I don’t know which is worse: realizing you cannot keep a promise you made to someone important to you, or being the person who relied on the promise when you grasp that it is not going to be kept.
In 1973, I was 33 years old and just starting a public-speaking career. The National Speakers Association asked me to join, and I became a charter member. Our first president, the late Bill Gove, was a terrific speaker and also a great salesman—one of the top life insurance salesmen in the country for many years.
One of his favorite lines was quite telling. He would ask his prospect, “How much life insurance do you have?” The person would tell him. Bill would pause, get a funny look on his face, and deliver the punch line as a question: “You don’t plan on being dead very long?” Every time I saw him deliver that line, the audience would roar.
Were Bill alive today, he would probably be selling annuities to those same clients. I don’t understand why insurance companies don’t call annuities “enjoying-life insurance.” If they did, they would probably sell more. Somehow I can’t see Bill telling a story of asking a prospect about their retirement portfolio, and then delivering the punch line, “You don’t plan on being retired very long?” My guess is the audience would shift in their seats and perhaps chuckle uncomfortably. What’s the difference? An entire generation would know he is right; we are very worried that we won’t have enough money to enjoy retirement.
So what has changed since 1973?
Most of us never thought too much about retirement when we were younger. In the 1970s, if you worked for the government, were a union member, or worked for a medium to large corporation, there was a good probability that you were guaranteed a pension, particularly if you worked there for any length of time. Couple that with Social Security and you could enjoy retirement. My dad had two pensions—one from the State of Illinois and another from the post office—and he did just that.
During my career, I trained salespeople and managers. I always warned salespeople not to exaggerate or overpromise to their clients. I told them: “Don’t let your hippopotamus mouth overload your hummingbird ass!” That line certainly got their attention. The consequences of not keeping a promise in the marketplace can be devastating. They can include the loss of a client, but also the loss of your reputation.
The corporate world, many unions, and federal, state, and local governments are all guilty of doing just that. They made pension promises to their employees that they just could not keep. I had a good friend who became a senior pilot at Delta Airlines and was quite proud the day he flew his last flight into Atlanta Hartsfield Airport. The customary fire hoses greeted his plane, and he had a big retirement party. Less than two years later, Delta filed for bankruptcy, the government took over its pension obligations, and his pension was drastically reduced. Sad to say, he passed away within five years.
The current Employee Benefit Research Institute Retirement Survey reports that only 3% of employees in the private sector have a pension plan. The rest have some sort of savings plan, like a 401(k). Corporate America has successfully unraveled from its pension promises in two ways: either companies bellied up and shifted the pension liability to the government; or they transferred the responsibility back to individual workers. It is now our job to worry about our own well-being. In effect, companies now just administrator voluntary savings plans for their employees.
While corporate America made promises it could not keep, at least most companies ‘fessed up to the economic reality, explained that making good on their promises would force them into bankruptcy, and got out from under those commitments.