Failure(s) to Communicate

There’s an oft-repeated line from that 1967 classic movie “Cool Hand Luke” about a “failure to communicate.”

Now, most of us aren’t trying to convey the consequences of violating prison rules, but there are messages where mere words sometimes fall short of their purpose. There are literal barriers in terms of language, of course—but all too often also barriers built of different life experiences, of cultural references, and certainly of age. Indeed, we frequently use words, or employ metaphors to enhance, or at least provide some flavor to our explanations/instructions—only to have it fall on ears that may hear the words, but lack—or in some cases, confuse—the necessary context (I’m routinely forced to reference the Urban Dictionary to make sure certain words haven’t taken on an unintended meaning).   

Mind ‘Set’

In that spirit, several years back I stumbled across something called the Beloit College Mindset List (a couple of years back it “moved” and was rebranded as the Marist Mindset List). It was a list developed to help college faculty be aware of dated references—to help assure better communications with the incoming class of college freshman. In fact, the focus of the list (and it dates back to 1998) was to provide some perspective on the shifting generational perspectives—the mindset, if you will—of individuals just entering college.

I remember fondly the “can you believe it?” water cooler chats about some of the items on previous lists—kids entering college that had never actually seen a floppy disk (which, ironically, lives on in that “save” icon in Microsoft applications), who might have wondered what “cc” actually stands for in their email (because they have never actually had to deal with a “carbon copy”), who never had to dial a rotary phone, who might never have seen (much less used) a payphone, who never knew a world without the “world wide web” (much less a world in which you could connect to it—wirelessly)—and perhaps most notably of late, weren’t even alive on 9/11. Yes, we’re talking about a generation who can’t fully appreciate just how weird it seems to see people having video calls on their wristwatches—just like Dick Tracy did in comics of old (talk about your dated references!).  

Class of 2027

But, according to this year’s Marist Mindset List,[1] the Class of 2027:

• Are just as likely to be listening to Led Zeppelin as Lana del Rey or Lil’ Baby on their phones (with access to music services like Pandora launched in 2005, the year many of these future graduates were born).
• Will get their news primarily from social media sites like YouTube, Instagram and TikTok (Dan Rather & Ted Koppel both retired in 2005, “effectively ending the reign of network news programs as the primary way younger Americans get their news”).
• Have always lived in a world visibly affected by climate change (harkening back to Hurricane Katrina and Rita—though they wouldn’t be old enough to remember either).
• Will almost exclusively watch their video content on YouTube (which launched in 2005) and similar sites online.
• Will be the first to fully integrate ChatGPT or “Generative Pre-trained Transformer” into their college learning experience (one can’t help but see “fully integrate” as a disarming euphemism for more insidious applications).
• Often quote the TV show “The Office,” although the program ended its run in 2013. The characters are omnipresent in today's college culture and the show is now a cultural phenomenon thanks to its rebirth via Netflix and short-form streaming services (OK—I don’t get the fixation on The Office, either. But who am I to question generational fixations?)
  

Retirement (Re)Set

That said, for those of us who will be working (or living) with the Class of 2027 (once they graduate, if not sooner), well, for them (and those working with them), it might be good to keep in mind:

• There have always been 401(k)s (even if everyone hasn’t had access to them at work).
• They may never have to actually sign up for their 401(k) (thanks to automatic enrollment).
• They may never have had to think about the investments in their 401(k) (due to QDIA/target-date fund defaults).
• There has always been a Roth option available to them, whether 401(k), 403(b) or IRA (and, considering what future tax rates are likely to be, they should take advantage).
• They’ve always been able to view and transfer their balances online and on a daily basis (and so, of course, they mostly won’t).
• They’ve always worried that Social Security wouldn’t be available to pay benefits. (In that, they’re much like their parents at their age…even today).

But perhaps most importantly, they’ll have the advantage of time, a full career to save and build, to save at higher rates, and to invest more efficiently and effectively—and, with luck, access to a trusted advisor to answer their questions along the way...

  - Nevin E. Adams, JD

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[1] Sadly, this year’s list isn’t quite as much “fun” as previous lists have been (at least not to this Boomer)—and this year it comes with some political “commentary” that seems unnecessary (at least to this Boomer). The Marist crowd appears to take themselves more seriously than the Beloit College founders did (or perhaps it’s just the times we’re in).

Attention Getters

I was recently taken to task for last week’s column about retirement savings regrets.

More precisely, my column about the regrets expressed in a recent American Century survey drew the attention of Faith Teope in a LinkedIn post titled, “Dear Finance Experts: We Would Listen, But We Don't Care.” In fairness, it wasn’t so much my column (“boring but true”), or even the American Century survey’s findings that came in for criticism, but more the head-scratching that the survey set off among financial professionals (including, I suppose this one) as to why people aren’t paying more attention to things like… saving for retirement. Her premise—that we’re using language that doesn’t resonate with those we hope to motivate—is, frankly, unassailable. 

In fact, it’s a topic I broached (at least at a high level) earlier this year in a post titled, “Is it Time to Retire Retirement?” As I noted then, for all but the most financially astute, trading off a here-and-now need (or want) for some obscure future notion like “retirement” is a hard sell. And, let’s face it, the further you are from that future event, the harder it is to “sell.” 

But arguably the problem runs deeper than the label(s) we affix to the concept of the ultimate goal. Let’s face it, financial freedom is a laudable, evergreen objective—but for most of us it’s not a short-term goal—and without a “how” to go with the “what,” it might not matter. 

In her post, Faith states that our current messaging is “…not working because that’s not how humans are wired. We are wired to survive and that drives the urges for happiness, the desire to live, to buy, to bucket-list, to binge-watch, to prime-delivery. We are not wired to plan for an unknown future with an unknown time frame and no magic 8-ball to what will even happen tomorrow much less 25+ years from now.”

To her credit, she put forth some suggestions, conversation starters of a sort—something that ostensibly might motivate people to “care”—things like:

• The Life You Want—Top 5 questions to help you take control of your life
• 3 Ways to Legally Pay Less in Taxes
• The One Debt That Pays YOU interest—401k loans and a few perfect reasons to tap into them

Now, as someone who spends a good part of his day crafting (what he thinks are) compelling headlines and (obsessively) tracking clicks, that approach has some allure. (I mean, who wouldn’t want to know how to legally pay less in taxes?) That said, it’s not clear to me how much of this kind of thing is already out there, though I imagine in a world increasingly reliant on TikTok, Instagram, Twitter and YouTube to communicate complex (and sometimes farcical) messages, it’s a burgeoning field—or should be. 

Indeed, the more I considered the subject, the more it occurred to me that the essence of some pretty compelling messages are already imbedded (obscured?) in most of today’s benefit communications. Wouldn’t you be intrigued by the following topics?

• How to get the free money you’re missing out on
• Turn $5 a month into $50,000
• You can get a pay increase without asking for it

There are some potential shortfalls, of course—there’s often a fine line between making complex things simpler and making them overly simplistic. But when all is said and done, to me, it’s not so much about simplifying our messages (though there’s that), but about getting people’s attention. But as I look at the bullets above, they strike me as short, near-term in focus, snappy, and ultimately action-oriented. Clickbait? Sure—but if you can get people’s attention, even for a minute, that’s an opportunity, a door-opener… a start… 

Of course, “starts” notwithstanding,[i] what matters isn’t just getting people’s attention, but motivating action—anything from a quick readiness assessment to taking steps to automatically increase their rate of contribution, or to make sure they are contributing at a rate sufficient to receive the full company match.

In sum, it’s one thing to get people’s attention—but then we have to keep it. 

- Nevin E. Adams, JD

[i] And thanks to automatic enrollment and qualified default investment alternatives (like target-date funds), millions of American workers have gotten a good start at saving and investing for retirement even if they don’t always appreciate it.