Mike Milligan and Gary Nolan explain how the shift from pensions to 401(k)s moved all investment and longevity risk onto workers. You now decide how much to save, which assets to buy, and how to stretch money across 25 to 30 years of retirement. Two people with identical savings can have vastly different outcomes based on their goals and health.
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It's Tuesday, February 24th, and this is the One of a Kind Financial Show Daily with your host, Mike Milligan. Uh, this past weekend on the One of a Kind Financial Show, Gary and I talked about how retirement used to come with a promise. Today it comes with more questions than answers. We unpacked how retirement changed and why planning matters more now than ever. Enjoy this segment from the One of a Kind Financial Show.
People think When we think about retirement today, it can feel complicated, maybe even intimidating. We hear terms like 401s, IRAs, Social Security timing, market volatility, but retirement didn't always feel this complex. Mike, take us back a bit when retirement was originally worked in this country.
Did anybody just lose interest when Gary started saying some of those words? Because think about that, guys. 401s, IRAs, Social Security timing. Social Security timing, market volatility.
Those—
yada, yada, yada.
That just sounds like that kid from Charlie Brown that said, wah, wah, wah, wah, wah, wah.
Exactly. The parents. Yep.
Guys, retirement was so simple in the past. It was so simple. You stayed at a job for 35, 40 years. Around Norfolk, Virginia, you were in the military for 20, 25 years and maybe got a federal job. But, uh, this whole idea of that market speak, we need to put that complexity to the side and maybe start looking at what retirement is today, because it was so straightforward in the past. You stayed in a long time with an employer, you got a watch, a La-Z-Boy recliner, and that pension provided predictable monthly income for life.
So there was a built-in sense of security, wasn't there, Mike?
Exactly. So that employer historically assumed most of the responsibility for the end of your life when you were no longer working. Workers didn't have to worry about market performance. They didn't have to decide between Vanguard, Fidelity, Schwab, small cap. They didn't have to do that. They didn't have to worry about contribution rates. Their focus was coming to work for their time, stayed at that job as long as they possibly could, and the company focused on providing retirement income.
Yeah. That model didn't last forever though, unfortunately, Mike. It's pretty much gone.
It didn't on purpose, right, Gary? Because companies started focusing on profit over people.
Yep.
It was more important to— they didn't care about how you individually lived your life anymore. You used to know your boss and your boss's boss and their families and their kids. That's not the way anymore.
No.
Uh-uh.
Over time, several things changed. There were some other factors that hindered the pension model, like rising costs. People lived longer, so employers could no longer bear that big cost of retirement. And the workforce became more mobile as cars and planes became— people started traveling more and they would move away from their hometown. See, employers realized pensions were difficult to sustain long-term. That's when we began to see the shift toward another word that we talk about here, defined contribution plans.
Mm-hmm.
That's where you have to bear all the risk, not the employer anymore. Defined contribution plan is where you put money in. The employer may match some of that money, but then the investment risk How you create income for yourself, that's all on you.
And that's where the 401 comes in, right, Mike?
That is the most popular defined contribution plan. Over time, several things changed at once, right? And so when that 401 started, the US Department of Labor became— put the 401 in, it became more widespread in the late '70s and the early 1980s. Folks who remember, if you have lived in this town long enough and you're a federal employee, you remember when we switched from CSRS federal employees to FERS and they told you FERS was going to be such a better retirement plan? It used to be pension, Social Security. Now it was pension, TSP. That's when it all shifted in the mid-'80s. It's important to note, the 401 was never originally intended to completely replace pensions. Over time though, that's exactly what happened.
Mm-hmm, absolutely. The show is a one-of-a-kind financial show with Mike Milligan. I'm Gary Nolan, your host. Wanna thank you for joining us, spending part of your weekend with us. Mike is with Wonok Financial. Let's give you the phone number again on the calendar, all set up with that comprehensive plan, that one-of-a-kind financial plan that Mike's gonna talk about again in just a couple of minutes. 800-748-1838, 800-748-1838, or text the word ideas to 600-700-0000. Do it right now. The folks at One Oak Financial standing by, ready for your phone call. So instead of the company being responsible, the individual became responsible. And that's, that's quite a difference.
A massive shift. Like, I cannot underestimate how big of a change for retirement this became. Today, individuals are responsible not only for saving, but for making decisions on how much to save, how to invest, how to manage risk, how to plan for taxes, and how to create income that They may need to last decades.
That's a lot to manage, Mike.
On top of only doing that, they're trying to manage what their kids are doing on a daily basis, maybe parents who need some additional care. That's why people neglect this. So it's challenging even with everything else going on in your life, then you put on that we are living longer. According to Social Security, many people who reach 65 today can reasonably reasonably expect to live to the mid-80s or longer. That means retirement may last 25 or 30 years.
Wow. Got about a minute left, Mike. That completely changes the conversation, doesn't it?
It does. Retirement is no longer a short chapter. It's one of the longest phases of life. That's when we see so much anxiety around the question, do I have enough money? Because it's not just about reaching retirement, it's about sustaining it.
And that's where the emotion comes in, doesn't it?
Absolutely. Retirement planning isn't just math. It's about lifestyle, purpose, and peace of mind. 2 people with the same savings can have completely different retirements depending on their goals, values, and expectations.
All right, Mike, up against the clock. Tell us about the one-of-a-kind financial plan.
Well, comfort in life may mean travel flexibility, time with family, simply not worrying about your money. That's why at One Oak Financial, we Built the one-of-a-kind financial plan. Numbers are important, but having a plan and a vision behind how you live is important. Gary, we haven't talked about this on the show yet, but we recently just got some stats about what baby boomers want in their retirement. They want to be able to spend money on themselves more and more. Sure.
Wow.
But they want to plan to know that they can comfortably do it and then still leave some legacy and take care of their health. Guys, those stats prove that the one-of-a-kind financial plan works because it gives you a plan focused on your one-of-a-kind unique life. Gary, I'd love to have people call in. I'd love to meet with them. I'd love to explain how we can lower their taxes, guarantee their retirement income, help them manage their investments more efficiently, create a long-term care plan, and build a legacy for their life. So we have A couple openings left in the next couple of weeks. I would love to— for you to give people a way to contact us.
Yeah, absolutely, Mike. Happy to do so. Of course, just pick up the phone and dial this number. Slots do fill up quickly during the show. There's no cost, there's no obligation. 800-748-1838. 800-748-1838. Or text the word ideas to 600-700. The folks at One Oak Financial standing by this weekend, ready for your phone call.
This has been the One of a Kind Financial Show Daily with your host, Mike Milligan. I hope you've enjoyed these segments. From the One of a Kind Financial Show with Gary Nolan and I, I need to give you a reminder, and that is that I am an investment advisory representative with Advisory Alpha LLC, member SEC. Uh, Ideas by Mike, doing business as One Oak Financial, is an unaffiliated entity of Advisory Alpha LLC. All opinions expressed by me and Gary on the One of a Kind Financial Show are for education purposes only, should not be construed as financial advice, and are solely our opinions. For more information on One Oak Financial, go to the number one oak financial dot com. And if you're interested more about the book that I authored, the One of a Kind Financial Plan. You can go to amazon.com to, to read the reviews and find out more about that book.
Be one of a kind with Mike's plan. In a face shot growth, take a stand. Visibility, strategy, take the lead. Transformation's yours, fulfill the need. Mike's got the way to help you rise and stay. Leadership impact you'll find in your one-of-a-kind Be one of a kind. Take the flight. Mike's the guide. You shine bright. You shine bright.
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