Saving for retirement, affordability or priority

September 24, 2013
Gordon Mullin

Gordon Mullin


Often when I’m meeting a new client, I ask about whether they have any sort of savings plan in place. Perhaps, I inquire, they could be saving for a home, a new car, further schooling or their own retirement. When the answer is, “no, I can’t afford it,” then I may say, “you know, it’s never a question of affordability, it’s only a question of priority.”

Then, I’ll get one of two responses. They’ll say “yes, you’re right” nodding their head acknowledging the wisdom of my words or, the conversation will take a different turn, at times not a warm and toasty one. Sometimes their defenses arise and there will be an uncomfortable moment and they will cite the other expenses they just had to pay.

I know this topic of saving is crammed with potential discomfort for all of us. Me too. I put off saving for my retirement and it’s my own fault. And, in my experience, too many of us don’t.

Consider the following: Despite the fact we’re living in the richest place on the planet in the wealthiest time in all history, we have one of the lowest savings rates in the world. How odd. You’d think that it would be the wealthiest societies that save, and the poor who spend all they have but no, it’s just the reverse. Savings rates, as a percent of income, are highest not in north American and Europe, but in the third world countries.

Why is it that way? We all can cite the various influences in our lives which lead us to spend, spend, spend advertising, the media, our urge to keep up with the Jones, our neighbors new Lexus, etc.

And definitely, without doubt, buying new clothes or electronic gadgets and eating out in a fancy restaurant that serves its own award winning wine brings us much pleasure. We like it. It makes us feel good.

At the same time, for us working folks, somewhere in the back of our heads there’s this grandfatherly advice rattling about- “you better save up some money for your retirement. It’ll be here all too soon.” And as we get older, moving through our 30’s, 40’s and on into our 50’s that voice gets louder and louder and we say to ourselves with greater frequency, “damn, I wish I would have started saving sooner.”

And all this is normal for us here in North America. It’s what most of us do. We put off that effort of saving till some later date.

But as we all recognize, life spans are lengthening and if you’re under 60 today there’s a fairly good chance that you’ll spend one-half of your adult life not working, if you can afford it.

This has never happened before in history and in my view, our culture, our mindset, our society has not yet grasped the need to accept and deal with this new reality. We’ve lost that inner compulsion to save for a rainy day that our great grandparents accepted as normal.

Unless you’re fortunate enough to work for some level of government or a really big company which can afford to offer up a generous defined benefit plan, of which there are fewer every year, you’re stuck having to plan for your own retirement. You’ll have to save up enough to take you through, possibly, 30 years or alternatively you can plan on living off whatever meager sum will be left in the Social Security plan. Or, of course, just continue to work. Not a bad alternative for some of us, me included.

But for many, our challenge is to discipline ourselves to just say no to that extra pair of shoes, go one notch down when buying a car and save that dollar.

I know. It’s hard, saying no to yourself. But I often ask my clients to imagine sitting next to themselves, but that other imaginary self is 30 years older than you are now. And you ask them, “should I save more for my retirement?” And just what will be the answer given by your older self? Without exception, the answer is always yes.

But you’ll say, “I can’t afford it!”

And your elder self will perhaps say, “It’s never a question of affordability, it’s only a question of priority.”

Gordon Mullin is a local financial planner. If you’d like to talk about this or any other aspect of financial planning, give us a call at (805) 592-2220, visit our website or send an email via

Securities and advisory services offered through National Planning Corporation (NPC), Member FINRA/SIPC, a Registered Investment Adviser. Zuk Financial Group and NPC are separate and unrelated companies.


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I think one reason, if not the biggest, that the current generation are not savers is that our society is well on it’s way to being a govt dependent society. Add to that the declining sense of self responsibility and the “get every free thing that I can” mentality, and it is easy to understand the low savings level. Why save? And for what? The govt will take of me, why should I?

And of course, the artificial suppression of interest rates does not help.

It may be one reason (and probably the biggest for some people) but I think that a bigger reason overall is the effectiveness of modern advertising in convincing people that they really need things that are, in reality, luxuries.

If modern advertising wasn’t so effective, I think we would also have a better government. It has been proven over the past few decades that one can’t win election from a large population base (i.e. national office, most state governorships and some large city mayors) without expensive media messaging to drive a message into the subconscious of a large number of voters. That costs money and the groups/individuals that provide it expect a return on their investment — often outside the bounds of ethical behavior.

The techniques used in selling politicians and political views were perfected in the marketplace. Many existed before mass media but were limited to person-to-person communication which is not nearly as extensive without broadcast media. The scale of mass media influence gave all the incentive needed for advertisers to spend large amounts of time and money on perfecting their pitches. They did so and it paid off. Otherwise people wouldn’t waste money on things like multiple blades on a razor or the latest model smart phone when the improvement over older models is only detectable due to advertising.

The only way to save in these times is to have the savings automatically going somewhere out of you paycheck before you see it. A tax deferred plan is great, and the ultimate—which I never had in 39 years of working, would have been tax deferred with an employer match. It’s a whole lot easier to save if you never see it.

You have just suggested more of the problem. The way to save for your future is to have personal integrity and responsibility. Not to have the govt manage it for you and it is certainly not your employer’s responsibility to subsidize your savings. Geesh!

Apparently you’ve never participated in an IRA or 401(k). These retirement plans were introduced in the 70’s as a substitute for traditional pensions. The goobermint doesn’t manage the plan for you. You make the choice of investments into which your money is placed, and the resulting profit or loss is your responsibility. The employer match is a fringe benefit just like any other benefit offered through your job.

Nicely written. I might add that the retired and broke folks didn’t plan to fail, they failed to plan.