If you’re worried about making ends meet in retirement, you’re not alone—around half of Americans feel the same way. As data from my research team at the New School’s Retirement Equity Lab shows, as many as 40% of older workers could face downward mobility in retirement.
But if retirement insecurity is such a widespread and systemic issue, why do we so often feel shame on an individual level for not saving enough? Why does the weight of the retirement crisis fall on each of us personally?
In the third episode of my podcast Reset Retirement, I explore the knotty issue of retirement shame, with help from those who have studied the issue deeply as well as those who have lived it. The key takeaway is that the retirement crisis is bigger than any one individual . As Washington Post columnist and author Helaine Olen told me, “This is not a personal problem—this is a political problem.”
Shock and shame
At the individual level, however, it’s hard not to see retirement as a purely personal matter. When we fall short, we tend to blame ourselves. Such is the case with Archer, a 64-year-old English professor who shared his story with Reset Retirement.
At this point, Archer told me he has saved roughly $100,000. That is more than many Americans manage to save, but just a fraction of what retirement experts consider sufficient savings for someone of Archer’s demographic. “According to what I read, I’m in better shape than most Americans—and I am shocked,” Archer said. “I am certainly not a role model.”
When I asked about what led to Archer’s inadequate savings, he mentioned “financial foolishness” and “the callowness of youth.” Archer blames himself for not saving enough even when his pay was low, such as the seven years he spent as an adjunct professor without benefits.
So is Archer really to blame for his retirement situation?
According to Olen, this is the wrong question to ask. Americans are taught to think of retirement as a purely individual issue. But this framing, Olen said, “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.”
Empowerment
But if the retirement system as it is forces us to shoulder the burden of saving alone, the flipside of shame is the potential for empowerment. That is the story of Barbara, a 52-year-old nonprofit administrator who also spoke with me for the podcast.
Instilled from childhood with the imperative to save out of every paycheck, Barbara began her retirement fund in her first job out of college. But later in life the unexpected hit: a divorce and the loss of job in quick succession, leading to a spell of unemployment and single motherhood in expensive Manhattan.
“It 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,’” Barbara explained. “And then you go through divorce, you go through job loss, you go through spending half to three quarters of your savings.”
But now Barbara has a new job and a renewed outlook on saving. “I really feel like financially I am in a place where I have control of my money and not the other way around,” she told me. “All I can do now is to not be judgmental of [others] or myself and just offer up what works for me.”
Solutions
How can we help everyone be like Barbara? The most commonly heard refrain (particularly from the financial industry) is a call for greater “financial literacy” to help Americans save more and save smarter.
But financial education is no panacea. As pension economist Tony Webb told me: “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.” Financial education can help people do more with what they have, but it cannot raise wages or prevent against shocks like layoffs and medical emergencies.
Another factor often ignored in the conversation around financial education is the complicated influence of marketing. For every one dollar spent on financial literacy, the financial industry spends $25 on marketing to potential customers. Our individualist approach to retirement, said Olen, “allows industry to pitch another myth, that there’s some magical person out there who can help you surmount all of these problems.”
As for solutions, my colleagues at the New School’s ReLab and I believe it can only be a collective one. To ensure widespread retirement security, Webb said, we must “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.”
Olen agreed. Our current retirement system “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.”
