was really young. I should have been better at an earlier age for thinking about my future. 

Teresa: What are your other worries in the next 10-15 years?

Archer: Well, I'll tell you, I've been tremendously lucky. I had like no health problems. Now on the other hand, that of course could change when I'm walking out the door. So, some big change in my health status, getting fired. My dad died at 66. My uncle died at 103. I expect to go somewhere in between. And I would actually be better off if it happens closer to my dad than to my uncle.

Teresa:  Why? Because of your...?

Archer: Finances.


Teresa: Barbara, thanks so much for being on our podcast Reset Retirement. Can you introduce yourself?

Barbara: Sure. My name's Barbara. I'm 52 years old. I work in fundraising for a nonprofit and I live right outside Manhattan. 

Teresa: Can you tell me a little bit about yourself, where you are in your life right now?

Barbara: Sure. I was working for a long time I started putting money away into a retirement. My first job out of college because my father sort of instilled in me: even if it was five dollars a paycheck, you have to save money, compounding and all that. And so I kept doing that as I moved up in my career. 

And then I went through my divorce a couple years later, lost a job so I was unemployed for a while. Then I got another job which seemed to have a good salary but I didn't have any benefits. So I was living in Manhattan, you know as a single mom, and it's an expensive place to live and so I was not putting money away. I was spending down my emergency fund that I had saved up and it was just a bit of a mess. So I was just scraping by. Then I started the job I'm in now but there was a seven month gap where I was unemployed. 

I wish I knew 30 years ago what I know now about retirement savings. And I think, for me, now I really feel like financially I am in a place where I have control of my money and not the other way around. I mean when I got divorced I was really concerned about how am I going to live in this city with a child on my lower income? And I'm building back up that safety cushion. I will probably work at least until I'm 70. But I like the work that I do and I hope to continue liking whatever future jobs I come across. So it really is a powerful and empowering feeling to have that sense of control. But it has been a long time coming.

Teresa: So this “do it yourself American system” is sort of ripe to blame people for not doing all those steps correctly. 

Barbara: I think there is that sense of shame and you know now I feel very powerful and empowered about my money but I also in the back of my head do have this sense like, well why didn't I save more money than I saved? Why didn't I consistently do 5 percent? Why did I just put a little bit in and why couldn't I make more money in previous jobs? But I also have personally come to a place in my life where you can't think about what you should have done. Today's the new day, start from here, and figure out what you have to do.

But I I have friends who are truly embarrassed about how they have spent their money or how they continue to spend their money. And I think we don't offer ways that are easy to find. You have to want to go out and try to find the information.

Teresa: Are people judgey about the way you save for retirement, you know, you and your friends, or the way that you might be spending and not saving for retirement? Do you feel a lot of judgment around that issue? 

Barbara: Well I think it's very easy or was easy for me to say, “oh I'm saving money, I'm putting money in my retirement I'm buying only what I can afford to buy”. And then you go through divorce, you go through job loss you go through spending half to three quarters of your savings. And I don't judge anybody for what they do. I feel that all I can do now is to not be judgmental of them or myself and just offer up, you know, what works for me. 

Teresa: You seem to be on the other side of the shame equation.

Barbara: I've done a lot of work to get past it. 



Teresa: Thanks to Barbara and Archer for sharing their experiences. Their stories, despite their differences, share a theme: how the retirement system teaches us to blame individuals. My question for today's experts in our roundtable is, what role does shame play in our retirement system? What do Barbara and Archer's experiences tell us about our system as a whole? Welcome Helaine and Tony, can I ask you both to introduce yourselves?

Tony: Hi, It’s Tony Webb. I work at the ReLab at the New School. I'm a pension economist and I've spent 20 years studying the U.S. pension system.

Helaine: Hi, I'm Helaine Olen and I write for The Washington Post opinion section and I've also written a number of books on retirement and personal finance including Pound Foolish: Exposing the Dark Side of the Personal Finance Industry. And I co-wrote The Index Card: Why Personal Finance Doesn't Have to be Complicated. 

Teresa: So Barbara and Archer talked about their experiences in really different ways. But both had this element of shame and a lot of regret. So it looks like the system kind of blames the victim. Helaine, I know you've thought about this. Tell me more, if that's common...

Helaine: It's very common. The issue is it's our retirement system essentially puts a lot of the onus on the individual. We have Social Security. Pensions are, unless you're in the public sector, increasingly a thing of the past. And then we have personal private savings. That part has become a bigger and bigger part of the system every year. 

The unfortunate problem with this is that it doesn't take into account either human nature or greater economic circumstances. The combination of the two leaves most people very, very far behind on retirement savings. People lose jobs, they get divorced, family members get ill...I could go down the list. And then the kicker is, what seems to be an increasing problem in the system, is the prevalence of age discrimination. So a lot of people have counted on the fact. Well I didn't do so well in my 20s. I'll make it up in my 50s, without realizing that their chances of getting involuntarily severed from their jobs actually start increasing with every passing year. 

Teresa: Yeah. So this idea of working longer as being your last option is just not even an option.

Helaine: Right. And I should add, to bring this back to shame for a second, one of the reasons it's so hard to even get a full grasp on this problem is a lot of people will say they voluntarily left their job when in fact they were pushed out.

Teresa: I want to go back to this more complex political and personal dynamic. Can you just talk more about if we all have shame and blame ourselves, what's the hope for political mobilization?

Helaine: That's a really good question. I think we're all still trying to figure that one out. 

Tony: So I think that people look to solutions that emphasize the individual. So there's a lot of talk about household financial education and if only we taught households how to price options, then everything would be better. Now I think a better approach is to accept the people we've got, with all their flaws, and attempt to change the system to accommodate the flawed human beings that we find.

Teresa: So if everyone thinks that they're flawed, then they live in shame to say oh the problem is me. But if they realize that the system is flawed, because it's not built for the human beings that we are, then they want something more from government or from employers.

Tony: Yes I mean I've had conversations with people and I've offered them the sort of the benefit of my knowledge such as it is, and more often than not, they say well why doesn't the government get me to do this anyway?

Teresa: Exactly right. And I've told people the ridiculous fact that under our system you need about a million dollars when you're 65 if you want to live like a middle class retiree and some hang their head and say “oh help me do that” or “I didn't do it.” And others look at me right in the front and said, “really that's just so unrealistic. My wages haven’t increased, I had to put my kids through college…” and that is the glimmer of hope to realize that is - what you've told me the past 40 years that I'm supposed to have done when I was 25 - it's just unrealistic. And that does seem to be the beginning of, I don't know expanding Social Security, mandating pensions like we did in the 1930s.  

Helaine: Right! I mean, I can't emphasize enough is that when you look at polling data and this question has been polled repeatedly people say they support Social Security. They do not want to see cuts and they would support definitely increased taxes on the wealthy to fund the system and make it healthier. 

Teresa: So Tony, most people don't have enough to supplement their Social Security. Is it because people don't understand finances in their fourth grade and beyond? Is financial education the future for the next generation?

Tony: I’m all in favor of more financial education. I'm also in favor of people eating broccoli. The problem is, it will only have a marginal effect. There are many people who don't have the interest or the aptitude to absorb the information and household financial education can often lead to worse outcomes in that it leads to people having false confidence.

Teresa: What do you think of that, Helaine?

Helaine: Well what I think about financial education is, I think it's lovely. I also think it's something of a scam. Here's what we know about financial literacy. Even with the best of intentions, people pretty much forgot everything they've learned really quickly. And this is really kind of promoting this idea that Americans can be educated to realize when they're being handed a shady mortgage or a hundred page small space, four-inch type credit card solicitation. This is absolutely bogus. The CFPB at one point figured out that the financial industry was spending something like 25 times more on marketing than they were on financial education. Which tells you everything you need to know about what's really going on here.

Teresa: And what you're saying is that financial education is marketing. 

Helaine: It's basically marketing. It's another form of marketing.

Tony: So I think if you have a complicated system, it inhibits price competition. So it clearly benefits the financial services industry, who don't suffer from their products being compared on price with other companies products, and it enables them to increase profits at the expense of the consumer.

Helaine: This feeds all in itself because it also allows industry to pitch another myth, right, that there's some magical person out there who can help you surmount all of these problems. You're not earning enough money? That's OK. We'll help you save enough. You want to beat the stock market? We'll help you. Which is untrue, by the way. Almost no one can beat the stock market.

But this myth is really pervasive and it's really stunning to me how many people believe it and will over and over again, you know, ask for help in you know, finding the right advisor, so that they don't lose money. This doesn't work, and this is all the marketing of the financial industry.

Teresa: So what I'm getting from both of you is we don't need financial education, we need financial protection - protection against predators. And protection against financial risks that people really can't insure against is what people need. I'd like to turn to one more thing and that is to Barbara and Archer. So Helaine, Barbara and Archer are worried but they're better off than most people.

Helaine: Right. One of the things that's going on right now is some of the problems in the retirement system are still coming into focus because it's really only now that the first generation of people who experienced the 401(k), which doesn't debut in the workplace till the early to mid 1980s, depending on where you worked, are coming towards retirement. So prior to that, while a majority of people never had pensions, more people had pensions. At the same time, for older people, the Social Security replacement rate was indeed higher. So you've got a group of retirees now that's - I don't want to say as an ideal shape - but is in better shape than the coming cohort. 

So what we're dealing with was is kind of this oncoming rush of people who are not going to have anywhere near enough money. Barbara is in amazing shape compared to most and even she probably doesn't have enough money. Archer, incredibly, probably has about the average amount of money. If you look - maybe a little bit less - but if you look at you know the figures from Vanguard or from Fidelity, they pretty much say the typical 401(k) account of somebody in their mid to late 50s is a little over, somewhere between one hundred and one hundred and twenty thousand dollars.

Teresa:  But remember that average inflates the real situation of people because that's just counting people with something. 

Helaine: Right.

Teresa: There's so many people without anything.

Helaine: Right. I was about to say, so first, he even has the money. And second, even by the standards of who has the money, he's still in OK shape. And OK shape being, you know, a very loose term here because of course this means he probably is still way behind. 

Teresa: How do we help people who feel ashamed and regret?

Tony:  I think at an individual level we have to empower them. At a collective level, we have to redesign the system so that it works not only for those people who find this stuff fascinating but those who arrive not interested or don't have the aptitude to navigate the 401(k) system

Teresa: And what about you Helaine, how do we help people who feel regret and they’re ashamed?

Helaine: I will leave the practical part of the question to you and point out the argument I've been making increasingly is that this is not a personal problem. This is a political problem. This is a political problem and it has to be understood as such. 300+ million Americans trying to solve this problem one by one on their own, by definition, a lot of people are not going to do it. And that could be for all sorts of reasons ranging from bad luck to they didn't read their 401(k) to they didn't have one to you know they didn't engage in time and we could just go on and on, right?

But the system is designed to do that. It is designed to make a societal failure an individual failure so that we don't demand change. So the real key to this in my view is to make it clear that people are not alone. That in fact they are the majority and that something can be done for them. This is a problem that has to be dealt with out of Washington. That is the only way you're going to solve it.



Teresa: That’s all the time we have today. Thank you to Helaine and Tony for joining our expert roundtable and thank you, Barbara and Arthur, for sharing your stories.

And now it’s time for our final segment. This is where we feature the “bright spots” of retirement: the stories that are giving us hope for retirement reform. 

Today, our bright spot focuses on one way people aren’t blaming themselves but taking action. Employees don’t have a say in the plan they are offered at work so they are using the courts to protest the high, and often hidden fees, baked into the 401(k) plans their employers choose.

A pioneering study by Demos reported that over a lifetime, fees can cost a family an average of $155,000. But there’s a new trend that offers hope to workers. Employees have organized  in class action suits to recover savings lost to high fees. They have won their cases against high-profile companies. In 2017, the Supreme Court backed up their rights, ruling that employers are fiduciaries and have a continuing duty to act in their employees’ best interest.



Teresa: Thank you so much for listening to Episode 3 of Reset Retirement. You can find us on Apple Podcasts, Spotify or wherever you find your podcasts.

This podcast is brought to you by the Retirement Equity Lab at The New School. 

It was produced by Bridget Fisher and Anna Low-Beer and edited by David Fuchs. 

We hope you’ll subscribe and join us for our next episode where we ask, “How long can we work?”