Sticks and Stones

  Each year, the Oxford University Press proclaims a “word of the year,” — and this year they chose “rage bait[i].”

Now, even the Oxford proponents admit that this is actually TWO words (all while professing that they are not trying to “rage bait” folks by choosing two words) — distinguishing it from the “etymologically related” clickbait as having a more specific focus[ii] on evoking anger, discord, and polarization. 

In other words, whereas we once said “sticks and stones may break my bones, but words will never hurt me…”  Well, now it seems words can. 

We are, of course, routinely inundated with negative assessments of American workers’ retirement readiness, retirement confidence, and financial acumen.  We’re told that the system is “broken,” that there’s a retirement “crisis,” that billions (if not trillions) of retirement savings have been “forgotten,” and that individuals think they will need about twice as much in retirement savings as surveys tell us they actually have. 

And this from the folks who are supposedly proponents of the current system. 

Indeed, as anyone who reads these columns can attest, our industry is replete with posts designed to encourage clicks — but rage?  Not so much (well, apart from these columns).  See, “we” not only perpetuate these dismal assessments, but we also click, like, AND share them with our various networks. 

And every time you do, there’s someone out there who actually believes the system is broken and needs to be replaced and says to themselves (and often to folks on Capitol Hill), “See, even their experts think it needs to be replaced!”

Moreover, that pessimistic commentary from retirement industry leaders does find its way into mainstream publications.  Publications that, it seems fair to say, operate under the assumption that “if it bleeds, it leads.”  And so, the negative headlines are then — sadly —often supported and, worse, magnified by commentary from (ostensibly well-meaning) industry experts. 

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The problem isn’t that retirement outcomes can’t be improved. They absolutely can. Coverage gaps persist. Pre-retirement distributions (a.k.a. “leakage”) remain a challenge.  Workers rely on default rates that are too conservative — and yes, some do, in fact, lose track of old accounts. 

Workers have no idea what their retirement financial needs will be — but the headlines consistently suggest they needn’t bother — it’s hopeless, after all — even the experts say so.  While that old adage cautions against the impact of “sticks and stones” words — yes, mere words — can, in fact, be hurtful.

Sadly, rage bait thrives on oversimplification. It ignores the reality that today’s VOLUNTARY retirement system — while imperfect — has nonetheless helped millions accumulate meaningful savings, often with employer contributions they wouldn’t have received otherwise. It dismisses decades of progress in automatic enrollment, auto-escalation, and default investments because those facts complicate the narrative.

As we head into a new year, I’d ask that our industry (that’s YOU, gentle reader) rethink our current positionings.  That we’d be willing to engage in a little “rage baiting” of our own — to call out surveys and headlines with false and misleading narratives for what they are —click bait — and worse.

Let’s instead highlight the very real possibilities that the current system, properly used and yes, still evolving – can and has already provided tens of millions of working Americans.

-          Nevin E. Adams, JD

[i] In case you were wondering, the runners up were (apparently) aura farming and biohack. For those interested in a historical perspective, you can check out the selections from the past couple of decades at Oxford Word of the Year: defining the past 20 years - Oxford University Press. 

[ii] Even more precisely, they note that it applies to “Online content deliberately designed to elicit anger or outrage by being frustrating, provocative, or offensive, typically posted in order to increase traffic to or engagement with a particular web page or social media account”.

Things That Make Me ‘Mad as Hell’

  So, what kinds of things get your blood “boiling?”

Some of you will recall that back in 1976 there was a movie called “Network” with a big cast that got nominated for a bunch of academy awards including best picture and director (didn’t win), as well as best actress and actor (won both, as well as best supporting actress and several others). The underlying premise of the movie was one of corporate greed, more specifically the extremes to which TV networks would go to garner ratings. The most extreme was allowing an aging network anchor named Howard Beale to remain on camera after he said he was going to blow his brains out on national TV.

Well, he didn’t — but he did wind up being positioned as a kind of “mad prophet” ranting about the ills of society, leading up to an evening where he encouraged similarly frustrated viewers to go to their respective windows and shout “I’m mad as hell, and I’m not going to take it anymore!” While that frustrated call to action likely didn’t actually change anything — it apparently was good for ratings.

While we still have TV ratings (though I’m amazed at the mere slivers of population that these days constitute “winners” in the various time slots), these days it’s all about clicks, views, forwards, and impressions. 

And it was with that in mind last week I shared with those in attendance at the Leafhouse National Retirement Symposium (LNRS) a list of things that made me “mad as hell” — things that those in our industry generate, promote and often share as fact without any application of common sense, and no apparent appreciation for the damage done by their complicity in sharing such nonsense. 

Here's my list — of things that make ME “mad as hell” — in hopes that you’ll agree.

1. Reports that label as “abandoned,” unclaimed or “forgotten” account balances that have simply been “left behind.” See Talking Points: Third Time No Charm in ‘Forgotten Account’ Fantasy.

Seriously — does ANYBODY think that 20% of the total balances in the 401(k) universe is “forgotten?” And yet there were any number of retirement industry folks (and trade publications) that faithfully picked up and shared this third bi-annual report from Capitalize, which every year gets even bigger and more exaggerated (the “black magic” of compounding). 

Sure, there are SOME in that category — but TRILLIONS? This report is nonsense — and shame on you if you gave it legitimacy by passing it along with anything other than jaw-dropping incredulity. 

2. People who think “good faith compliance” with the law could include completely ignoring the law. See Talking Points: Braking ‘Breaking’ News.

Last month, the IRS surprised us all with the release of final regulations regarding the Roth “cap” on catch-up contributions. And then the rumors started. 

Let’s face it — the regulations were a LOOOONG time coming. So long in coming that there were some who were thinking (a) they weren’t coming at all, or (b) the IRS would simply push back the enforcement date (as they had previously). To their credit, most of the industry publications acknowledged the complexity of the read and indicated there would be more to follow. 

But then some misread the effective date of the final regulations (01/01/2027) as applying to the date on which the Roth cap on higher-income individuals would be applied — which had been set as 1/1/2026 in the preliminary regulations issued in January — and which the final regulations stated was NOT impacted by the final regulations. 

Worse — they somehow saw the IRS’ lenience in allowing for “good faith compliance” with the (admittedly) late issuance of the final regulations as allowing them to just ignore the 2026 date. And then there were the folks who, in their hurry to share that news, got on social media to do just that.

Folks — if you don’t KNOW the answer, don’t make matters worse (not to mention your credibility) by sharing it. 

3. Pretending like everybody used to have a defined benefit plan. See A Penchant for Pensions?

This one’s a “golden oldie” — a “myth” that keeps coming up. Indeed, in a recent Fortune article, Teresa Ghilarducci tried to explain away the lack of an apparent retirement crisis by claiming that older Boomers all had pensions.

The truth is that, at its peak, only 38% of workers in the private sector were ever covered by a pension. And “covered by” only means they worked for an employer that offered a pension. Only about 12% ever got a full pension from the plans they were covered by. You want to talk about a retirement crisis? Think about the one we’d have if we were relying on defined benefit plans.

4. Adding up 20 years’ worth of potential expense and presenting it as a lump-sum retirement savings target. See: Talking Points: A Health Care ‘Scare’

Are you ready to spend $86,000 on cable TV in retirement?

I know, crazy, right? And yet that’s the kind of math being used to get people’s attention about retirement these days. The most recent — an annual study by Fidelity that now estimates that a 65-year-old retiring in 2025 can expect to spend an average of $172,500 on health care and medical expenses throughout retirement. There are some lengthy caveats footnoted on that projection, but suffice it to say that the number is — and is certainly intended to be — an attention-grabber. 

And, let’s face it, a headline that said you’re going to need to spend $8,625 per year in retirement on health care (1/20 of $172,500) really doesn’t have the same impact — particularly if you are paying attention to what you are spending on health care prior to retirement, which may well be less than that.

In which case the headline might actually be something like “you might not have to spend as much in health care after retirement as you do now.”   

But where’s the panic button for THAT? 

5. Surveys that ask people who have never done a retirement-needs estimate to estimate the “magic number” they’ll need to save for retirement. See No 'Magic' in These 401(k) Retirement Numbers

Another annual report that makes my blood boil is one that purports to share a “magic” number for retirement, based on what survey respondents said they thought they’d need. As though they’d know.

It always garners a lot of coverage — generally climbs higher from the previous iteration — and is always positioned next to numbers from completely different people as to what they actually have accumulated, and always about half the magic number. 

There are many problems with reports like this — none of which the breathless reporting of the conclusions acknowledged:

(1) It’s an average — while we get some breakdown on age brackets, we know nothing about their incomes, where they live, their health, etc. What someone needs (or thinks they need) living in New York City is (or should be) considerably different from the projections of someone living in Dubuque, Iowa.   

(2) It’s based on what people “think” (who have probably not given this any real thought).

(3) It’s surveying completely different groups of people a year apart, so drawing a trendline is a predictable, but dubious reality.

Let’s face it, stories like this serve mostly to fuel the concerns that responsible human beings already have as they try to look ahead to future decades in a time of tremendous uncertainty.

If they weren’t nervous before they saw these headlines, they surely are afterwards. 

Next week: The rest of the list — and what you can do about it/them.

• Nevin E. Adams, JD