401(k) Road Trip: A Finance Guy Rides to the Rescue Of Retirement

Broken eggs
Broken eggs

Sometimes the freedom of the open highway, the adrenaline rush of a road trip, can be just the cure for ills of the spirit.

But how about the ills of the pocketbook?

With our hopes for Social Security dwindling and our retirement prospects looking dismal, if a cure for the financial ailments of the over-65 set is to be found on the road at all, it may require a full-on cross-country expedition.

Chad Parks, CEO and founder of The Online 401(k), is taking that drive.

On April 16, Parks and his team set out for six weeks in an orange 1970s VW bus, on a mission to shoot a documentary about Americans' soured retirement dreams and 401(k) miscues: Broken Eggs: The Looming Retirement Crisis in America. They'll also be hunting for solutions to the crisis -- ideas for how we can successfully navigate our way to a comfortable retirement. The film's tag line: "Because you can't live on a gold watch."

The team is conducting interviews about retirement with everyday people at each stop on its drive from California, through Nevada, south to Oklahoma and Texas, east, and then up the Mississippi River for a stretch, and then over to Washington, D.C., and New York.They'll hold conversations in local bars and fairs, downtowns and city halls, public parks and private homes.

Parks describes his rag-tag excavation of how America feels about retirement as "MTV-style Road Rules meets TBS drama."

'Dear Lord, I Do Not Want to Outlive My Money'

Parks is all too familiar with the dire state of retirement in America, and its even gloomier outlook. His company, The Online 401(k), is a retirement plan provider for more than 5,000 businesses nationwide.

His goals for the trip and the film are both to dig into the American psyche for solutions to the country's problems and to raise awareness about the urgency of the trouble.

"Somebody needs to sound the alarm," Parks said. "Ten thousand baby boomers are expected to retire every day for the next 20 years. The economic effects [of] all these retirees taught to 'save, save, save,' -- they're going to hoard their precious dollars. 'Oh, dear Lord, I do not want to outlive my money' -- that's everyone's biggest fear."

Meanwhile, the financial supports people thought they could rely on are cracking beneath them.

"American retirement has been like a three-legged stool," Parks said. "There's a pension plan -- the first leg -- for grandma and grandpa, then Social Security. But in the early '80s, the 401(k) arose because people realized they had to save by themselves -- with employer matches and contributions -- [that's] the third leg."

With pensions rapidly vanishing, Social Security destined for a decline unless the taxes that fund it are raised, and employers tightening their belts in an already floundering economy, none of those legs feels particularly sturdy.

The team doesn't have an obvious antidote in mind -- but it wants to animate the issue through human interest stories.

The VW Bus as Agent Provocateur

The Online 401(k) roadies hope that bright orange vintage Vanagon will attract some friendly attention as they hunt for folks willing to tell their stories. They may be talking about money, but the VW bus still embodies a more free-wheelin', hippie sensibility.

"It's one of those iconic things -- you need a character and a star," Parks said. "It resonates good memories with that era."

The current era could use some of those old good vibes. Right now, the nation's companies have $1.5 trillion in unfunded or underfunded pension obligations. Some 46% of Americans have less than $10,000 saved for retirement, and 29% hold less than $1,000. Overall, American workers are $6.6 trillion short of what they'll need to retire. And the idea of a real retirement has become almost an anachronism: 74% of people expect to keep working after "retirement," and 40% expect to work "until they drop."

Beyond being a conversation starter, the VW also embodies another idea: It's a "Code Orange" alert about our financial future.

"We want to take that to Washington," Parks said. "You don't try to solve these problems inside your chambers of Congress. Get people talking about it, and show them: Here's what people think."

A Social-Mobile Mission

Social media is now viewed as the fastest way to access large swathes of people, and Park and company have given the trip an online presence. But their approach has an old-school bent. They're hoping that it will be the live, in-person interactions made possible by hitting the road will be what makes their project go viral.

The crew also anticipates online audience involvement in the final product. There are plans to post video chapters on YouTube as they go to provoke questions and feedback from viewers.

Inciting attention to the issue is of the essence, because it's clear that at least part of the problem is that too few people are thinking enough about their financial futures.

"We're so instant gratification, in the moment, paycheck to paycheck," said Andrew Meadows, consumer and brand ambassador at The Online 401(k) and newly minted roadie. "We're so in the mindset to live comfortably, we're not planning ahead."

Broken eggs
Broken eggs

The Search for Solutions

There are a host of sometimes-contradictory recommendations for people planning their retirement: Invest in fixed income, not in equities. No, buy stocks for the long term.

But the issues extend far beyond mere individual retirement savings strategies: The consumer dynamics that result from changes in people's spending behavior greatly affect the whole country.

"We're a spend-based economy," Parks said. "Money needs to flow through the system. If they're hoarding it, what is that going to do to it?"


The Big Retirement Myth: You'll Spend Less


The film is not a commercial for any particular agenda, Parks says. It's policy-agnostic, he says: "truly neutral Switzerland."

Still, he does have some opinions of his own. The whole system of retirement needs to be simplified, he thinks. And, he calls Social Security a "Ponzi scheme," and instead suggests we replace it with a tweaked alternative. "We need make [Social Security] to a certain point required," Parks said. "You have to pay Social Security, but pay into your own plans."

And in his view, any political plan to improve matters will undoubtedly require some serious tax incentives to encourage people to save retirement funds.

Ultimately, though, the situation is so dire, solving it might lie beyond the reach of policy makers, and instead demand a return to an old-fashioned view of family.

"There's a stigma of parents and children living together," Parks said. "In other cultures like in India, the families stay together and help each other. It's better for the economy, for the planet. It's more efficient."