Home » An Honest Look at the Personal Finance Crisis: Elizabeth White (Transcript)

An Honest Look at the Personal Finance Crisis: Elizabeth White (Transcript)

Elizabeth White

Here is the full transcript of author Elizabeth White’s inspiring talk: An Honest Look at the Personal Finance Crisis @ TEDxVCU February 2017 conference.

Listen to the MP3 Audio: An honest look at the personal finance crisis – Elizabeth White


Elizabeth White – Author

You know me. I am in your friendship circle hidden in plain sight. My clothes are still impeccable — bought in the good years when I was still making money.

To look at me you would not know that my electricity was cut off last week for nonpayment, or that I meet the eligibility requirements for food stamps.

But if you paid attention, you would see that sadness in my eyes – hear that hint of fear in my otherwise self-assured voice. These days I’m buying the $199 trial-size jug of Tide to make ends meet. I bet you didn’t know laundry detergent came in that size.

You invite me to the same expensive restaurants the two of us have always enjoyed, but I order mineral water now with a twist of lemon, not the 12-dollar glass of chardonnay.

I am frugal in my menu choices. Meticulous, I count every penny in my head. I demur dividing the table bill evenly to cover desserts and designer coffees and second and third glasses of wine I did not consume.

I am tired of trying to fake appearances. A friend told me that I’m broke not poor, and there is a difference. I live without cable, my gym membership and nail appointments. I’ve discovered I can do my own hair. There is no retirement savings, no nest egg. I exhausted that long ago.

There is no expensive condo to draw equity and no husband to back me up. Months of slow pay and no pay have decimated my credit. Bill collectors call constantly, reading verbatim from a script before expressing polite sympathy for my plight and then demanding payment arrangements I can’t possibly meet.

Friends wonder privately how someone so well educated could be in economic free fall. I’m still as talented as ever and smart as a whip, but work is sketchy now, mostly on and off consulting gigs.

At 55, I’ve learned how to fake cheeriness, but there are not many opportunities for work anymore. I don’t remember exactly when it stopped, but I cannot deny now having entered the uncertain world of formerly and used to be.

I’m not sure anymore where I belong. What I do know is that dozens of online job applications seem to just disappear into a black hole. I’m wondering what is to become of me.

So far my health has held up, but my body aches – or is it my spirit? Homeless women used to be invisible to me but I appraise them now with curious eyes, wondering if their stories started like mine.

I wrote this piece a year ago. It’s a composite of my story and other women I know. I wrote it because I was tired of pretending I was all right when I wasn’t.

I was tired of faking normal. I wasn’t seeing myself in the popular press. Nobody I knew was traveling the world or buying a condo in Costa Rica. Very few of my friends had set aside the 15% to 20% experts tell us we need to maintain our standard of living in retirement.

My friends, many in their 50s and 60s, were looking at a downward mobility, a work-for-life proposition, just a job loss, medical diagnosis or divorce away from insolvency.

We may not have hit rock bottom, but many of us saw a sequence of events where rock bottom was possible for the first time. And the truth is, it really doesn’t take much. The median household in the U.S. only has enough savings to replace one month of income. Forty-seven percent of us cannot pull together $400 to deal with an emergency. That’s almost half of us.

A major car repair and we’re standing on the abyss. You wouldn’t know it to look around you – I’m not the only one in this situation. There are people in this room who are in the same predicament, and if it’s not you, it is your parents or your sister or maybe your best friend.

We get good at faking normal. Shame keeps us silent and siloed. When I first decided I was going to come out with my story, I did a website and a friend noticed that there were no photos of me – it was all kind of cartoons like this. Even as I was coming out, I was still hiding.

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. When you’re a graduate of Harvard Business School as I am, you’re some kind of double loser.

We boomers hear a lot about how we have underfunded our retirement; how it’s all our fault. Why on earth would we draw down our 401(k) plan to cover the shortfall on our mother-in-law’s nursing home care, or to pay for our kid’s tuition, or just to survive?

We’re accused of being poor planners and deadbeats – all that money we spent on lattes and bottled water. To shame and blame is so deliciously tempting. Many of us don’t even wait for others to do it we’re so busy doing it to ourselves. I say let’s own our part: we all could have saved more.

I know I could have saved more, and if you were to rifle through my life over the last 30 years, you would see more than one dumb thing I have done financially. I can’t change that now and neither can you, but let’s not mix up individual, isolated behavior with the systemic factors that have caused a 77-trillion-dollar retirement income gap.

Millions of boomer-age Americans did not land here because of too many trips to Starbucks. We spent the last three decades dealing with flat and falling wages and disappearing pensions and through-the-roof cost on housing and health care and education.

It used to not be like this. We all remember the three-legged retirement income stool which had the savings and pension and social security. Well, that stool has gone wobbly.

Take savings – what savings? For many families, there’s just nothing left to save after the bills have been paid. The pension leg of the stool has also gone wobbly. We can remember when many people had pensions.

Today only 13% of American workers are employed by companies that offer them. So what did we get instead? We got 401(k)-type plans and suddenly responsibility for retirement planning got shifted from our companies to us. We got the reigns but we also got the risk, and it turns out that millions of us just aren’t that good at voluntarily investing over 40 years. Millions of us just aren’t that good at managing market risk.

And really the numbers tell the story. Half of all American households have no retirement savings at all. That would be zero. No 401(k), no IRA, not a dime. Among 55-to-64-year-olds who do have a retirement account, the median value of that account is $104,000.

Now, $104,000 does sound better than zero, but as an annuity, it generates about $300. I don’t have to tell you that you can’t live on that. With savings down, pensions becoming a relic of the past and 401(k) plans failing millions of Americans, many near-retirees are dependent on social security as their retirement plan.

But here’s the problem. Social security was never supposed to be the retirement plan. It’s not nearly enough. At best it replaces something like 40% of your pre-retirement income.

Things have changed a lot from when social security was introduced back in 1935. Then, a 21-year-old male had a 50% chance of living until he was 65. So he retired at 60, did a little fishing, kissed his grandkids, got his gold watch – he’d be dead within five years of receiving benefits. That’s not the pattern today.

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