Keeping up with the Joneses

Keeping up with the Joneses commonly refers to our desire to have (or at least appear to have) the material wealth of our peers.  For at the heart of all social interactions is our desire to fit-in or belong.
It starts young.  Savvy marketing aimed at toddlers.  Pretty soon a sugary cereal in a bright box sits in your shopping basket.  In school, fancy clothes and designer shoes now compete with the latest technological gadgets.  As we mature, vehicles, trips, homes and other recreational items dominate.
An interesting twist on this theme is now being presented by Putnam Investments, the second largest provider of group 401(k) retirement programs in the United States.
In a recent article, Globe and Mail contributor, Ron Lieber goes on to state that Putnam has launched a new tool that allows users to see exactly how their savings totals and savings rates compare against other account holders who are similar in age, income and gender.  In addition, the tool models how an individual’s numbers would change if they set more money aside.
Call it, Keeping up with the Joneses-
in retirement
.
Sure, the investment industry would be a beneficiary of higher savings via higher investment fees.  However, it is also true that an individual is better off and more future opportunities available by saving more and consuming less.
How successful will it be?  The jury’s out but I anticipate that it will be of more benefit and interest to those that are already on their way.  Still, Putnam should be congratulated for addressing the very real problem of slumping savings rates.
It reminds me of a conversation I had with a client several years ago when he asked how he was doing in comparison to the average person.  I explained that I considered everyone I dealt with above average as many in society do not find the discipline to save beyond CPP and perhaps, home ownership.  I reaffirmed that he and his wife were above average in every category and more importantly, in control of their own destiny.
An interesting observation of those most on track to retire is they seem to be the same ones that continue to work past that date and in retirement live below their means.
Habits are tough to change.  Even good ones.