The No. 1 Strategy for Sabotaging Retirement


Let’s reverse the conversation today and, instead of looking at how to proactively secure a sustainable retirement, let’s discuss what we must protect against in pursuit of that goal. In other words, the best offense may be a great defense. In order to understand the defensive scheme we need to employ, let’s discuss the most likely form of the attack against our retirement strategy.

This reminds me of a story about my wife, Stacy, who is a volunteer mentor at a local elementary school. Her current student is a fourth grade girl who is struggling with basic arithmetic. One of the tools she uses to help this student is an iPad app that displays basic math problems like 2 + 8 = ?, then waits for the child to solve it. Sounds good, right? But this digital version of flash cards has one severe drawback.

Unfortunately, like Pavlov’s dog, the student is being conditioned that if she pauses, the answer slowly materializes onscreen to “help” her get the correct answer, thus making it “easier to learn.” While the intentions behind this technology are noble, the outcome is that students are taught to take the easier path of not thinking, but simply waiting for the answer to be given to them. This sabotages the engagement of a student’s mind with the exercise and undermines her ability to practice reasoning and problem-solving. At best, over time she may come to memorize the exercise through repetition, but the real issue is has this exercise really helped the student to assimilate the principles of math?

So, how does this relate to the number one threat to retirement? In my view, the best way to sabotage anything is to undermine critical decision-making by removing the process of understanding how and why things work the way they do. Like learning a simple math problem, one can either “memorize” with little or no understanding or one can learn to understand by processing.

I would never suggest that retirement planning is a simple 2 +2 = 4. Nor is it just a few clicks of a mouse on a digital questionnaire. This is because of two incredibly important factors. First, human beings are emotional creatures and, thus, we have an innate information bias that limits what we internalize to points of view consistent with our emotional state. And second, if asked to work with our brains, we tend to prefer easy over hard. For most of us, it is easier to pick up a hammer and pound away or click a mouse than it is to sit down and exercise our brains by engaging our critical faculties.

My wife decided that it might make more sense to create some old-fashioned flash cards and start her young student off learning the basics—like counting on her fingers—beginning the process of teaching her to think independently. My recommendation for investors is that, when it comes to planning for retirement, we all try to do the same thing. A good start in the right direction is to seek out a good mentor who will train you to learn to think critically—without shortcuts—when it comes to planning retirement.

The opinions referenced in this material are intended for educational purposes only. These opinions should not be construed as recommendations, but as illustrations of broader themes. Forward-looking statements based on past performance are not guarantees of future results. Investment involves risks, uncertainties and assumptions based on changing market or economic conditions. Actual results may differ substantially from the opinions expressed. Neither Provasi Capital Partners LP nor any of its affiliates provide any tax, legal or specific investment advice. Investors should always seek the advice of their tax, legal and/or financial advisors regarding their specific situation.

Frank Muller

As CEO of Provasi Capital Partners, Frank Muller brings nearly 30 years of experience in building and managing multi-channel distribution services. Frank has been a featured contributor in numerous industry publications, bringing his unique insights and perspectives to relevant issues impacting financial advisors and their clients.

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Frank Muller