based on Elizabeth White TED Talk
Despite holding graduate degrees from Harvard Business School and Johns Hopkins as well as impressive career credentials, 55-year-old Elizabeth White is barely making ends meet. In this moving TED Talk, White breaks the taboo on talking about financial insecurity among middle-class Americans nearing retirement age. White and her generation are pioneers – the first to explore the uncharted territory of the retirement crisis.
Elizabeth White is fed up with pretending to be able to afford the middle-class lifestyle she once led. The Harvard Business School graduate struggles with finding steady work, and, at age 55, she is at a loss as to how to finance her retirement.
White decided to speak out about her precarious financial situation because she knows she isn’t alone. Almost half of all Americans don’t have enough cash tucked away to cover an emergency expense of $400. Most American households either have no retirement savings or have saved up too little to cover even a fraction of their monthly expenses at retirement. Baby boomers take a lot of flak for poor financial choices. While White’s savings record isn’t spotless, “millions of boomer-age Americans did not land here because of too many trips to Starbucks.”
Stagnating and falling wages, combined with skyrocketing costs for housing, health care and education, have made setting aside voluntarily contributions to the 401(k) plans that have replaced traditional company pensions difficult. Meanwhile, retirees won’t be able to rely solely on Social Security, a relic from 1935, when life expectancy was much lower than it is today. The United States has reached a retirement income deficit of $7.7 trillion, and Americans need to start a public debate on how to address the crisis.
“We live in a world where success is defined by income. When you say that you have money problems, you’re announcing pretty much that you’re a loser.”An Honest Look at the Personal Financial Crisis by Elizabeth White
Although long-term solutions will require changes at the institutional and policy-making levels, individuals today can take several proactive measures to stay afloat financially and start saving. Slash your household expenditures by redefining your priorities. “Small up” by identifying the things that make you happiest and investing in those only. Stop waiting for that perfect job opportunity.
Instead, find “bridgework” that may well be beneath your qualifications, but that will pay the bills until you find more fulfilling work. Be pragmatic: If you need to move in with a relative, sublet a room or accept food stamps, do so. Find others who share your predicament and form a local “resilience circle” to exchange experiences and information and to find ways of addressing the “retirement crisis” at the macro level. Ultimately, the retirement crisis didn’t result from baby boomers’ poor spending and saving habits but from the failure of public and private institutions to adjust to rising life expectancies. Solving the crisis requires fresh ideas on how public services and infrastructure can accommodate an ageing population and allow it to live in dignity.
It is definitely scary, hence, please prepare for your retirement. Start by reading the following book’s summary and reading notes: