Author: Chad

This article originally appeared on Marketwatch

The extended U.S. government shutdown that occurred earlier this year shined an unflattering spotlight on our country’s financial preparedness.

It revealed that many people who wouldn’t typically be considered impoverished are still clearly living paycheck to paycheck. This certainly doesn’t bode well for them saving enough money to be financially independent in retirement.

Now, more than ever, retirement is built on personal savings and it’s up to the individual — not the government or employers — to make that dream a reality. The notion of working your entire life while simultaneously stashing away money for your future is something I frequently refer to as, “the great retirement experiment.” Let’s take a look at how we got here.

How our modern retirement system came to be

Before the 20th century, our country’s economy was based almost entirely on agriculture. Americans didn’t have hopes or dreams about retirement in the 1700s, 1800s or even early 1900s. They simply worked until they no longer could, and hoped that their families would take care of them in old age.

The retirement system that we know of today didn’t come into existence until after World War II. Following the war, companies hired people in droves and provided pensions. At the time, this was the best concept available for retirement security and many people from this generation benefited. My grandparents, for example, retired with a full pension and my father retired with a partial pension. As time went on, however, companies realized funding these programs entailed a lot of complexity and decided to freeze pensions or stop offering them altogether.

In the late 1970s, the government recognized these resources wouldn’t sufficiently support people through their retirement years, so it implemented tax-deferred savings accounts and the 401(k) was born shortly thereafter in the early 1980s.

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The broken three-legged stool of retirement

Over many decades, we have come to think of retirement as a three-legged stool consisting of Social Security, a pension and personal savings, all working together to fund your retirement. Today, the three-legged stool looks more like a pogo stick.

Social Security, the first leg, is projected to have a reduction in benefits by 2034, if no changes are made today. This program was introduced in 1935 and originally designed to help those in dire need of financial assistance. It was never intended to be relied on as heavily as it is today as a primary means of retirement income.

Personal pensions, the second leg, have recently seen a staggering, swift disappearance. This chart, provided by CNN Business with data from Pension Benefit Guaranty Corporation, depicts the shrinking population of workers covered by company pensions. Today, the majority of workers don’t expect to see a pension unless they’re unionized or government employees.


With pensions nearly extinct and Social Security looking less and less reliable as a means of income, the onus is now largely on individual citizens to save enough money during their lifetimes for retirement, serving as the vital “pogo stick” leg of the stool. Realistically speaking, can people bear that burden?

This is why we call it the great retirement experiment. Although the outcome is unknown, it must be brought to light.

The challenge is that not everyone takes a diligent and responsible approach to saving for retirement on their own, nor should they be expected to. We have asked everyday people to become both financial and investment experts, which ultimately may set them up for failure. Not to mention, people are now living longer than ever before and working later in life to fund retirement or catch up on lost savings.

How defaulting to Social Security could change it all

So, how can we solve the issue of underfunded retirements? While there is no surefire solution, I believe a significant adjustment to our Social Security system could alleviate much of the burden currently placed on everyday Americans.

Let’s keep Social Security as we know it today, the same. However, let’s augment the required Social Security savings from both the employer and the employee by doubling the amount saved, which would add an additional 12.4% (6.2% employer contribution, 6.2% personal contribution, doubling it would increase it to 24.8%) of income contributed to retirement. This could be credited into an account that is in the individual’s name so they have complete control over the investments, but won’t be able to access to the funds until normal retirement age.

Retirement accounts like 401(k)s and IRAs would still be in play, just not as the main source of income. This also solves the portability issues with retirement accounts. If the Social Security account is already under an individual’s ownership, it doesn’t matter how often you change jobs.

Bottom line, our retirement system is not as good as it gets. Savers must be aware of the flaws in the existing retirement savings experiment as well as the great responsibility of saving for their own future.

The looming retirement crisis is a term that sounds ominous – and it is. Millions of Americans dream of a retirement that includes their hobbies and loved ones. Unfortunately, the harsh reality is that many of those dreamers will never actually get to retire because of a seriously inadequate nest egg that is supposed to sustain them through their twilight years.

America needs to wake up and realize we have a serious problem on our hands. It’s not an abstract one, but rather an issue that has specific origins. We have no chance of reversing the problem without figuring out how we got to this point and what we need to do to prevent the looming retirement crisis.

Here are the main obstacles we face:

1. Coverage

Study after study has shown the easiest and most effective way for people to save for retirement is through an employer-sponsored retirement plan, whether it’s a 401k, IRA or another vehicle.

Over 40 million employees – especially those working at small businesses, don’t have access to a work-sponsored retirement savings plan.

Our solution? Mandated retirement savings plans. State governments are getting involved in this solution, but more needs to be done so that all workers have the opportunity to save at work.

2. Participation rates

Even among employees with the opportunity to save at work, there is an alarmingly low participation rate of only 52 percent, according to the Bureau of Labor Statistics. The retirement industry and government need to find a way to get people to utilize their plans and save money for their future. When employees have to opt for a plan, many wrongfully assume they need the money more now than they will later.

Our solution? Auto-enrollment. Research indicates that when people are auto-enrolled in a retirement plan, they stick with it after seeing how easy it is to use and its benefits.



3. Saving enough

In an earlier post, we discussed the new reality of retirement savings sources: Pensions are basically extinct, and Social Security is unstable. That means you alone are responsible for saving enough to last you through retirement.

The problem is that most people’s nest eggs are underfunded. According to the Employee Benefit Research Institute, 57 percent of workers report that the total value of their family’s savings and investments is less than $25,000 (this figure does not include the equity in their home or a defined benefit plan). Of that group, 28 percent of people have less than $1,000 saved.

Our solution? Auto-increasing savings amounts. For workers enrolled in a defined contribution plan, it is difficult to remember to keep increasing their deferral rate; plus, many people second-guess the decision as they believe they need the money more now than they will later. By auto-escalating deferral rates, we can help people save more without putting the burden on them to elect to save more.

4. Investing appropriately

Investment selection and portfolio allocation both seem to trip up savers very frequently – and with good reason. After all, most people don’t have expertise in the markets, and yet their future ultimately depends on these very complicated concepts and products.

It’s no surprise we are concerned that people are not investing appropriately for their age, risk tolerance or current market conditions. How can you know what is considered appropriate for you when you’re tasked with doing this on your own?

Our solution? Cost-effective professional advice. When there is a plumbing issue in your house, you call a professional plumber. It’s that same logic that should encourage the retirement industry and employers to offer professional resources to assist savers with their investment selection and ensure its suitability for their unique situation and goals.

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FinTech, or financial technology, is receiving loads of attention, but there is still a great deal of confusion over what it is and what it means—especially as it applies to retirement. Let’s try to clarify this.

We’ve all been incredibly frustrated by the fallout from the financial crisis, regardless of which generation we hail from. Retirement plans and every single financial, legacy-laden organization out there still include a ton of nest egg-sucking fees hiding in their fine print. FinTech cuts against this, ushering in the age of transparency. The traditional financial institution, from banks to retirement, is being crowd-transformed – by the people – for the people.

This includes a financial humanization overhaul. A vast portion of people—women and minorities for example—will now be included in this conversation from which they’ve previously been excluded.

Questions to ask

In this respect, advisers and employers have to ask themselves what financial providers are they working with and what do they stand for? Are they part of the financial literacy revolution? Do they offer fee transparency? Or are they part of the legacy problem? Remember—employers hoping to attract and retain talent these days, must align with what candidates and employees are looking for. 401k and health benefits remain at the top of that list.

FinTech heralds a financial revolution that is for everyonenot just the country’s top earners. It’s cloud-based, consumer-friendly and offers education in a consumable manner. It makes an employer’s life easier, with low-cost tools that enable them to offer better products and greater resources to an audience that is starving for entrée to a financially secure future. Basically, it’s like taking all aspects of the financial realm and making them as simple and frictionless as ordering a cab from Uber.

Like Uber, FinTech offers simplicity, transparency, mobility, and portability. It embraces flat-fee, paper-free, transparent, simple, humanistic service. In other words, especially as it pertains to retirement, FinTech is here and it’s here to stay.

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When it comes to global retirement security, the U.S. is ranked 17th out of 150 countries, according to Natixis Global Asset Management’s 2017 Global Retirement Index Report. The index considers health, material comforts, the environment and, of course, retirement access and savings when determining rankings. 

As a global superpower, this ranking is abysmal. Many issues contribute to this looming retirement crisis in America, among them a lack of education and the widening gap in income equality, as well as the U.S. having one of the most cripplingly expensive health care systems on the globe.

While U.S. partisan politics are part of the reason we have failed to move up in the rankings, we can certainly copy some other countries’ success strategies. International governments recognize the critical importance of taking care of their people from cradle to grave, not just while they are contributing to the success of their GDP.

The top five countries in the Natixis report are:

1) Norway

2) Switzerland

3) Iceland

4) Sweden

5) New Zealand

These countries are ranked highest because they see retirement as a basic human right that should be available to everyone.

Access, incentives and automatic features are proven

Politics aside, U.S. employers realize that health care and retirement savings are the top two most sought-after benefits in the workplace. New businesses are launching daily that are focused on empowering employees in what has become a self-directed savings environment. By including incentives such as an employer match and auto-enrolment, we have a chance to make a dent in progressive retirement planning and rise in the ranks as a global leader.

The retirement industry is full of options. You can have flexibility on so many things that it may not be clear to the small business what to chose and from whom. In this episode of Chad Chats, from Ubiquity Retirement + Savings, formerly The Online 401k, you will learn what features make a great plan. Every small business is different, but that doesn’t mean your retirement plan has to be complicated. From investments to plan design, Chad gives you tips on what to ask for when you’re setting up your company’s new retirement account. If you have an existing one, you may learn something that will make managing your current plan even easier.

Here’s to you, small business owner, for setting up the right retirement plan for you and your employees!

A throwback to Ubiquity Retirement + Savings’ history, here, we get a glimpse at the genesis of our company that started as The Online 401k.

“In the first episode of Chad Chats, I recount how and why I started The Online 401k. My mission: to help the 40 million Americans who do not have the ability to save at work. Take less than two minutes and check out the video below!”

315,218,264 – US Population

(The population of the US according to the US Population Clock from the US Census Bureau.)

If you are like me, all of the talks about the national deficit, our taxes, spending and spending cuts, the debt ceiling, and our fiscal health as a nation, means so little out of context.

The numbers are enormous and they are incomprehensible to me.

To help make sense of it, and to personalize it, in these series, I will take a look at the numbers that our media and government throw around when discussing our fiscal situation and translate these into what it means for each of us.

I am comparing the big numbers to what it means to every man, woman, and child in the US and to a family of four.

In this volume, I take a look at a hot topic, the Sandy Relief Package. The bill had passed the US Congress. I am not saying this is not important; it is obviously for so many. What I am showing here is how this affects you personally, even if you live in Kansas.

So that storm that you heard so much about, that affected millions of your countrymen, affects more than just those in the northeast.

Put in simple terms, our out of pocket cost for each person in the US is $192, or $768 for a family of four. If asked, I would probably donate $192 to the cause. Would I donate $768? Probably not. But that’s how it works!

How many ‘Sandy’s’ can one family take, how many special interests can one family support, and how much is too much? Just some food for thought as our Congress goes back to the well one more time.

What do you think about this? Did you know this is how much Sandy is costing you? Do you have other examples we need to talk about? Tell me and share with your friends.

315,218,264 – US Population

(The population of the US according to the US Population Clock from the US Census Bureau.)

If you are like me, all of the talks about the national deficit, our taxes, spending and spending cuts, the debt ceiling, and our fiscal health as a nation, means so little out of context.

The numbers are enormous and they are incomprehensible to me.

To help make sense of it, and to personalize it, I will take a look at the numbers that our media and government throw around when discussing our fiscal situation and translate these into what it means for each of us.

Let’s start with our national deficit. In an earlier blog, I talked about what our national budget looked like when thought of as a household budget. The national deficit was one component of that.

Let’s think about that for a minute.

My little family of four has been burdened with $205,297 of debt that we did not ask for. If that were a mortgage, the payments would be about $1100 a month, or $13,200 a year for the next 30 years. I can think of a lot of things my family could do with that $205,297 if we were given the option.

Doesn’t matter if you are rich or poor, this is the math. Of course, in our progressive tax system, the more you have, the more you pay, but that is a whole other discussion.

When you walk down the street, I want you to see a number over everybody’s head: $51,349. That is how much of a debt burden has been put on each of us, and we let it happen.

How can we possibly expect every man, woman, and child in the US to come up with and pay off $51,349 when the average household income in this country, pre-tax, is $44,000 a year. Rich nation indeed.

So, when you hear talk about screwing our future generations, this is what it means.

Challenging times. Is it any wonder why we are facing a looming retirement crisis when so many workers do not even have access to workplace savings, and no leadership when it comes to personal and fiscal responsibility?

What do you think about this? Did you know this is much of the national debt is on you? Do you have other examples we need to talk about?

You have probably been hearing a lot about the ‘Fiscal Cliff’, our national deficit, the need to raise taxes and lower spending, the sequestration (whatever that is), and the debt ceiling (again).

Let me try and put this in easy to understand terms for us.

I recently came across an illustration that we can all relate to. Instead of talking in billions, and trillions, this illustration uses the magic of the decimal point and chops off a whole bunch of zeros.

Basically, this is the national budget; zeros removed to make it look like a household budget:

Household Income: $21,700
All Expenses: $38,200
Difference: ($16,500)

Amount to be charged to our credit card: $16,500

Existing credit card balance: $142,710

Amount the family has agreed to reduce their spending next year: $385

When stated like this, it makes much more sense, doesn’t it? Or no sense at all, depending on your stance.

This is what we are dealing with:

• Accumulation of massive debt over many years
• Earning too little to support our lifestyle
• Spending more than we are earning
• No will to change our ways

We need to declare enough! For the love of our country, our friends and family, we cannot continue like this!

We’ve been using the credit card when we should have been using the debit card!

We have been pickpocketed, and our credit card is in the hands of Congress, who, in what can only be described as a drunken binge, have run up a huge balance, Republican, and Democrat alike.

And there is another problem! Just like the borrowing limit on your credit card, we as a nation have a borrowing limit, and we have hit it – many times!

So what would you do? Rational, sane people would say wow; we really got ourselves in a bind didn’t we, we better work at cleaning this up.

Non-rational, not so sane people would instead call up the credit card company and ask for more credit.

In our national case, our credit card company is mostly China and Japan. How many more times will they be willing to take that call?

And Congress is calling on our behalf, asking for an increase to our credit card so they can spend more.

Not sure about you, but no one asked me if this is ok. No one from Congress has checked with me if I am ok with increasing the amount I have to pay for this party, and no one has asked me if I am ok making the payments on our national credit card.

I am not ok with it, and I want my credit card back.

The time has come to take control of our futures, and for us to care more! This is it, people, it’s not too late. But it will be soon.

This course is unsustainable. Never before in modern history has there been such a complex mix of a demographics, an aging population, a shrinking tax base, and such a lack of foresight. History tells us our empire will fail; we are close to crossing the point of no return.

Take action. Take control. Stop outsourcing our futures to 535 people in Washington who crave instant gratification, at all costs. Because, like it or not, we are all in this together, and if we do not take serious measures today, this party will be over – one and done.

What do you think about this? Do you get it? Are you pissed?

Save or else

There are forces at work that think the retirement system is broken (401k, IRAs). ‘They’ say that government knows best and that ‘big brother’ should step in and take care of you.

‘Their’ theory is simple. A voluntarily contributed to the retirement system is not working. People will not and do not save enough or anything at all for their future needs.

There is some truth to that. Many people are not saving, or if they are, not enough.

For the first time in the history of modern humans, the experiment of not having to work until you drop has been playing out, and we are entering new territory.

‘They’ do have good intentions. ‘They’ want people to have a chance at a dignified and enjoyable retirement. Nothing wrong with that.

But ‘They’ are one track minded. What about those who are saving? Over 70% of employees who have access to a retirement plan at work to save, and have saved literally trillions. That’s the key; access to a plan.

The Rub — Us vs. Them

‘They’ propose to force us to save 7% or more of our income. ‘They’ want to put that into a government-run program for our future benefit. ‘They’ want to guarantee us a future. ‘They’ think they can do it better than us. ‘They’ have the answer.

Wait, aren’t we already doing that?

Does sound familiar doesn’t it? Sounds like Social Security, but it is not. The Social Security story has played out, and we see where that has gotten us.

Remember Social Security was never meant to be the main pillar of retirement; it was designed to be a safety net for widows and orphans. But all of ‘Them’ before us knew better and kept expanding and expanding its benefits to where we are today. And with those expanding benefits, came expanding expectations.

What should we call this? Social Security 2.0?

We as a nation already spend 57% of our budget on entitlement programs, and projections show that percentage exceeding 100% by 2025. Sounds like a long time doesn’t it. But, that’s only 13 years! 1999 was 13 years ago. Still feel like partying?

I’ll take the free market over government-run programs any day.

With the free market, we can:

  • Do our homework and make informed decisions
  • Benefit from competition and innovation
  • Hire and fire providers with ease
  • Exercise greater control over our own destiny

With government we can:

  • Outsource our responsibilities into the hands of a few
  • Hope that ‘They’ will have the political will to do the right thing, over many decades
  • Trust that our assets set aside won’t be ‘borrowed’ to scratch an immediate itch
  • Believe that someone else will take care of us

The Solution?

So what is the solution? I agree that for the benefit of us all, we should institute mandatory retirement savings.


Blend the power of the government to mandate what is good for us with the power of the free market to deliver superior solutions.

Take what we have learned from unions, pension plans, Social Security, and the voluntary retirement system, and re-imagine what is possible.


In today’s world, where everyone including our own Congress is trying to get people to spend more to keep our credit driven economy growing the message to save for emergencies or retirement is not coming through. Check that, it isn’t even being broadcast.

There are so many forces at play: unemployment, low wages, consumer debt (including student loans, mortgages, credit cards), taxes, so many taxes, government debt at all levels, unfunded public and private pension plans, and austerity measures across the board, how is a person to save?

Then there are the marketers. New cars, big TV’s, vacations like you are royalty, games, entertainment, dining out, houses full of ‘stuff’. Spend, spend, spend. Spend like there is no tomorrow, there will always be another credit card in the mail. Spend for the good of us all.

Don’t get me wrong; I am guilty of it too.

I, by nature, am a very optimistic person. I have to be to be an entrepreneur, and to be happy in this world.

I try and imagine a world where the message is save, save, save. I think we used to have that, but that was before my time.

What if we measured success not on who could spend the most, but who could save the most. What if winning the game, and garnering the envy of your neighbors came because you saved enough to get out?

Getting out means you don’t have to work. You can enjoy your time however you see fit — on your terms. Imagine what that would look like?

I realize that for all of us, employment comes from spending on goods and services. I also realize that you need to live and enjoy your time on this planet. But there must be a balance, no?

Me, I am changing how I think about all of this. I want to win, and I want to live on my terms.

What are you doing for yourself?


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44 Montgomery Street, Suite 3060
San Francisco, CA 94104
Support: 855.401.4357

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