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Joe Nocera is a bright guy. Over the course of a lengthy career, the former Fortune executive editor has won numerous awards for excellence in business journalism and recently co-authored a penetrating analysis of the financial crisis (All the Devils Are Here: The Hidden History of the Financial Crisis). He now hangs his hat at the New York Times, covering a wide range of business-related topics.
Mr. Nocera also stands out for his willingness to discuss the sorry state of his personal finances, a startling admission for a world-class financial journalist. With his sixtieth birthday approaching, he recently revealed to readers that his 401(k) is "in tatters." Some of the culprits are familiar: A concentrated strategy during the technology boom put a big dent in his portfolio, and a divorce several years later inflicted similar damage. A third source of difficulty is harder to fathom - the decision to raid his 401(k) to fund a home remodeling project. Such behavior strikes us as the sort of short-term thinking journalists are so quick to condemn in the executive suite. Mr. Nocera acknowledges that good financial advisors provide sound advice regarding discipline and diversification, but he doesn't appear to have consulted one.
Mr. Nocera found a sympathetic ear in Teresa Ghilarducci, a behavioral economist at The New School. She was not the least bit surprised by his experience - most humans, in her view, have neither the skill nor the emotional stability to be successful investors. The data from the Employee Benefit Research Institute support her contention. A stunning 60% of workers 55 or older have less than $100,000 in a retirement account. When asked what the retirement plan was for these workers, Ghilarducci responded "Their retirement plan is faith based... They have faith that it will somehow work out."
This is a scary proposition especially given the future instability of the federal entitlement systems. Don't let your story sound the same. A few simple, smart disciplines applied for a working lifetime can put you miles ahead of the average retirement age worker. Talk to us to see if your retirement plan is on track.
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