Introduction: Where We Are and How We Got Here

Course Progress:

Regardless of how old you are now, like me, you’ll probably have a harder time pulling off a financially secure retirement than your parents did.

Fundamental changes in American life make it challenging for today’s generations to achieve a comfortable life after work.

According to the 2018 Retirement Confidence Survey from the Employee Benefit Research Institute, only 32 percent of retirees are very confident in their ability to live comfortably throughout retirement.

If you’re one of the majority of Americans who fear for their financial security, you’re right to be concerned. Here are 10 reasons why the last decades of life are harder now.

1. We’re living longer

In 1935, the average 65-year-old could expect to live 12 more years. Today, the Social Security Administration (SSA) says, the average person who is 65 can expect to live two more decades.

Grandma and Grandpa’s 12-year retirements required far less savings than you’ll need today, even accounting for inflation. Supporting yourself without working for a longer period of time takes a lot more money.

2. The Great Recession

The Great Recession of a decade ago robbed workers of earning power. It hit men and women in their 50s and early 60s especially hard. Home values and investment savings also plummeted.

Some people are still digging out from that hole.

3. Private pensions are nearly extinct

Only a few decades ago, most large employers offered “defined benefit” pensions that guaranteed retirees and their spouses a fixed monthly payment for life. But times have changed, and traditional pensions are going the way of the dinosaurs. Their replacement? The “defined contribution” plan, e.g., 401(k) plans.

According to a 2018 report from Willis Towers Watson, only 16 percent of Fortune 500 companies offered a defined benefit plan to new hires in 2017, down from nearly 60 percent in 1998.

Defined benefit plans put the onus of lifetime income on the employer. Defined contribution plans transfer the responsibility of retirement income to the worker.

Plans like a 401(k) require workers to invest and manage their own money. If it’s not enough money for a comfortable retirement, it’s the worker’s, and not the employer’s, problem.

4. Social Security is under pressure

Unless Congress acts, Social Security trust fund reserves are expected to run out in 2034, according to the SSA. Even if lawmakers address that issue, the amount you receive might depend in part on when you start claiming it.

Keep in mind that Social Security was never meant to supply a complete retirement income. It was designed to keep people too old to work from falling into poverty. In 2018, the average monthly benefit was $1,409.91, or a bit less than $17,000 a year.

The 2018 federal poverty level for a single person is $12,140. So, while Social Security will keep you out of poverty, it doesn’t do it by much.

5. Interest rates have been low for years

Retirees in previous generations earned higher interest on their savings and low-risk investments. But interest rates have been hovering near historic lows for years. That means many of today’s retirees must survive on less or take on riskier investments to generate income.

6. Seniors have more debt

Earlier generations tried to enter retirement with a paid-off home and no debts. That’s harder to do today.

According to the Consumer Bankruptcy Project, the number of Americans age 65 and older who file for bankruptcy has tripled since 1991. The reasons include reduced income and increased health care costs.

7. Folks might have to retire sooner than they hoped

Many workers today are being forced to work into their late 60s and early 70s. But poor health, a job loss or the need to care for loved ones can force people to retire before they’re financially ready.

8. More seniors are single

About 12 million adults age 65 and older live alone, according to the Pew Research Center.

Many find freedom in being single, but it can be difficult for one person to support a household financially.

9. We’re not saving enough

According to the Center for Retirement Research at Boston College, the median combined 401(k) and IRA balance for households aged 55-64 was only $111,000.

Retire with that balance in savings and, even if you can earn 5 percent on your investments, you’ll be getting less than $500 per month.

10. Medical expenses

People approaching retirement often assume their medical care will be completely paid for by Medicare. Not true.

Medicare doesn’t cover all your expenses, and you’ll be paying a monthly premium. According to a report from Fidelity Investments, a 65-year-old couple will need $280,000 to pay for medical expenses during their retirement years.

One of the reasons we’ll spend so much on medical care? We’re fat. The Centers for Disease Control and Prevention says 41 percent of Americans over 60 are considered obese, which can lead to heart disease, stroke, Type 2 diabetes and certain kinds of cancer.

Been worried about retirement? Now you know why

Now you’ve seen some reasons why this generation, as well as the ones following it, will have a tougher time finding gold for their golden years than their parents did.

But, while a comfortable retirement isn’t as easy as it used to be, it’s still possible. This course is designed to help you reshape your future in just a few minutes per week.

A better retirement in 14 weeks

For most of us, elementary school took six years. Junior high and high school, six more.  Altogether, 12 long years of education, plus kindergarten and possibly pre-K. Then, for some of us, four or more years of college; maybe a couple more for graduate school.

That’s a heck of a long time, yet it was time well spent, wasn’t it? After all, you learned to read, to do math, to write. You learned a little about history, art, music, geography and all the other things that help you appreciate life and civilization on planet Earth.

All that education didn’t make you rich, or even get you a job. But it furnished your mental shed with some of the tools necessary to succeed.

But school didn’t teach us some of the practical things in life. For example, how compound interest can enslave you or set you free. Or why you should always pay yourself first. Or, for that matter, how to focus on your own vision of happiness instead of society’s. When it comes to these kinds of things, you’ve been on your own all this time.

Now, I’m going to ask you to step into another classroom with me, at least a mental one. Not for 12 or 16 years; just 14 weeks. At the end of that time, you’re going to have the tools to live a life of financial freedom and abundance.

You’ve heard the expression: Give someone a fish, and you’ve fed them for a day. Teach someone to fish and you’ve fed them for life. That expression sums up the purpose of your formal education as well as the purpose of this course. For the next 14 weeks, you’re going to learn to fish. Here’s a quick preview:

Your retirement won’t necessarily be secure at the end of that time. But for the rest of your life you’re going to know how to eliminate your debts. You’re going to learn the mechanics of assembling a solid retirement. And, (bonus!) you’re going to learn what’s important in your life, and how to appreciate it.

Not bad for an hour or two a week for 14 weeks!

If you’re like me, you’re going to leaf through all 14 weeks before you sit down and do the work. Good plan. But don’t just read it, then set it aside. Thumbing through your geometry textbook didn’t teach you all the angles. At some point, you had to put the book down and pick a pencil up. You had to work problems to get it. Same applies here.

As they say in Alcoholics Anonymous, in order for the program to work, you’ve got to work the program.

On the following pages, we’re going to provide both the inspiration and the information you need to ensure you’ll be in the best possible position to plan and finance the retirement of your dreams.

How to use this course

To keep the course manageable, we’ve mapped out a 14-week “boot camp,” with a lesson and exercise each week. While a few weeks contain thought exercises, most require you to fill out a worksheet. You can wait until you get to them at the end of each chapter, or download them all together here.

Inside that download you’ll find two folders: one marked Edit and one marked Print. The Edit folder has a version of the exercises you can complete with word processing or spreadsheet software. The Print folder has everything in a .PDF format better suited for printing out copies to write on.

You can also complete the exercises through Google Drive as you go along, if you prefer.

Here’s how that works: At the end of each chapter you’ll see a link to the exercise. Click that to open it up online, no special software or download needed. From there, you have some options:

  • Print it. If you like doing stuff by hand, print it out. Go to “File” in the upper left, and then the last option on the list is “Print.”
  • Download it. If you have your own word processing or spreadsheet software (such as Microsoft Word/Excel) that you like better than Google’s free one, you can save a copy to use elsewhere. Go to “File” and then choose “Download As … ” and pick a compatible file format. This is usually the first one (.docx or .xslx).
  • Make a copy. If you’re like me and want to keep things online, just make your own private copy. Nobody else will have access (unless you specifically share it with them). Go to “File” and “Make a copy.” You’ll be prompted to rename the file. When you do, a new window will open with your personal version of the spreadsheet. You can immediately edit it and all your changes will be saved online. Note: You’ll need a free Google account to do this. Don’t have one? Get it here.

Now you’re ready to rock! But here’s the most important thing: Complete the course at your own pace.

It’s certainly possible to get through it faster than the 14 weeks we envisioned. Or, if you’re so inclined, take 20 weeks.

Bottom line: This is your course, designed to help you discover and fund your perfect retirement. We’re just here to help. And so are other people taking the course: We’ve created a Facebook group for everyone enrolled in the course to discuss it and share their own advice with each other. Participation is not mandatory, but please join and jump in!

You’ll also find a feedback form at the end of each chapter. We’d love to hear what you think so we can make this course even better for everyone.

Ready to get started?