Why Your Terrible Retirement Is Don Draper's Fault

By Wes Moss

NEW YORK ( AdviceIQ) -- Why can't many Americans fund their retirement? Blame a fictional TV character -- or at least the spending mania he helped create -- and learn how to reclaim your budget and your future. Here's how.

Don Draper, adman guru of the series Mad Men, symbolizes my culprit of our widespread personal debt today: Relentless marketing creating a consumer culture founded on shopping, buying and spending.

Before World War II, most Americans saved prudently. Pent-up demand after the deprivation of the war years combined with America's emergence as an economic superpower to fuel new levels of affluence and a spending boom.

Between 1945 and 1949, Americans bought 200 million refrigerators, 21.4 million cars and 5.5 million stoves. In the 1950s, TVs flew off shelves 5 million a year as their prices dropped. An increasingly shrewd advertising industry drove much new spending.

The mad men ("mad" from the ad mecca Madison Avenue in New York) helped herd buyers to specific brands and seeded consumers' minds with messages of entitlement and promises of happiness, or both.

As Draper explains, "Advertising is based on one thing, happiness. And you know what happiness is? Happiness is the smell of a new car. It's freedom from fear. It's a billboard on the side of the road that screams reassurance that whatever you are doing is OK."

Despite mounting pressure to buy and buy, consumers controlled their spending for decades. In 1975, for example, Americans saved a record 14.5% of their disposable income.

Not so now. Frequently booming economies, easy credit, technological advances and globalized manufacturing swamp you with more things to buy -- cellphones, iPads and flat-screen TVs, to name a few. Often you afford them. Often, too late, you see you can't. Online shopping also makes spending $10 or $1,000 easy as a mouse click.

You likely give in to temptation, shucking your saver tendencies to consume and spend. In 2005, Americans socked away a mere 0.8% of their disposable income.

No surprise then that 28% of workers think they save enough to live a comfortable retirement. More than half (58%) of American workers have $25,000 or less saved for retirement. A stunning 37% of workers 55 and older save nothing toward retirement.

Your spending probably won't change when you retire, either. I recently heard of a retired couple fretting about the next 10 years because, as the husband admits, "We'd be all right if we spent less money. We don't need to spend as much as we do -- don't need this much house or all the stuff we buy... we just can't help ourselves."

You need not live like a monk, and I'm not calling advertising evil. Marketing messages drive a free-enterprise system that thrives when buyers make good spending decisions. I merely urge a return to balance between spending and saving.

Disposable income is exactly that: Money you dispose of on the goodies after paying all the bills and saving appropriately.

Check out my savings hierarchy plan and retirement calculator and bring balance back to your financial life.

-- By Wes Moss, chief investment strategist for Capital Investment Advisors and a partner at Wela Strategies, both in Atlanta. He hosts Money Matters, a live financial advice show on Atlanta's 95.5 FM and AM 750 News/Talk WSB Radio. His books are Make More, Worry Less and Starting From Scratch. He has appeared frequently on CNBC, Fox Business Network and on Atlanta-area television. He also writes weekly about personal finance in the "Bargain Hunter Section" for AJC.com, the site of The Atlanta Journal-Constitution. Connect with Wes on Twitter at @WesMossWSB and on Facebook at Wes Moss Money Matters.

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AdviceIQ is a network of financial advisors that writes insightful articles for the public about investing and wealth management. All articles are edited by AdviceIQ's editor in chief, Larry Light. AdviceIQ certifies that all its advisors have no regulatory infractions.