There is a lot of shame around money. Almost everyone feels like they don’t have enough of it, which can lead to a spiral of negative thoughts. “If I were a better person,” you can find yourself thinking, “I would earn more. Owe less. Be able to provide better for my family. Have what I see others have. Understand how I’m supposed to be doing this money/spending/saving/investing thing better.”
Feelings of shame, of inadequacy, of guilt–these feelings make it even harder to dig out of whatever financial hole you may be in. They also get in the way of our analytical brain and can put us into a negative behavioral spiral as well, spending money, feeling bad about it, then spending more money in an attempt to make ourselves feel better.
I spent my entire career helping people invest for retirement. But the biggest challenge to having enough money in retirement isn’t the investment side of the equation, though that can be complicated. The biggest challenge is actually helping people save enough.
The statistics speak for themselves: 80% of Americans are not saving enough to be on track to replace 80% of their pre-retirement income (when their 401(k)s or IRAs are combined with Social Security). I know this firsthand because for most of my 20s and 30s, and even early 40s, I was one of them. I don’t know if it’s ironic, poetic, or both. Still it was my own struggles with saving that helped drive the research into, and then the design of, the award-winning target date funds my team and I created. And despite huge progress over the past 15 years in automation–signing workers up for 401(k) plans and automatically increasing what they are saving–most workers are still struggling to save.
When I decided to retire from JPMorgan four years ago, there were two things I knew I had to do. The first was to take some time to myself and do a long pilgrimage walk. The second was to write a book about saving and investing for retirement. It took me a number of false starts for me to figure out that I wanted to focus on Gen Z and millennials for my audience. Between the rapidly evolving economy and the role of the internet and social media, the deck is stacked more heavily against them than it was for the boomers. But they have the single most important part of the retirement equation on their side: time.
I wrote this book to help readers understand how they can take advantage of time and the magic of compound returns, something that seems abstract until you’ve had the luxury of watching your money grow over decades. It’s hard for a 30-year-old, who has only seen market volatility in their life, to believe that their money will double every decade if they earn an average return of 7%.
I also wrote it to help them understand more about why they struggle with saving so that they can let go of some of the shame, guilt and fear they may be feeling. The book is full of fairly simple techniques–hacks–that they can use to simplify saving and investing. For instance, it’s tough to deny yourself a purchase in the moment, but it’s easy to save money if it goes straight into a savings account before you ever see it.
Above all, I wanted to make sure that my readers stopped having that terrible feeling in the pit of their stomachs–the one they get when they look at their bank balance and wonder how they’re going to make it through the month.
I want my readers to have choices as they move through their working life, choices that I had recently when I could afford to step away from my career. Once I stopped working full-time, I was finally able to give my book the time it needed. I was also able to do something I’d dreamed of for years–take on the Via Francigena, a pilgrimage trail from Canterbury, England, to Rome. I walked half of it, a total of 500 miles of it. Neither the book nor the trip would have been possible if I hadn’t finally figured out how to get my financial act together.
There are so many reasons to feel anxious about the future. Climate change, war, pandemics, political polarization–there is no end to the list of problems that make millennials and Gen Zers the most anxious generations ever. Many of these problems feel like they can’t be solved. But saving for retirement isn’t one of them.
Learn more about Anne Lester’s book Your Best Financial Life
