315: Women in Retirement: Improving Long-Term Financial Security Through Education & Advocacy with Cindy Hounsell
In today’s conversation, I’m joined by Cindy Hounsell. Cindy is the President of the Women’s Institute for a Secure Retirement (WISER), a nonprofit working to help women secure retirement income and educate people about the inequities that disadvantage women when they retire.
You may have encountered Cindy’s amazing work in a wide variety of publications, including The New York Times, The Wall Street Journal, Forbes/PBS Next Avenue, Barrons, U.S. News and World Report, CNN, CNBC, and NPR’s 1A, All Things Considered, Morning Edition and Marketplace. She’s also been named as an Influencer in Aging by PBS-Next Avenue, received a lifetime achievement award by the Plan Sponsor Council of America, and been named by Money magazine as one of its 40 Money Heroes..
In our conversation, Cindy and I dive into the major shifts in women’s finances and retirement today. We discuss the pros and cons of saving for retirement as a woman, how things are changing in the era of stay-at-home parents of both sexes, and what all women should know about creating a financial plan.
In this podcast interview, you’ll learn:
- How Cindy’s own experience at an airline that froze pensions inspired her to launch a career in retirement.
- What you can do for your children and grandchildren to help them become more financially literate.
- Why it’s so important to get your paperwork in place, no matter how good your relationship (or life) seems right now.
- What you should know about the retirement-related bills currently moving through Congress.
- What Cindy would like to see happen in the years (and decades) to come to empower women when it comes to their own finances.
- "A lot of women know that they have to be doing something for their retirement. They're all worried about it. But the other thing is that women don't take action because they put their family first. They put lots of other people first before themselves." - Cindy Hounsell
- "I have a financial planner and it's a man. It isn't just the maleness that women don't like. It's either they don't ask the right questions or they don't respect the situation." - Cindy Hounsell
- Women's Institute for a Secure Retirement (WISER)
- Follow Cindy Hounsell on LinkedIn
- WISER Women on Twitter
- WISER Women on Facebook
- WISER Women on LinkedIn
- WISER Women on Pinterest
- What Every Woman Needs To Know About Money And Retirement: A Simple Guide
- National Resource Center on Women and Retirement
- Going it Alone – A Guide for Widows
- Financial Caregiving Hub
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Casey Weade: Cindy, welcome to the podcast.
Cindy Hounsell: Great. Thanks, Casey.
Casey Weade: Well, Cindy, I was really excited to get introduced to you because you're doing some really amazing things in the women's retirement space, specifically with WISER, with Women's Institute for a Secure Retirement. And this is something that we encountered day in and day out in our business. Women either not being involved in the finances or actually taking over the finances. It seems like there are some major shifts going on when it comes to women's finance and women's retirement today. And you have made this, boy, almost a life's mission it seems. You've been doing this for about 25 years. I was wondering right off the top, what is it that makes you so passionate about women's retirement issues?
Cindy Hounsell: Well, I'll start with the long story short. I worked for a company for 15 years and I was involved, it was an airline. I work with the union and whatever. And they froze the retirement plan and it was one of the first ones to be frozen. So, this was back in the 80s. My fellow colleagues thought that the company was trying to hide some big thing from us and nobody would tell us what it meant to have a frozen pension. And so, I started asking around, asking around, and I was friends with a bunch of the lawyers over at the airline office, and none of them could explain any of it either. So, at some point, that just sort of stuck in my head and someone said to me, “Get out of this company because it's not going anywhere. It'll go out of business,” which it did. “And you're young enough. You can do something else.” So, I went to law school. I ended up getting a fellowship to Washington, and I thought I'd be here a year and I've been here like 32 years. So, it just shows you how those plans evolve. And so, I kept asking about it. And even when I got my fellowship, you had a choice of what you wanted to work on. So, I chose retirement.
I figured maybe I'll find out. You know, I'm going to put that pension in the freezer. And I guess when I'm 65, I'll take it out. I don't know. Nobody could explain it. And so, because it was one of the first pensions that was frozen, defined benefit plans that makes a big impact on your life especially after 15 years. And so, luckily, I was young. There were a lot of suicides. People lost their homes. I mean, I can't tell you the horrible things that evolved from a lot of that. Anyway, so I decided, well, let me learn about this. And then when I read a study right away as part of my fellowship, and it said that basically most of the baby boomers were going to be poor. By the time they were 80, they would have run out of money. Their Social Security won't carry them through. And I'm thinking, "That's me.” I said, “Oh, look, all is that they're talking about?” You know, I got divorced, you know, all these things, didn't have a pension anymore, really. So, it just grabbed me. And I remember when I kept going to Capitol Hill and I got a grant to start WISER.
And what was really funny was there was a famous feminist that came up to me. She'd heard about me and she said, “You're going to have a whole like organization around retirement?” as if it was just like a little dot. And I said, “Yeah, I know, it's a little crazy but what can I say?” So, anyway, that's how I sort of got started. And back then it was a wasteland. There was not one like fact sheet. There was nothing. I mean, the General Accounting Office did studies about the poverty among whatever group was in poverty at that point but nobody was telling the people. So, anyway.
Casey Weade: Well, they have this focus for so many decades that you have on women's retirement. You know, I often find that takes passion, right? That takes a real passion, a deep seeded passion, something that maybe came out of your childhood, things that you learn from your parents, maybe your mom, your grandmother. What did you glean from the women in your life?
Cindy Hounsell: Well, I mean the women in my life were a generation of women that didn't work. They stayed home. You know, they weren't paying any attention to money. You know, I learned from my dad who always worked two jobs. And so, I understood I think from an early time my mother had a lot of health issues. And so, he went back in the military basically to get her health care in the 50s. And so, that's how I learned about money is like pay attention, don't pile up a lot of debt. That was never anything that he would do but have a good time where you're going. You know what I mean? The one thing I remember, my dad had a great sense of humor. It was the end of the month and he had like $8 or something. My mother wouldn't need anything like this, so it was like we were going to the Chinese restaurant in the neighborhood after he gets paid, like come first. So, those kinds of things just reminded me about like you just have to be appropriate with your money, like wherever you are and know what you have. And most people know what they have. They want to pretend they don't know what they have but they know what they have. If they have nothing, they know they have nothing so they don't want to talk about it.
Casey Weade: What are some things that you do for the youth in your life to help them build a higher level financial acumen that maybe some of the parents or grandparents listening could be doing for their children and their grandchildren?
Cindy Hounsell: Yeah. Well, I will say that today we're having our college challenge event and we don't spend a lot of time with people talking about their grandchildren. Like our focus is there is a huge swath of people that like are not prepared for retirement and they're in their fifties and sixties. And so, no one sits around and says, "Let's help all those middle-aged women that not like found the tools that they need to get going.” And that's been a big part of our focus. So, a lot of times what we're telling those women is stop giving money to your grandchildren that you don't have. You know, they can get scholarships. No, don't sign away on their school loans because nobody else will do it. Their parents won't do it. And you're going to do it and you have the least money? So, I try to bang their heads a little bit about putting yourself, realizing that you may live to be 95. You're a planner. Every year that you live, they tell you, you got to save more money because you're going to live longer, you know?
Casey Weade: Well, easier said than done, right?
Cindy Hounsell: Yeah.
Casey Weade: It's easy to say those things but when you're that parent that sees your children struggling, it's so hard not to help.
Cindy Hounsell: Yes, and you can help but you don't have to become a martyr like grandma. So, when grandma runs out of money, who's going to be…? You know, I always say that to them, “Who's lining up to help you?” Just think of how the line is. Like, outside your door when you don't have any money and you need help because that's how most people end up in their eighties and nineties. You know, you need help, right? You need help at home. So, who's helping? And it doesn't mean you don't love people. I think it's having a reality check.
Casey Weade: Well, and often what's not recognized is by helping them today, you are burdening them tomorrow with the help that you're going to need down the road as a result.
Cindy Hounsell: Right. And I'm just saying, the numbers are there. You know, your readers wouldn't want to read this. They think they were boring reports 50 pages or something from the Government Accounting Office talking about why women don't have money and what they're going to need. And so, I also try to convince people and one of my funniest stories was, I remember, "Get a second job. You know, you have debt. You don't know what you're doing. Get a second job. You'll hate it because you don't want to work any more than you are.” And I had someone who was a cameraman like for a show that I did. He got his mom, he told his mom, showed her the tape and all this. She found a job three nights a week at an insurance, I mean, at a furniture store. And hardly anybody came in, Monday, Tuesday, Wednesday. So, she was getting paid and she could a lot of times sit on the couch and just like do - she went back to school. And so, the joke was I said to her, "Would you rather be working when you're 85 for your medication or looking for a job? Because we have a lot of people that do that as well.”
Casey Weade: Well, let's get back to WISER for a moment. When we look at WISER, I think it seems fairly self-descriptive, right? A women's institute for secure retirement. But what would you say is the purpose of WISER?
Cindy Hounsell: Well, to give people the information a little bit of what I've been telling you, to wake up and start doing what you need to do, figuring it out. It's not that hard. And you know that if whatever you're living on today, if you're 65, you're going to need a lot more than that by the time you're 85. You know, I used to worry that people didn't know enough about inflation. I think I can cross that off my list. You know, it's like you turn on the TV and try to find a show during the day that won't be talking about inflation at the moment. So, people will understand that. But how it relates to them personally, they're learning at the, you know, unfortunately, they're having to learn at the gas pump and the grocery store.
Casey Weade: Well, I'd like to ask what WISER does specifically but maybe in order to do that, we can ask a different question. That is, what have been the biggest strides or some of the proudest accomplishments that you've had come out of WISER?
Cindy Hounsell: Well, because we reach the audience of underserved and under-resourced women. That's the punch line. And so, with that, we operate the National Resource Center on Women and Retirement. That's one of our biggest projects. And we go to a lot of conferences, we have a lot of partners where people know nothing about finances. They don't have access to financial planners. And that's where we reach them. So, we have a niche that people are always interested in hearing about, especially in Washington from congressional hearings, etcetera, because we have the people that are actually in the situation where they maybe took care of their older relatives or they did caregiving, and now they don't have enough money for themselves. So, we explain all of that to people like these are the barriers for women. This is what you're going to need to do. Hopefully, you'll be able to get like financial counseling in your local community, of which there's a lot now. There used to be not very much of that but that's grown over the years.
Casey Weade: Well, it seems like these conversations have most likely become easier. People are getting more interested in women's retirement finance issues. However, that wasn't necessarily the case back in the mid-90s, right? I mean, what was it like back in 1996 to start gaining some traction?
Cindy Hounsell: I mean, what's really funny is that in ‘96, ‘98, I think it was Fortune Magazine wanted to do an article because Oppenheimer had done some woman study that was one of the first ones. And they were looking for five that were clued in, five companies. We were the only nonprofit pretty much other than AARP but they didn't do very much on this at the time. And so, they couldn't find five. I mean, they had to put in a few people who had written books about divorce or something. So, that just shows you it was a wasteland. But what's also interesting is that there are so many women over the years that have written to us who we had a homeless woman who was living in her car and she somehow got a hold of our newsletter from somebody, and she read this whole article and she just decided, "You know what, I'm not living in my car. I'm going to do what I need to do. I'm not feeling sorry.” You know, she was victimized in many bad ways.
And so, I think there is room for people to grow if they know that this is something that someone's going to be saying, "Don't give all the money away to the grandkids. Don't buy all the Christmas presents and have like new debt added on to old debt that you can't pay already.” Someone needs to say that other than Suze Orman yells at people. She's good at doing that. But a lot of people don't also want to hear that. People say to me all the time, "Just tell me what to do.” That's what they want help with. It's complicated.
Casey Weade: Well, and outside of the wage pay gap, that seems like the biggest issue that often comes to the forefront is the pay gap between men and women. But beyond that, what are some of the biggest disadvantages that women have when it comes to retirement specifically?
Cindy Hounsell: Yeah. I mean, it's caregiving. That's huge now. I mean, that is almost like the number one topic when employers talk to their employees about like what are the issues for women? It's also caregiving causes a lot of women to stay out of the workforce for periods of time. You know, I always say the pay gap is one thing. And it's not that it doesn't matter but here's something I find interesting. I go to a conference where there are a lot of basically median-income women like they’re earning in the 40s or maybe 50. And a lot of older women and there's 100 something women in the audience. So, these are workers like that help Meals on Wheels or they do programs for elderly people. And I say to them, "How many of you have a retirement plan?” Nope. Nobody wants to hear about it. All they want to talk about is the pay gap. And I said, “Well, that's nice. There is a pay gap. I was suffering through it most of my life but it didn't prevent me from saving. Once I figured it out, that I better skedaddle here and like hop on it because I already lost 15 years with that other frozen in the freezer pension.”
Casey Weade: Let's talk about the pay gap for a little bit. Why do you think there is a pay gap? There could be some obvious reasons there but what are some maybe other nuanced reasons and maybe even further beyond that, what could women do in the workforce to decrease that?
Cindy Hounsell: I mean, look, those issues are complicated because, in the old days, when the pay gap first started and I know the widow of the man who started doing the lawsuits, it was pretty easy. You and I are doing the same job and we're sitting at a desk next to each other and you have children and I'm not getting paid what you're getting paid. I mean, it was easy. You know what I mean? Those first lawsuits were so blatant. It's much more complicated today. And so, I think so many more opportunities for women that when I was getting out of college just amazing opportunities. And it's if you can not getting stuck and realizing that you can do something about your situation. Because in my lifetime, is it going to catch up? I don't know. It's $0.82 on the dollar right now but not everybody is making that $0.82. You know, that's the math there. And so, I think it's hard because it's the occupations that women work in. Look at all the nurses that are leaving now and they get paid much better than they ever did. That's been one of the occupations that women finally were getting paid. They're not becoming millionaires but they were getting paid a better wage than the average schoolteacher was even.
So, it just depends, I think, where you work, what you're doing, whether you have a plan. If I had never left that company and I'd never gone back to school, I'd be in trouble. I know that. You know what I mean? I was living in a really expensive city so I moved someplace else. It was much cheaper. I could buy a house, all those things. And those situations changed. That construction doesn't help a lot of women today but I heard yesterday that the prices of houses are going to start shooting down. I don't know if that's going to make people that just paid a lot of money for houses happy but it just means more people will be able to buy homes at some point in the near future.
Casey Weade: Well, it seems like there's a lot of focus on the disadvantages that women have around finances, investing, money, retirement. However, I've interviewed a lot of strong, powerful women that have shared, “Well, women have a lot of advantages at the same time.” What are some of the advantages in your mind that women have over men?
Cindy Hounsell: Well, I think they're educating themselves more than men. But it's the family issues that still drag women down. And it's not that I think every woman in the country is poor. A lot of the women that I've helped over the years were financial planners. They became my sisterhood because when I first was going out there talking about it, I was horrified, like, really, I don't want to be poor. I don't want everybody else I know to be poor either. And yet that's where the statistics were. And you would hear from the expert researchers, well, it's always been like that. Well, we kind of have to do something about that. And that I think a lot of women know that they have to be doing something for their retirement. It's one of the top things they talk about. They're all worried about it. There are more confident women. But the other thing is that women don't take action because they put their family first. They put lots of other people first before themselves.
Casey Weade: Well, Cindy, I think you're due for another booklet around what women need to know about their finances. You released one back in 1998. What Every Woman Needs to Know About Money and Retirement: A Simple Guide. And now that it's been over two decades, what new information would you add to that to provide further insight to that issue?
Cindy Hounsell: Well, basically, that booklet still stands up and we still use that, interestingly enough. But as I said, it's the caregiving. It's the staying out of the workforce. It's putting your eggs in someone else's basket, divorce. Divorce is much bigger numbers than there were in ‘96, obviously. And it's also being smart about it and taking charge. A lot of women that we know that are in trouble come because they've given up the pension. They kept the house. I'm sure you know a lot of those stories yourself. And so, we try to get women to make better choices again. And I have to be careful because there are certain populations. You know, I remember being on a Native American reservation in Montana probably in the early 2000 and not talking the way I'm talking to you like, "Don't give money to your grandchildren if you don't have it.” But just saying like you want people to stay on the reservation. These are the things you have to do and do for yourself and blah, blah, and everything. And somebody stood up and said, “Yeah. But our whole culture is built about giving all our money away to our children. You know, what do we do about that?”
Well, it depends on your children, I guess, and what they're doing and whether they're going to school. You know, everybody has a lot of those issues. But I think you deserve to have food on your table when you're in your eighties and nineties and not have to be begging for it from other family members.
Casey Weade: And then it's personal but it's cultural at the same time, this idea of caregiving that there are many more men that are becoming stay-at-home dads than ever at any other time throughout history. If someone wants to be that stay-at-home person, I've got a close friend of mine who is now earning a little bit more. Now, his wife wants to be a stay-at-home mom, and that's what she's always wanted to do. She wants to be a stay-at-home mom. She doesn't want to work. She wants to take care of the household. What would your advice be to her as she enters that stage?
Cindy Hounsell: I would say redo that family budget and that there's an IRA that you can be funding every year for yourself. You know, the family, make that part of the budget. That's what I would do. I think that's important. I mean, a lot of women don't know about that but that way, and it sounds pessimistic, I'm very optimistic about people's lives and all of that. Sometimes people end up being greater friends and better parents when they do get divorced. Stranger things happen. But you need to take care of yourself. If you're putting all your eggs in somebody else's basket and you're not earning, everybody needs to be saving money for themselves. So, part of the family budget can go into that IRA.
Casey Weade: What about the level of involvement and the finances and the financial planning itself? You know, in this instance, she has no interest in the finances. She says, “Zack's going to handle all of the finances,” or, “Eric's going to handle all of the finances. So, I want my husband to handle these things. That's his world, not mine.” Is it practical for a woman to think that they can rely on the man in their life to take care of all their finances?
Cindy Hounsell: Well, I think they can if they're piling it up in the IRA. That's what I think because then you have something to fall back on. I've just seen too many women and women that were part of the financial industry or the insurance industry going through a divorce and not even having like the basic to go get a lawyer. You know, they don't come for you. You have to put down some kind of a retainer when you even get a divorce lawyer. So, the point is, you never want to be in that situation. And you love somebody. You're married. You know what I mean? You do it now just like you should be planning a guardian for your kids. Nobody wants to do that. But what if two people get in a car accident and something horrible happens? You need to have your paperwork in place. So, we try to tell women in that way that you're really just being prepared.
Casey Weade: The men in their life can be doing all that preparation. It can be assisting in making sure that there are assets being set aside, the estate plan is in place and all appropriate documentation, etcetera, is all taken care of. But is that okay? You know, does the woman not need to be involved in that planning? Do they need to come to the financial planning meetings with their advisor? What are your thoughts?
Cindy Hounsell: Yeah. No, I think they should be there. I mean, I know those stories too. A lot of women go, “I don't care. He’s going to take care of it.” But we also did this booklet about a year-and-a-half ago called Going it Alone and it's like about 20 pages full of like what you need to do when you are older and you're widowed and like all the different pieces you need to know about. Like, if you were looking for the pension like me, if I had a spouse who was looking for the pension, where would you go to find that? You know, like I know she had some kind of a pension there. I don't think it was very much but that kind of thing. So, eventually, you're going to have to deal with this. So, you need to know, at least go to those meetings and not be reading your book. I've heard those stories. I want to just, whatever.
Casey Weade: We just had one of those. There was a gal that was in the meeting. He dragged her to the meeting. She didn't want to be in the meeting. And she was playing a game on her phone for an hour during the meeting. The whole time she's sitting there on the phone playing some game, Words With Friends or something, and we went, “Oh, we want you to get involved,” and he desperately wanted to get her involved as well. He wanted her in the conversation. And then she leaves and he says, “How can I get her more involved in the conversation?” What would you say to him?
Cindy Hounsell: Look, you can only do what you can do. I mean, I think it's a credit to him that he's like bringing her to the meeting. And I would be furious if I were sitting there with somebody playing games while we're paying for this, you know? So, I mean, it is, it's ridiculous. I have one cute story that I love is we had a grant from FINRA at some point to do a project on nurses. And so, we trained nurses to do like the programs that we do in six states. We had these two nurses up in Maine and they were older and so they would have like parties. The nurses will come to their house and then they would practice doing the thing, whatever, the WISER program. And the funniest thing was one of the nurses, her husband started leaving her little articles from the Wall Street Journal on her pillow because he'd been waiting his whole life for her to ever have any interest. And now she was speaking the language. She was asking him questions and all of that.
Casey Weade: Subtle cues, right? We don't necessarily have to be overt. Just drop those things and send a podcast like this right there. Drop an article on the pillow. That's fantastic. Now, are there some things that you believe a woman should expect from their financial advisor? Maybe they’re different than what a man might expect?
Cindy Hounsell: Well, look, I think it's a matter of experience and I think people don't want all the lingo. And I say that all the time, you know what I mean? Like, there's always new lingo. And I do a lot with the industry and there's always some new thing coming up. And being a headline, I have to go look and see what do those initials even mean. And it wasn't a headline in a place where real people I never even heard of it. So, the point is plain language, telling people what they want to hear like, "Am I going to have enough money? What are we doing here? You know, what does a financial planner do for you?” And I have another quick story. If I'm doing too many stories, tell me. That's bad. But I had family come out during the pandemic to visit me for a funeral in the area. And so, my cousin's wife was telling me that she really disliked the planner, that they just thought her husband, who doesn't know one-third of what she knows, my cousin. He said, "Oh, he's a really nice guy.” It's the first client so he's telling her she's already got three pensions and he's telling her to take whatever her cash account is and put it in an annuity. So, she was furious. You know, she said, "He never listens to me.”
I'm just telling the story about whether you wanted to do it or not do it is fine, that decision, because people make up their mind or they hear something, they want to do it. Look, that's their lesson that they're going to have to learn if they won't listen to anyone. But the point was that she had enough money coming in with her Social Security, with these three pensions because she worked in different hospitals for periods of time. She was retiring at 68. So, anyway, the point is that young person probably didn't have enough experience for her needs. So, she wouldn't go to any more meetings with him. And finally, they got somebody else.
Casey Weade: So, look, for someone that has not just experience but someone that can actually speak the language, right, someone that can simplify some of these complex topics.
Cindy Hounsell: Right. And I’ve always, believe it or not, running a woman's organization and all that, it's like all my doctors have always been men. You know what I mean? It's like I have a financial planner that was assigned to me because of where my money is and it's a man. It's fine. You know, I think if that person talks to you and understands, doesn't matter, you know what I mean, to a lot of people. It isn't just the maleness that women don't like. It's either they don't ask the right questions or they don't respect the situation. Maybe they're taking care of the mother and the mother-in-law. Nobody's talking about that. Where's the money coming from, from doing that, getting home health care to take care of people in different ways? So, that's the biggest complaint I hear from women is that they're not listening or they're not in tune. And here's what else is interesting. When I've done, for different companies, I've done sessions like an hour session on caregiving, it's almost all the men that sign up. All the financial planners are men. You know, there's maybe six women.
And maybe because the women already know all those issues because they've been dealing with it with their family or whatever. But the guys, they listen and they pay attention, and some of them I might stay in touch with. And they're happy to tend to know what they need to be doing. They want to help. They're in the business to help people.
Casey Weade: Sure. Well, let's talk about some of the things that are happening in Washington right now, some of your major initiatives. This past March, you spoke before the U.S. Senate Committee on how to improve retirement, enhance strategies, particularly for women. What was the biggest takeaway that you hope to relay from that hearing?
Cindy Hounsell: Well, I mean, I think one of the issues for that and by the way, right now, there's a markup on Capitol Hill this morning, a lot happening on this day. And three retirement bills are being squished into. You know, the two committees will have to get together, the House and the Senate, to change. A lot of the provisions are the same, I mean, are similar in these three bills but they're going to have to be like merged together. And that's going to probably happen and that bill will pass before the end of the year, I'm pretty sure. But I'll use a simple example is that like there's a bill about getting part-time workers into the retirement plan where you work and that there are numbers there on how many women will be helped. And a lot of times, part-time workers don't stay three years. So, it's been moved down to two years. But a lot of the younger people, they just change job-to-job. You know, they're like a long-timer if you can get them for two years. So, it's pieces like that that can actually help a lot of women because women are twice as likely as men to work part-time.
Casey Weade: Well, you've been a big advocate specifically on one particular issue that I've seen you talk on a few times, and that is rollovers, 401(k) rollovers from a past employer. Can you speak to that for a moment?
Cindy Hounsell: Yeah. Well, there's something called auto portability. And I think it will happen because a number of the big financial industry firms are like behind it. And it would put like, I don't know, $1 trillion to $3 trillion back in the retirement system instead of having people change a job. The rollover process is not easy. I know all the advertisements say it's easy. It's not easy for the average person. You know, it's difficult.
Casey Weade: We're talking about automatic portability here, right? So, let’s say I have a job...
Cindy Hounsell: Right. But the companies have to be willing to do it, you know what I mean? They have to adopt the auto portability.
Casey Weade: And does that mean when I leave an employer where I had a 401(k) and I come into a new employer, sign up for their 401(k), my 401(k) will automatically transfer over without me having to do anything?
Cindy Hounsell: That’s what would happen. Yeah. It’d be like Social Security. It would be like a smooth...
Casey Weade: And what if I don't want to do that? I can see this being an issue for some.
Cindy Hounsell: You have to sign the paperwork saying that you want to do that anyway. I mean, the employer has the opportunity to do that and you can. And a lot of times what happens is people lose track of their, you know, they don't even remember like they didn't think they had so much money. Sometimes people don't even know they're in the 401(k) because they were automatically enrolled. So, then they cash out, then they have to pay taxes. You know, it's not fun when they find out they have to pay taxes, believe me. I discouraged a friend who was turning 70 and retired and his 401(k) had been going down since January 1st so he said, “I'm just cashing out the whole thing. I don't care.” He had more money than he should have to be cashing out. And I said, “Well, want me to tell you what your tax bill is going to be?” That discouraged that.
Casey Weade: And to me, this seems like a minor issue in the grand scheme of things. I can roll over my 401(k) to another employer. I can roll it out to an IRA. I mean, aren't there bigger issues?
Cindy Hounsell: You know all those things. We're more concerned about all the people in the middle that don't know any of that, who just like cash it out. And, look, having somebody like be able to build an account or to have an account like at the new job, taking the old money, putting that in, and having it grow in one place. I mean, if you're the person that's investing the money, you may not like it as much for the situation but it makes a huge difference.
Casey Weade: Well, I can see it making an impact. There's no question about that. It seems like this is just how things go in Washington. You know a lot more about how things go and turn over and get created in Washington than I do. But it seems like we set out with these big initiatives and they turn into something much smaller at the very end of the day. I imagine this for you. You go, "This is very impactful.” But I bet there are some higher-level things, some big goals that you have for WISER and missions that you would like to see accomplished in Washington.
Cindy Hounsell: Yes.
Casey Weade: What are some of those bigger things that you hope to see down the road?
Cindy Hounsell: Well, I mean, the thing is that everybody would have some sort of a benefit at their job. That's the biggest thing of all because we have half the workforce with nothing. And nobody wants to hear me come out there. When I talk to large groups of people, they don't want to hear, "Oh, like half the workforce doesn't, you know.” You have to talk to people in a more positive way. And it's also interesting to me because I don't expect that every employer has to solve the problem that either the government, either that there should - everybody has tried to talk about this since ERISA was passed, which was in the 70s.
Casey Weade: 1974, yeah.
Cindy Hounsell: So, we haven’t solved it yet. So, I let myself off the hook that I may not be able to accomplish this. So, what I can do is tell these women what they need to do. They either need to have a Roth IRA. They need to do something. You know, they need to find out what they have on the job. And a lot of times women ignore that. They don't even know that they have that.
Casey Weade: Well, it's probably two different types of people that are listening. There are some that want to get involved in the issue. And to further your mission over at WISER, there are others that say, “Oh, I really want to get started and better getting a grasp on my personal finances.” What are the good first steps for those types of individuals?
Cindy Hounsell: Well, I think, look, a lot of the problem is finding a place for them to put the money. And that may seem absurd to somebody like you who does that for a living but it's not easy. I mean, everybody thinks it's so easy. Oh, well, they can just… Yeah, well, they can just. These are not people that know how to do this. That's what we try to do.
Casey Weade: Let's talk about that for a moment because, I mean, I've had that reaction, right? So, they came up with the whole IRA for everyone, right, the RIRA. Okay, great. Now everybody can open an IRA. Well, everybody can already open an IRA. Just go to your bank or hop online, open an IRA. What could be changed that would make that easier? Because we're always going to have to take action to open those accounts, right? Is there some method that you're thinking of that would automatically open retirement accounts for everyone, say, when they're born?
Cindy Hounsell: Yeah. I don't love that either for some reason, It's a very expensive possibility. I mean, there are a lot of people that want that, you know what I mean, the IRA, whatever. But it doesn't help my middle-aged women that have been raising kids and doing all sorts of other things. It doesn't help them.
Casey Weade: It's kind of like Social Security, right? I mean, we expected Social Security to be that tool.
Cindy Hounsell: That is a big part of it. But let me just tell you the MyRA story and what happened with that. So, I heard this from the industry but that's because they don't know that I want to give them some of these women and say, "Yes, take this woman.” When I ask women at a session, I'll name three big companies and I'll tell you this when we're not on the air. And does anybody ever know about these things? No. They look at me like, "No, never heard of them.” And what the industry people will tell me is that's because they don't watch enough football games or something. That's where the advertisements are. Now, there are more financial. I think there's a lot of everything on there. There's more on the Internet. But here's what with the MyRA, no fees and it was an automatic sign-up. You could take your money and instead of spending it or paying taxes or whatever, you could put it in the MyRA. The problem was that there was a lot of dissension about that from the beginning. So, in the Treasury Department and the government agency or like any agency, some people wanted to see it succeed. Some people didn't.
I had been suggesting, hold a meeting at the Treasury Department, get all the nonprofits in DC that don't have anything that they're offering to people who work there for a long time, and tell them about it and they'll sign up. Because we used to get people to sign up for I bonds like back in the early 2000 when that came out because the interest rate was pretty high, just like it is now. And then Wall Street was buying up the I bonds. And then none of my women, nobody ever heard about it, you know what I mean, at that point because it became a high-level item, just like you're saying. So, it's just the world we live in. I don't get angry of bad actors or whatever. It is what it is. We try to keep the grandmas from getting scammed of which that's another huge issue. And if people can preserve that $5,000, if I showed you statistics, I could convert you. But you'd have to read all those boring statistics about who doesn't have the money, who spends it. That's why auto portability is really, I mean, I was able to convince a lot of people that they'd be like, say, $5,000. Like, really? 5,000? What's that going to do? For a lot of people, that's like having a million dollars in the bank. They never have that.
Casey Weade: Well, let me finish with a couple of philosophical questions here. What do you hope to see as absurd 25 years from now?
Cindy Hounsell: Say that again. I'm sorry. You dropped.
Casey Weade: If we fast forward 25 years, what would you hope to see as absurd?
Cindy Hounsell: You know what, I would hope that people just like automatically say that's like Social Security and you've got some other account, you know what I mean, that is saved for retirement and it supplements it. That's all.
Casey Weade: It seems like that's the major initiative for you, right, is to get people saving and that is done through education and then some of these other tools that you're trying to get in the hands of beginning savers.
Cindy Hounsell: Right. And here's the interesting thing. I've done programs in D.C. with inner city kids and I love this. And so, I go with like one of my colleagues and we talk to these kids about, "Look, you're getting your GED. You're going to get a job,” because they like help these kids get jobs. And this is what we're here to tell you when you get your job, whatever. I show them the chart. You know the chart. You start saving in your twenties, 2000, whatever. These kids are a riot. What people spend on 401(k) education, like these kids could say, "We'll tell you how to do it in about 2 minutes. Show that chart. Tell us what we're supposed to be looking for in a job.” And I've seen so many good success stories. Kids will come back to me and say, “Hey, my cousin works at the Water Department in D.C. He says they got one of those K things you were talking about. He can get me a job.” “Yeah, get you a job. That's your first job. You go in, whatever.” I'm saying it's like people don't know this. They don't sit around the table. Their family doesn't tell them like what to do.
So, I get enthused about that because I met this kid one day on the metro who is saying to me that he's got a couple of thousand dollars. He's going on the longest train ride into Virginia but he had the information and he's telling me how much he's got in his 401(k). He’s tapping my leg like he remembers me, sees me, you know. And I'm looking at him like here's this young kid tapping my knee. He's trying to get my attention because we're sitting close together. Anyway, it was a great story. I love it, you know what I mean, because that changes his life and he knows it.
Casey Weade: Sure. Well, you're changing lives and you have…
Cindy Hounsell: Yeah. One person at a time. And I'm not telling it for that. I'm really saying it for more that I've also had the young man on, and it's a true story, financial habits, one of these like apps that you have on that you can sign up and get a Roth IRA. He was at Goldman Sachs. He graduated from MIT. His father graduated from MIT. He was never in the 401(k) like somehow either with the paperwork, he never paid any attention. He didn't know. He never signed up. That's why he started that. And it was unbelievable because everybody, all his teammates are sitting around talking about how much money they just made in the stock market. He doesn't know what they're talking about. So, that's what I, you know, I don't want people to take for granted. I'm saying like there are millions of people out there that didn't go to MIT that don't know any of them.
Casey Weade: But you obviously have a lot of passion around the subject. You're living a life of purpose. You can see it in your face. What does retire with purpose mean to you?
Cindy Hounsell: Well, being successful and being able to go to the store and buy like what you need to buy. We live in a capitalist country, right? So, you need capital. You need to have money to pay for what you want and your medication. You know, I always say by the time I'm in my eighties, I'm going to really be cranky. And so, I'll need to be able to pay for those cranky pills, whatever they'll give me.
Casey Weade: That's great. Well, Cindy, thanks so much for joining us here. What are some resources that you could give back to the audience where they might be able to dive a little bit deeper?
Cindy Hounsell: Well, I think we have a great website because people come to it because they want to find what they want to find, divorce, widowhood, whatever. And so, WISERWomen.org is the website. And then we also have an info@wiserwomen, which means that people can write to that and we can get you an expert and get you help. And the other thing since I did babble about that, the Financial Caregiving Hub is new and we have a lot of information about that, about how caregivers can take care of themselves while they're taking care of other people because a lot of times they leave their job, give up a lot of benefits, don't pay any attention to that. Just go to the emergency of taking care of the person that needs to be taken care of.
Casey Weade: Well, you're clearly already and going to continue to make a big impact on a lot of lives. Thank you so much for joining us here on the show. Cindy, we'll make sure to drop all of those resources and links right in the show notes. You can catch it to RetireWithPurpose.com. Thanks, Cindy.
Cindy Hounsell: All right. Thank you.