Reset Retirement Podcast

Ep 5: Where Do We Go from Here?

August 19, 2019

Over the last four episodes, we’ve explored how individuals fare in today’s retirement system. In the final episode of our first season, we ask: where do we go from here?

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. 


In episode five, we speak with baby boomer and literature professor Ira and millennial and PhD student Owen to explore how both younger and older generations are affected by our retirement system.

Next, we hear from our expert round table, including host Teresa Ghilarducci and guests Beth Finkel, the state director of AARP New York, and New School economist Tony Webb, for a discussion of the future of retirement policy. From age discrimination to a lack of retirement plan coverage, Teresa, Beth, and Tony talk about the policies we need to make a better system for everyone a reality. Finally, we highlight research showing millennials are ready to take action and a group working to inject retirement security into the 2020 presidential campaign.

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.


Beth Finkel, AARP NY State Director

As State Director Beth R. Finkel leads the day-to-day operations of AARP New York, the most visible and successful organization in the state advocating for New York’s 50 plus population. During her tenure as State Director, AARP’s powerful lobbying efforts on behalf of their 2.6 million members have led to historic NYS reforms including passage of the Care Act, Assisted Living protections, Anti Predatory Lending, Paid Family Leave and Affordable Housing in NYC legislation and numerous bills on Kincare.

Prior to her appointment as State Director, Beth was the Senior Manager of Community Outreach for AARP New York where she was responsible for all community programs and activities that serve the organization’s membership and engage its vast network of over 5,000 active volunteers across the state. In her role, Beth specialized in programming and advocacy for older New Yorkers around hunger, caregiving, grandparents raising grandchildren, multicultural outreach, livable communities, financial security, and long-term care. A native New Yorker, Beth holds a Masters of Social Work from Yeshiva University in Community Organizing and a Bachelor of Science from American University in Business Administration.


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 fifth and last episode of our series, we look at what our retirement future might be for younger generations. We ask our guests and our expert roundtable, “Where do we go from here as a nation? What can individuals do?”



Teresa: Over the last four episodes, we’ve explored how individuals fare in today’s retirement system. We are grateful for the people who told their work-life stories and retirement plans. Through them, we’ve learned about the system’s cracks and flaws in everyday lives.  

The truth is, we are not alone. The bumps and fear about retirement are shared by almost everyone. AARP reports that 74% of workers are anxious about not having enough money to live comfortably during retirement. Today we talk with millennial Owen and boomer Ira about how to create a better system for those nearing retirement and those just beginning. 

I'm happy to welcome today's Reset Retirement guest. Ira, can you introduce yourself?

Ira: Hi, I’m Ira. I'm a professor of literature, 57 years old and I have one kid, live in Manhattan 

Teresa: So did you start saving for your retirement at the beginning of your career?

Ira: I started teaching right out of, right as soon as I got my master's degree - you know my mid 20s. And you know I earned twelve thousand dollars - my first salary - but I was able to put away like twelve hundred dollars a year. You know at that point that's 10 percent. As time went on, you know, I had thirty or forty thousand dollars and then my parents died. You know, everything is distorted by the inheritance. 

Tersa: Yeah. 

Ira: Because, you know the money comes in, so all of a sudden I could put twenty five thousand dollars into know...every year because I'm not living on my salary. So you know, it was an accident You know you might not need lots and lots of money but you need a chunk at certain turning points. It's all luck.

Teresa: So how are you feeling about your retirement? And you’re a professor, so how do you feel about working ‘til you’re 65, ‘til you’re 70. How does that plan and that imagining go in your head? How do you feel about it?

Ira: I mean I like teaching, but you know my parents left me money, I was able to save money, invested money in the market, the market has exploded. And so, I mean it will be my choice. I'm working for a legacy. Right now, I'm not working for my retirement. You know, I would like to work until my early 60s I guess, you know, depending on my health. And we'll see what happens. It could be soon or it could be later, I’m not sure. 

Teresa: So what would you advise a young person in their 20s to do?

Ira: I mean it's tough. Most people's salaries are quite small and cover the basics and leave very little left over. So, I don't know. You know, I guess if you work for a company that has a match, take the match. And yeah I mean, if possible keep you know, a year or two aside. These are very aspirational things, most people I know, their combined net wealth is close to zero.

Teresa: You're 57. You have friends about that age. How are they doing as they're approaching their 60s and retirement age?

Ira: Very badly, very badly. And I know a couple of my closest friends have negative net wealth. You know, especially with student debt, I have a friend who is in his early 60s who's still paying off student loans. 

Teresa: For himself?

Ira: Yeah. 

Teresa: Not even for a kid?

Ira: Yeah, no for himself.

Teresa: What's his plan? 

Ira: Die young.

Teresa: And your other friends?

Tersa: Oh, you know, another friend works for Trader Joe's, which is a relatively secure job. He has a master's degree. He makes 17 bucks an hour. He's in his late 40s. You know, what it causes, when you look at the situation, is total despair. They look at this situation, they just can't believe they're in it.

Teresa: Ira, thank you. 


Teresa:  I'm really happy to welcome today's Reset Retirement guest, Owen. Owen, can you introduce yourself?

Owen: Sure. My name's Owen Davis. I'm a freelance journalist, formerly a full time financial reporter, and now I'm studying economics at The New School as well.

Teresa: Well today I'd like to talk to you about your retirement saving and your approach to it. But you look pretty young. How old are you?

Owen: I'm 30. 

Teresa: 30. So you're kind of thinking about retirement?

Owen: I've been thinking about retirement. As a financial reporter, it came up a lot. But I think for me, even before then, it had been something that I thought about. I think that, for my generation, the trauma of the financial crisis kind of weirdly instilled both a fear of the financial sector but also a respect for saving in the future.

So for me personally, when I when I graduated college, I immediately actually did Teach for America so I taught for two years in a public school. And they had a pension, there I was in the union, so I immediately thought this is good, this is a way for me to start building this up. 

Teresa: Tell me more about the union pension plan and after you left in two years, what you rolled your money into.

Owen: Right.  So I don't want to make myself seem like at the age of 23 I was the most foresighted and responsible individual. When I left the teaching profession, I kept my assets there for a few years and eventually rolled them over into an IRA with Vanguard.

Teresa: So you're getting some money now because you're working a little bit. Do you put a portion of that money into your IRA?

Owen: No I'm not currently. The cost of living in New York is too much to justify. This is just something going into grad school, going into freelance mode again. And it's not good pay.

Teresa: If Social Security were voluntary, would you pay into it?

Owen: No. I think if Social Security were not voluntarily, I’d be like, “I can’t afford this right now.” So the way the decision is made for you probably does have an impact. It’s funny, I never thought about it in that way.

Teresa: Do you think you're unusual among your friends or people like you in America today?

Owen: People who see these kind of ups and downs and millennials who have, going in and out of different types of employment, I think there are some you know private solutions that they're reaching for. You know there are these apps like Acorns or Wealthfront or Betterment where it seems to kind of streamline things or you know, this is an automatic system it just takes a little bit from my paycheck or Acorns rounds up your purchases and puts pennies into a low fee kind of ETF situation. And I do see some of my friends using that. But it's also, I think, somewhat of a trend to move towards apps. And we might not trust JP Morgan and Goldman Sachs generationally but we have a little bit more trust at least for now in Silicon Valley in some of these apps.

Teresa: What kinds of policies do we need going forward to make sure that people of your age get the power of compound interest? That you save a dollar now, you hardly miss it, but then it compounds to something significant later.

Owen: See, I don't think...I think that very few millennials would see their retirement situation as connected to that of their generation or that of other people in their class or their working situation. I think maybe this is one of the drawbacks of having these kind of apps and it's all very personalized and it's “my” responsibility whether I have the app or not or whether I do this. I don't think there's a lot of awareness that there are actually policy options that could make this a collective issue and not just a personal problem.

Teresa: So all in all, do you think that the retirement system is working for you?

Owen: No I don't. I don't think it is. It feels very well set up for those situations previously where I had the full time salaried job when I had union representation. Those are situations where I felt like, yes absolutely this system, and I've felt I can comfortably fit into this system and it'll work for me. 

And then outside of those situations it's a dog eat dog world where I don't know, if I don't provide my own retirement savings: too bad, that's my fault. 



Teresa: Thank you Owen and Ira for sharing your experiences. Despite their different generations, neither Owen nor Ira have a lot of faith in today's retirement system. Their experiences have taught them that retirement savings is a high stakes game with just a few winners. 

My question for today's experts in our roundtable is: how do we improve the system for those nearing retirement age and those people who are just starting out in their careers? Welcome Beth and Tony to the Reset Retirement podcast. Can I ask you both to introduce yourselves? Tony?

Tony: Hi, yes, it's Tony Webb. I work at ReLab in The New School. I'm an economist and I've spent the last 20 years researching pensions issues.

Teresa: And Beth?  

Beth: I’m Beth Finkel. I'm a state director for AARP New York.

Teresa: So Tony if someone did everything right -- they’re a rule follower and they learned their lessons -- would they be okay in our system?

Tony: The problem is that the current system falls very, very far short of the ideal. We did an analysis. We assumed that households did everything right. They invested in low cost funds, they never withdrew, they invested in an appropriate stock bond portfolio. We found that households under the current system arrive at retirement 84 percent short of what they would have accumulated in that well-designed system.

Beth: What I've found in over more than 20 years at AARP, it's very rare I ever run into people who actually have budgeted for their out-of-pocket costs after they retire for health care and they can be huge. It can be over 300,000 dollars for a couple over their lifetime of retirement. And that's tough to budget for especially after the numbers that Tony just told us.

Tony: I view myself as a person who's financially literate. I’ve never made a budget. My honest opinion is that we have to design a system for people who don't or can't budget. And we've got to take the money out of their paycheck and invest it for them.

Teresa: I told people after the 2008 financial crisis: Isn't it great that Social Security is not voluntary?

Beth: Mhmm.

Teresa:  That people didn't have to sit down with pen to paper and figure out how much to contribute to Social Security this month—

Beth: —or where to invest those dollars!

Teresa: Yes.

Beth: I mean that was unconscionable. I'm so glad that the federal government did not get that through.

Teresa: Yeah, you mean like when President Bush, the second one, wanted to privatize Social Security. That would have been a disaster.

Beth: A disaster.

Teresa: And that was a proposal back in 1935, that Social Security be voluntary. So here we are. We don't have a voluntary social security system and we're really grateful. I think so many people are grateful that it wasn't voluntary. But yet we have a voluntary pension system even though we know that Social Security isn't enough. What do you think of that?

Beth: It's interesting so you know, we've got basically three buckets, right? You've got Social Security, you've got a pension if you're lucky enough to have been working in a place that had pensions and we know those are few and far between in these days, and then finally you've got your 401(k)s or your IRAs. And those, for the most part, are voluntary and that is a problem which is why nationally we were trying to work on this Secure Choice in many states. California, Oregon, Illinois have passed it, which, it would be mandatory for companies to participate in a state facilitated retirement fund. And companies that had over met, for the most were 25 employees, would be mandated to participate and employees of those companies would have to literally opt out of the system rather than the opt in because, you know you just have to have it automatically taken out of your paycheck.

Teresa: I worry because about 25 percent of employees work for companies with a lot less than 25 employees. 

Beth: Yes, that's true. 

Teresa: Doesn't that system leave out 25 percent of the people?

Beth: Yes, it absolutely does, except it's a step in the right direction—and for all of us that work on policy, that work is incremental and we have to keep thinking about that every day. You know, finding day, but...

Teresa: It’s OK for the ivory tower. I so appreciate that point of view. 

Beth: But you know so, for instance, in New York State, we have a Secure Choice. The governor put money in the budget this year, he's putting together a board right now which we're very excited about. The New York state law is not mandated for employers. And it's not employee opt out, it's employee opt in. But it is a huge step in the right direction.

Teresa: With these financial advisors who say you're not paying anything for your advice but yet they're in very high fee assets. Is there anything the government can do?

Tony: So first of all let's establish what the problem is. The problem is that when you go to an adviser, the adviser is only obliged to recommend a suitable investment. And the suitable investment can be a very, very high cost fund. Now, the Obama administration attempted to introduce a rule whereby advisors in relation to IRA plans would be obligated to act in the customer's best interest. And in my opinion all advisers, just as doctors, ought to be obliged to offer advice that's in the client's best interest.

Teresa: AARP is in Washington advocating for for people. What—

Beth: Absolutely. 

Teresa: —are they doing? 

Beth: We were sorely disappointed that the fiduciary rule was taken out, that regulation.

Teresa: Who did that?

Beth: The current administration. It's something that we are not backing down on. We believe the fiduciary rule needs to be in place. Tony is absolutely right. Every other adviser pretty much needs it. It's really unconscionable they're running after their own commissions and their own companies’ profits more than the people who are depending on them for good advice.

Teresa: Yeah, one of the pieces of advice we've heard from experts and our guests is if your adviser doesn't say they’re a fiduciary, run. Just run, run from your guy. They are not.

Beth: This is not your guy, he’s somebody else's guy.

Teresa: His own!

Teresa: Given that ordinary people really have a hard time navigating the system, even if they follow all the advice, why isn't retirement security one of the top issues among the populace and why aren't we doing anything about it?  

Beth: I think it goes back to what you all were saying before. It's so confusing and people don't start off life with an education on this. And then it creeps up on you, you don't realize it. And people tend to pay themselves last and you have to pay yourself first when you're planning for your retirement. People lose sight of that because they care about the people that they love. They want to take care of them. But you know, you better love yourself because otherwise one day, you're going to be in trouble.

Teresa: But then, then I hear a lot of stories of people getting to that point and they say, they have a lot of regret. And it seems like that's a bit misplaced, that kind of shame or regret, that something about the system sets us up to blame ourselves.

Beth: Well, I think, you know, look at Social Security, right. Social Security is due to start to run out of funds in 2034, which is not so far away when you think about it. It will be able to pay out 75 percent at that point if something's not done. And there are a number of great policy ideas out there to solve it... but you have to be able to take it on. You hear millennials talk about, “Oh, it's not going to be there for me.” Well it is going to be there for you. You have to have the political will to make sure, you've got to get organized. 

So we need to make sure that everybody's voices are heard, all generations, not just the 50 plus but the generations to come. We've got a lot of people aging right. New York state, we just did a study, one in every six New Yorkers is now over 65. So we really have to get it together on making sure that people can have a secure retirement because otherwise they're going to be dependent on our welfare systems. And that's really expensive and we're gonna have to pay taxes to meet those needs.

Teresa: From AARP’s perspective, Beth, or maybe just your own, personal perspective, do we need to know more about older workers’ situation and maybe justify an Older Workers Bureau to take numbers, take evidence, take testimony? What do you think of that idea?

Beth: Actually, AARP is working federally on a new piece of legislation. It's called POWADA, which is protections for older workers because they do not have the same standing in court when it comes to age discrimination in the workplace as you would have for someone who is disabled or because of your ethnicity. And so they're working to get that done. It's been recently introduced in Congress which is very exciting. 

It's something that needs to be done because older workers really need that standing because we know, again on that high anxiety research we asked, and over 50 percent of people had either experienced age discrimination in the workplace or seen it in their workplace. So it's a really big problem.

Teresa: And it's things like I don't think that my employer likes older workers as much as younger workers? 

Beth: I think it's more that they're thinking that you know younger workers coming in and their salaries are lower and their benefits are lower and for an employer this is what, anecdotally, I'm hearing from workers, that they feel that if they have to lay someone off or you know shift work load it's going to be in favor of a younger worker who's more economical to the business.

Teresa: And what about if you're unemployed around 55. Do you think it's easier or harder to get a job?

Beth: It is very difficult, very difficult. As a matter of fact, we did a financial education program last night. We do them from time to time at AARP and the majority of the participants were women. The majority of them I would say were between 55 and early 60s. And I would say at least half of them said that they were currently either unemployed or underemployed or working at jobs that the salaries were a lot lower than the salaries that they were used to before the 2008 recession. And that is making them all have high anxiety about how they're going to afford their retirement years. 

Teresa: In the 1930s we had a retirement crisis, a great depression. Older people had nothing. And we saw that mobilization of voters and the people and marches made all the difference. Do you think that that's what we need now, is political movement to help end age discrimination, to build up Social Security, to get state by state a Secure Choice?

Beth: I don't think anyone can ever point back to any time in our nation's history that without a social movement, without everyday citizens getting their voice heard to say what's important to them and what they expect their legislators to do. Without that, we're never gonna get any change.

Teresa: And Tony from your perspective, if the political change what was there, if the will was there, is there are other technical solutions to this problem?

Tony: The technical solutions are really simple. We could fix Social Security in a heartbeat. The UK had very similar problems to the US and introduced a national savings plan that achieved near universal coverage. 

Teresa: And it's popular now? 

Tony: It's very popular. So we know what to do. All we need is the political will.

Teresa: Well, this is a great way to end the podcast. We have someone who’s an expert in the politics that's very hopeful if we can mobilize. We have our past history to know that works and we have our technical expert to say that actually we can engineer an easy, affordable fix. Thank you. 

Tony: Thank you. 

Beth: Thank you.


Teresa: That’s all the time we have today. Thank you Beth and Tony for joining our expert round table discussion and thank you Owen and Ira for sharing their stories. 

And now it’s time for our final segment, where we feature the “bright spots” of retirement -- the stories that give us hope for retirement reform. 

Anna: I’m Anna Low-Beer, Assistant Director here at the Retirement Equity Lab. As a millenial, one thing that gives me hope is seeing my generation step up to the plate. Because most of us entered the job market just after the Great Recession. We know that the system has flaws — namely, that we’re forced to bear all the risks in preparing for retirement.

But recent research shows that millennials are willing to take action. The National Institute for Retirement Savings, for example, found that 60% of millennials are more willing than other generations to save. T. Rowe Price reports that we have upped our savings rates in the last year, and Fidelity says, we are outpacing other generations. 

The bottom line is: younger adults are willing to do what it takes to have a shot at retirement. But the first step is to make the issue a top priority for national policy. And that’s why we’re thrilled the Economic Policy Institute is raising up retirement security in the 2020 Campaign. EPI knows that millennials are key to enacting retirement reform, and I’m excited to see how my generation will impact the debate. 



Teresa: Thank you so much for listening to Episode 5 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, with music from Podington Bear and Lee Rosevere. 

This is our last episode of this series. We’ve enjoyed sharing the real stories of retirement and exploring how we can fix our broken system. We hope you’ll subscribe and join us for our next Reset Retirement series.