Nevin's Data "Points"

  “Sure, it will probably be more work, and generate fewer clicks,” commented one industry source, “but it’s the right thing to do.” Yes, after years of relying on uninformed “guesses” from individuals ignorant of their financial needs and situation, the retirement industry, major media outlets, and a large number of academics have made a commitment to focus on actual data, rather than hypothetical extrapolations from incomplete datasets. Another explained, “we always thought that exaggerating the depth of the retirement crisis would encourage people to save more — but that turns out not to be the case.” Those projections affixed labels like “ magic ” to those extrapolated numbers based on surveys of uninformed workers, which not only ignored real differences in incomes, location and age, but were typically also averaged to further obscure accurate results. Likely fueled by previous reports of needed retirement savings,  surveys of individuals routinely exaggerated  the r...

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 ...