When it comes to understanding money, or most any type of financial planning or retirement mechanism for that matter, I'm about as useless as a third-grader with an Xbox and all the free time in the world. This comes as a surprise to a lot of people who know me because, for many years, I got paid handsomely to investigate the finances of some of the biggest companies in the world, as well as the officers and managers who ran them.
My wife Joan—whose IQ, unlike mine, approaches genius level—isn't any smarter than me. Not about personal finance, she isn't. I know more about our retirement savings and prospects for the future than she does and, like I just said, I know only slightly more than jack shit.
This is a problem at our age. A big one. When you're entering your sixties, you're supposed to know where you stand on this kind of thing. I'm not saying you have to be all set up and ready to retire comfortably today, just that you should have a plan in place that you've been following for some time—preferably one that's on track, or at least close to it.
It's not good enough just to know the balance in your savings and retirement accounts; even that Xbox-crazed third-grader can read a number at the bottom of a balance sheet. Knowing what that number really means—grasping the endless array of factors that will impact its value and effectiveness going forward—is way, way, way more important.
And yet, here I am. Dumb as all get-out and hoping—no, praying—that the numbers are going to pan out fine. Our house is almost paid for, there are IRAs invested in mutual funds and such, and though we may dream extravagantly it is rare that we actually act that way. Everything will just have to work itself out in the end.
You see, I'm no expert, but I can read. And when I accompany Joan to her quarterly examination by a renowned eye specialist outside of Boston, I get to read plenty. The guy is super thorough and always overbooked, so spending two or three hours in his waiting room while Joan and the others get examined isn't at all uncommon. The magazines on his shelves basically go three ways: celebrity news and gossip, food and wine, and personal finance. Joan tends toward the former category, I the latter, while we both dabble occasionally in the middle, especially when the visit is extraordinarily long.
I spent around ninety minutes reading the guy's personal finance rags just the other day. Several of the articles were about retirement planning and most weren't the least bit encouraging—at least, not to me. Don't worry, I'm not going to bore you with all of the statistics they threw out but I will pass along just a few general survey findings of one of the studies:
* Just 28 percent of baby boomers say they understand retirement investing
* Only11 percent of boomers with less than $100,000 say that they understand it
* Two in 5 boomers have saved less than $250,000 for retirement
* 20 percent of boomers have zero retirement savings
Oddly, I found myself almost calmed by these very troubling statistics. It's like finding out that you're not alone, and that most of us are in the same boat together, no matter how much water it's taking on.
It's funny how that works. Safety in numbers and all. I used to feel the same way when I smoked cigarettes and was surrounded by other smokers. It's like, we're all still here and seemingly healthy and I don't see anybody dying of cancer right at this moment, which must mean that we're all going to be OK. There's this bizarre comfort you get in huddling together in blissful ignorance, no matter what the situation—or reality.
I'll be honest, I still feel just a tad comforted by the fact that Joan and I aren't alone in our ignorance. I know that sounds crazy; believe me, I do. But it's too scary to admit that we might not be OK, and I don't have the intellectual capacity to take on the big financial issues that we face—because I simply don't understand them. And I doubt that I ever will.
Several years ago, we took a friend's advice and got a financial planner who could finally move our money out of the local bank and into investments like mutual funds. He's a good guy, and I trust him not to fleece us, which he's never come close to doing. Overall, I guess he's done an OK job, because instead of losing all our money, we've made some. But when he opens his mouth and talks about bond yields and inflation and all that stuff, I don't understand a word that he's saying. Neither does Joan.
All we want the guy to tell us is that we're going to be OK and that our future doesn't include living in an empty refrigerator box underneath the BQE. He says he's pretty sure that we don't have to worry about that.
I just don't fully understand why that is.