The Oncoming Train

| August 26, 2022

Bumper-sticker slogans prevent us from achieving our goals. You know the ones that I mean, the ones that come in 140 characters or less. Behaviorists refer to these as availability heuristics and they are often non-sequiturs. They serve an evolutionary purpose in that we need to have readily available responses when faced with danger.

When there is a rustle in the bush, we need to make a fast decision on whether to run or not. So, we use rules-of-thumb to know that it could be a tiger. Later we can use our deliberative minds to decide that it might have been the wind. In the modern world, we should often use our deliberative minds instead. I am sad to admit that I have sometimes resorted to trite expressions myself, particularly during my youth.
I used to say that “we never get run over by a train we see coming.” Cute. It almost sounds intelligent. Now that I am older, I know that we get run over all the time by trains that we see coming. Sixty-five years ago we knew how many people would collect Social Security today. The math necessary to know how much to save is relatively easy. Yet, here we are with an underfunded system. Likewise, the respected economist Alice Rivlin knew when her Rivlin Report came out in 1969 that we had an affordability problem in higher education. Yet, fifty years later, she admitted that “we unleashed a monster.” * As a young planner, I attended seminar after seminar explaining the importance of college planning because of exploding costs. The train ran us over anyway.

I had my own look under the hood when I served for several years on the board of a college foundation. We provided low-cost and innovative college educations for working adults, service members, union workers, and even prison inmates. I know that keeping costs down and giving people a leg up is entirely possible. Nonetheless, as planners, we need to focus on helping our clients make investments in human capital. As much as I dislike the Secure Act, it does broaden our ability to fund all types of education through improvements in what 529 college plans can be used for. It does allow us the flexibility to fund the education of those who choose to be welders or electricians instead of accountants or financial planners.

We can help. When we build or maintain financial plans for our clients, we need to use our deliberative minds to consider the tax and estate-planning aspects of investing for those we love. We do not want them to be run over by a train we see coming.

* Dubb, S.. "The Student Debt Monster: How We Got Here". NPQ, ´╗┐online, June 07, 2019. Accessed on 08.25.2022.