How can employers help employees understand the need to plan for their own prosperity, before and after retirement? How does public policy affect those conversations and decisions? What can people do to ensure they will be allowed to achieve...
How can employers help employees understand the need to plan for their own prosperity, before and after retirement? How does public policy affect those conversations and decisions? What can people do to ensure they will be allowed to achieve prosperity?
Clara Del Villar currently serves as the Director of Senior Initiatives at Freedom Works Foundation. With a 28-year Financial Industry career as well as entrepreneurial roles in energy, health technology, and digital media industries, she shares her passion for capitalism and tips to increase understanding regarding financial policy.
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Linda J. Hansen: My special guest today is a friend of mine Clara del Villar, and Clara is the Director of Senior Initiatives at FreedomWorks Foundation. She has a 28-year financial industry career as well as entrepreneurial roles in energy, health technology, and digital media industries. She was an adviser for 60 Plus Foundation; the Founder and CEO of the Hispanic Post, which was a conservative, digital news site profiling US-Hispanic business community members; and she's at the time Board of Directors of General American Investors Company and on the Executive Committee of New York Weill Cornell Women's House Symposium. As someone who loves being active throughout her life, she also started the American Alpine Club and trekked to Everest-base camp in 2017. I'd love to run marathons, but I've never wanted to climb Mount Everest because I don't like to be on the top of the ladder, so but I'd love to hear about that. So anyway, with that, you can tell that she's had a fantastic career in finance, in business, and she's just bringing so much to the table here with us today. So, I'd like you to welcome Clara del Villar. Thank you Clara for being here with us today.
Clara del Villar: Thank you Linda. I'm delighted to be here.
Linda: Oh well, thank you. Well with Prosperity 101™, we really trying to help people understand as I said the foundations of prosperity, what can really help them be prosperous and thriving and their personal professional lives economically, the policies of prosperity, and then how they can protect that prosperity. And as you and I were talking before the interview, we were talking quite a bit about your background with the financial industry and then also your knowledge on how to help people truly protect prosperity so they can enjoy the later years of life. Would you like to expand on that?
Clara: Absolutely. I think as someone who's enjoyed a long career and has been focused on how people save, or investments and retirements, it's long been on my mind that how will people really be prepared for a life span that is no longer 65 years old but can easily run into a 100 or beyond--
Linda: Many people is living beyond a 100 now.
Clara: Correct, correct.
Linda: And they are active, climbing Mount Everest.
Clara: There you go. And this is the beginning of a very almost revolutionary change. So, by 2030, 20% of the US population will be 65 or over.
Linda: Oh, that’s amazing.
Clara: So, we'll be talking about millions of people and particularly the boomer population. The baby boomer population has always been an independent population, and the reason I stressed that particular characteristic is because boomers are not just gonna be waiting for social security checks. They want to stay independent. They want to stay productive and lead very meaningfully inactively in their lives. No question about it.
Linda: Right, right. So how did you get involve with the senior initiatives project here?
Clara: Well, I worked certainly in financial industry and then also with startups of that kind that you just described, and then I wanted to close the circle and go back and started dressing this senior issue. Are seniors prepared, do they really know, or nears seniors prepared? That's probably the target group--
Linda: The target group…the ones who maybe they didn't prepare earlier but need to do some catchup?
Clara: Correct. Right and so really provide private sector solutions for them to address financial shortfalls, and the reason this is important is because there's still time to come up with a broad range of ideas in a very strong economy to start to address these issues. So FreedomWorks Foundation provided a very good platform to start the conversation in an advocacy and awareness-raising scenario.
Linda: And that's really wonderful and it's nonpartisan just like Prosperity 101™ is but we’re very much aligned in the fact that that we promote free market, economics-free enterprise, limited government, more individual responsibility and freedom.
Clara: No question about it and more or less awakening the inner productivity of every person that everybody can do something.
Linda: Right, right. And they can find ways to channel their talents and ambitions and be able to grow economically as well.
Clara: Correct, correct. No question.
Linda: When you look at like the senior population or the upcoming senior population, what would you recommend employers do to help educate their employees about what they need to do to plan head?
Clara: Well, certainly employers across the board have been introducing 401 (k) plans. Now for probably the last 40 years, right? Only 13% of Americans, roughly 13% Americans collect the pension or part of the pension obligation—
Linda: No longer the gold watch, right?
Carla: Correct, correct. So, I think employers--
Linda: For those who were younger than we are, the gold watch is what you got after you have been with the company for like 30 years and they came in and they give you gold watch and they said it's time to go.
Clara: That's right. That's right. And so now millennials will be even more active in terms of job hopping over the course of their career. But for now, I think employers have been, I think in refining the way that they explain 401(k)s to their employees. I think many of them urge them to do so, but studies show that I think employers would be better of having employees enroll and then opt out, so check the box to opt out. So, they're automatically enrolled. Studies show that an employee is 60% more likely to save for retirement if they opt out of a plan instead of opting into a plan.
Clara: Right, because most of them start worrying. Do I really, what about that 100 dollars or 200 or whatever, but the reason this is really so critical is the 401(k) is free money from the employer and that's just the deal that you shouldn’t pass up.
Linda: Right, right. What do you think about self-directed fund?
Clara: Self-directed fund, you mean in terms of?--
Linda: Yeah, in terms of 401(k), like being able to do that. People should ask their advisor about that.
Clara: Definitely ask their advisor. They’re probably HR people, human resource people that can help. I think women are a crucial source of investing advocacy here because they have a tendency to invest much less than men, and also, they're 60% less inclined to invest in the stock market. And the stock market is where you grow wealth. And while there's a lot of drama presented sometimes on the media, on the ups and downs of the equity market, we have the strongest equity market, stock market in the world. So, companies here and the transparency behind companies in the United States allows one to look at the stock market as the number one place to grow wealth, I think. So, helping people understand not just that they should invest in 401(k) but that they should really consider growing their wealth.
Linda: Growing their wealth, right. And I do some consulting with a financial planning company as well, and they take a very holistic look at everything. It's everything from insurance to well basically savings, investing, debt reduction, insurance, investments, long-term care, and estate planning, and I think that's one of the things people don't think about a lot is even long-term care. I mean I've shared with you a little bit some of the expenses and unexpected expenses that I've got to do with long-term care, taking care of my mother who of course I want to take excellent care of and make sure she's got a great quality of life. But I think so often especially the generation ahead of us did not really plan for that, and so then the boomers are basically getting the brunt of that lack of planning in a sense. And as we look at this whole program of Prosperity 101 ™ in just opening the conversation with an employer and employee, that is something that employers can share with employees as well. It's just how to plan for those aging years as well as checking with their parents to make sure that they've planned ahead.
Clara: Right. No question about it. I think it will be as you’re indicating a new dynamic which means when were in our 20's, we didn’t really think about retirement. There was no way it entered into our head, what that meant. But I think now with young people to help start the conversation and make sure the conversation sticks that it's gonna be meaningful, a lot will change in the years ahead. The main reason I'm really trying to raise the visibility of self-engagement in your retirement or thinking about it more vigorously is because we may not have the federal funds--
Linda: We can't depend on the government. We should never depend on government.
Clara: We should never depend on government, and also increasingly without sounding too negative, the math doesn't work. So, it's really going to be in 15 years of securities gonna have some major spending gap issues. They’ll probably be filled, but it still is something that will be only-- should only be a minor part of your retirement planning, a very minor part. The average retirement social security check is probably about 20,000 dollars a year. So--
Linda: That's not very much.
Clara: It's not livable.
Linda: It's not a living wage. That's just people that's say.
Clara: It's not a living wage. Right, right, right. And the importance of business now I think in this dialogue would be more important than ever.
Linda: And that's really a great point. And as you know, with Prosperity 101™, you know our goal is to help create a conversation between employer and employee to help erase that disconnect, that often occurs in the workplace. And as you bring this topic home, I feel like it just personalizes it so much more. It takes it away from just paychecks, but it takes it into quality of life. It's looking at life from again using the term holistic, a holistic perspective. It's not just your paycheck, but it's what you do with that and how you plan for the life you want. It's never telling someone how they should live their life or even as we talk about policy, we don't want to tell anyone how to vote. But they should be well educated, well informed so that they can make their own decisions.
Clara: I completely agree and part of our direction is going to also be more or less to take the burden off of business as the bad guy. You know, I spent a career on Wall Street. And like any industry that once spends time, there are some bad apples.
Linda: Right. But it works with anything.
Carla: With any industry. But Wall Street is an incredible engine of growth for the country, Wall Street and certainly business. And I think really making sure that Americans understand that some of the new policies or proposals that are coming into place may actually damage retirement savings. So, I'll give you an example. I'm doing analysis of the democratic and republican candidate proposals here, and I'm just a little bit worried about accountability capitalism and reconstructing capitalism and changing the corporate charter and what that means. The reason I'm worried about that as well as the financial transaction tax is that all of these proposals have a direct negative impact on retirement savings. So, if we have 29 trillion dollars of savings in the United States now, with pension funds, 401(k), IRA’s, any of those taxes will damage the nest eggs that everyone has either accumulated or will be expected to accumulate. So, kind of more or less putting up the yellow flashing light and saying rethink some of these proposals and what it means to your future seniors as much as it does to your currently retired one's.
Linda: That is just fantastic, so I'm sure that our listeners would be more than interested in getting in touch with you. So how would they do that? If they want to reach to you and get more information about what you do and how your information could help them as they make decisions, how should they reach you?
Clara: Well, I'm at FreedomWorks Foundation and I can be reached at email@example.com and I also have a blog. I blog for FreedomWorks and also at Newsmax.
Linda: Oh, fantastic. Okay.
Carla: And so Newsmax, I have a blog, a post area and most of my articles are related to the conversation we're having today.
Linda: That's fantastic. Thank you. I'm sure that our listeners will want to reach out to you. So, I want to tell you thank you so much for being here today and thank you for helping to really close the gap or close the loop shall I say about the connection between current income, current paychecks and prosperity and the prosperity for the economic future as we move through our life cycle. So, I'm really glad for what you're doing to help not only current seniors but future seniors, and so for all of us, we say thank you so thank you so much.
Carla: It's my pleasure.
Linda: And thank you so much for visiting with us today or spending time with us with this podcast. Again, you can reach Clara by going to the FreedomWorks website and getting her information from there or you can see her blogs and things at Newsmax and FreedomWorks. So, thank you for joining us today. This is Linda J. Hansen signing off with the Prosperity 101 Breakroom Economics™ Podcast. Thank you.
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