Four Keys To Retirement Security

A hand drops a coin into a jar labeled "Retirement" filled with coins. An old-fashioned alarm clock and stacks of coins sit next to the jar on a table, with a blurred green background.

“They went to work every day and built a life for themselves, put money away in a savings plan and paid their taxes. And then they got divorced or hurt on the job or sick or widowed or just plain unlucky — and found themselves in the same boat as millions of Americans who are now approaching retirement with most of the financial props knocked out from under them.”

So begins a recent Washington Post article decrying America’s “broken retirement system.” It’s easy to empathize with the individuals profiled in the story. The author documents several well-known financial pitfalls, and draws an obvious conclusion: divorce, uninsured illness, job insecurity, and just plain bad luck can easily wreak havoc with personal finances, and especially with retirement plans.

But do these stories represent a truly balanced view of our retirement security prospects in the US? After all, we’ve known about such risks to financial security for a long time. Are the dreary outcomes depicted in the article inevitable? Or are there steps we can all take to prevent – or at least lessen the impact of – such financial risks over the course of our lives?

I believe there are. Yes, we will all face our share of bad luck and make a few bad financial decisions. That said, by paying attention to just four key factors we can significantly increase our chances of a secure retirement, come what may. Here are the four key lessons about personal financial management that I believe we can learn from these stories.

First: Be Proactive About Managing Your Job or Career

Having enough money to retire securely begins with the ability to earn it in the first place. We therefore need to re-examine our expectations regarding job choices and retirement income. Just because some members of the WWII generation got jobs that offered lifetime job security and retirement income (i.e., company pensions) doesn’t mean that we can expect this to be the norm for our current economy. Not only was the US economy post WWII unique in many ways, subsequent generations have largely rejected being tied to a single job or company anyway. Instead, they opted for choice, career enjoyment, and flexibility:

“[Ours] was perhaps the first generation to start thinking that we didn’t want to just get jobs to plug in to get our pensions and to, you know, to be a–holes when we were 70 and beat up our kids and then retire and go to Hawaii or something,” he said.We were a people who said we kind of like to have job satisfaction up front. And so we didn’t think about the long run of things. To not be thinking about the future, to be more of a Zen thing, you know we live today. And it wasn’t pure hedonism. There was some purity. And we’re still very much that way. I would rather be happy today than miserable 25 years from now. And so I made choices based on that rather than on the economics, which, you know, one could argue fairly successfully that I made some pretty stupid decisions.”

That’s the rub, of course. If you expect to make decisions about the kind of job or career you want to pursue, then it is also up to you to think about the trade-offs you are making. Ultimately, you are the architect of your own financial and life choices: trading off current benefits for future benefits, weighing the importance of job satisfaction versus financial security, and many others. The good news is that you do have choices. Don’t forget that for most of recorded history most individual human beings had minimal or no choice at all regarding their lives and livelihoods. The drawback to our current flexibility, however, is that many of us fail to clearly understand the trade-offs that we are making, and their long-term consequences.

Knowing that you are making explicit trade-offs makes it possible for you to choose mindfully. You can begin by asking yourself the following questions:

  • Will your job exist in 10 years, in 20 years?
  • How can you prepare to make changes that are inevitable, or at least likely?
  • What will you do if you’re laid off when you’re 50? Do you have a Plan B?
  • How do you want to balance job satisfaction and compensation? If you want to prioritize job satisfaction over compensation at all costs, what adjustments will you need to make in your life to accommodate this choice?

Second: Know How Much You Really Need to Afford the Life You Want

The Washington Post article quotes findings from a study at Stanford University that baby boomers have, in real terms, about 20 percent less in savings, 20 percent lower household wealth, and 100 percent more debt than the generation born during World War II.

Many of us have simply failed to save enough. There are many reasons for this, but among them personal preference is certainly foremost. We have gotten into the habit of assuming that we ‘deserve’ what we think of as middle-class perks and pleasures without admitting that we may not be able to sustain those expenses over the long term. We haven’t bothered to do the calculations that can show us what it will really take to afford the lifestyle we want over the long term – and then to save appropriately.

Yet saving is largely under our control. Here are questions that you should ask yourself:

  • What lifestyle can you really ‘afford’?
  • Are you maxing out contributions to your 401(k)?
  • Are you saving money outside of designated ‘retirement accounts’ in order to meet your retirement savings goals?
  • Have you adjusted your current lifestyle expenses so you can afford to save financial windfalls rather than squander the opportunity to strengthen your financial security?
  • Are you willing to adjust or delay some of what you want to instead build long-term financial security?

Third: Build a Strategic Reserve – a Buffer – Against Financial Distress

It’s a familiar story: someone is getting by ‘just fine’ until they lose a job or are faced with a large medical bill. Such events come at unexpected times, yet we know that they do happen. So it is possible to prepare for them, regardless of timing.

Here are the key issues you should consider:

  • Do you have an ‘emergency fund’ of ready cash? Having access to such ready cash under ‘predictably unpredictable’ circumstances is crucial to surviving them.
  • Have you done the best you can to create other ‘buffers’ in your life against financial adversity? This includes the right insurance but is not limited to it.

Finally: If You Suffer a Financial Setback, Be Willing to Adjust Other Parts of Your Life To Get Back on Track

Bad luck can throw the best-laid plans into a tailspin. Divorce is a common example. If a tough situation does occur, the key to surviving it is a willingness to re-work your financial plan in order to bring things back into balance. This is as much a psychological challenge as it is a financial one. Changing a lifestyle can signify failure or loss of identity to many of us. Yet trying to maintain a certain lifestyle when our resources can no longer support that lifestyle is a sure way to financial ruin.

Be willing to face the following issues:

  • How have current circumstances (job loss, divorce, economic conditions) impacted your short- and long-term resources?
  • What modifications in your own behavior will be required to successfully navigate the change?
  • How does the prospect of these changes make you feel? Are you prepared to re-think personal goals and assumptions in order to ‘make the numbers work?’

If you apply these principles over your lifetime, you are highly likely to build a much more robust and sustainable financial future for yourself than the individuals described in our article. It’s really up to you.

Image by Cozine on Shutterstock

* * *

Subscribe and get more posts like this

"*" indicates required fields

Sign up:
This field is for validation purposes and should be left unchanged.

You can unsubscribe anytime


Leave a Comment

What can we help you find?

A multicolored pie chart with several segments of varying sizes, including prominent red, yellow, and pink sections. The chart is displayed on a light gray background. No labels or data values are visible.

Griffin Black Portal

  • Investment Reporting
  • Meeting Notes
  • Account Statements
  • Single Signon to eMoney
  • Billing Statements
  • Document Sharing
  • Tax Statements (1099s, etc)
A laptop screen displaying a financial management dashboard with account balances, net worth, investment details, and financial goals for users named James and Stephanie Chaplin.

emX / eMoney

  • Financial Planning Tool
  • Account Aggregator
  • Budgeting & Spending
Logo of NetXInvestor featuring the text "NETX" in gray and "INVESTOR" in orange, with a stylized arch above the text.


  • e-Delivery – Going Paperless
  • Tax Documents (1099, 1099R, etc.)
  • Account Statements
  • Pershing Communications