A survey released recently by Wells Fargo found that Georgians are somewhat more pessimistic about their retirement future.
Many are living to paycheck to paycheck, taking on too much debt and facing the daunting prospect of relying primarily on Social Security benefits in their so-called golden years.
The numbers: On average, they've saved only $50,000 for retirement, with only 44 percent of those in the Peach State confident they will be alright in retirement. That's worse than the 52 percent national average.
Count Homer Shuler as one of the financial advisers in the Columbus area who believes it doesn't have to be that way. The first vice president and financial adviser with the local Wells Fargo Advisors office said small steps matter, although just getting started planning for the future often is the biggest hurdle.
Shuler, 56, a native of Atlanta who moved here in 1986, is passionate about working with people to help them reach their goals of financial security. He advises everyone from teenagers needing to set up a college fund, to those in their 90s wishing to maintain their cash flow until the end, to corporations that need retirement plans.
The Ledger-Enquirer talked with Shuler recently about his job, how his profession has changed over a quarter century, and basic words of wisdom for those spinning their financial wheels as retirement draws closer and closer. This interview is edited for length and clarity.
How did you decide to become a financial adviser or planner?
I went to Georgia State and took several finance classes and economy classes. And I worked for the Federal Reserve (internship) at the time I was going to school. So it all just kind of fit into my background getting into this business. When I first got out of school, I started selling computers. But when you sold computers, you dealt with one person and that was it. As a financial adviser, I get to work with lots of people.
So growing up you liked money matters and crunching numbers?
I always had a knack for it when I was in school, just studying about individual companies. Back then, living in Atlanta, there were a few starting up, like Home Depot. It was just interesting to watch a company start from the ground and work its way up to becoming a public company. We've got Aflac here, which did the same thing.
So what's the biggest change you've seen on the financial front through your career?
From our business perspective, what's changed is the variety of different investment vehicles. When I first got into it (in 1986), there were mainly just stocks and bonds and certificates of deposits. There were a few mutual funds. But over the last 20 years there's been this creation of all of these different products. Not that I'm product driven, but there are now about a thousand different financial investment vehicles.
I would think that can be confusing for people?
Exactly. Back then, the theory was you bought a good blue chip stock and you held on to it and you retired with it. Nowadays you try to diversify so that you can weather the ups and downs, like this horrendous market in 2008 where basically everything got cut in half. People that had the diversification didn't get (their assets) cut in half. They
weathered the storm and their portfolios are just now coming back to where they were.
Any other major changes in saving money?
Our parents might have had a pension plan. That's basically gone away. People are now retiring and it's left up to them using their own instruments, either a 401(k) or a 403(b). A lot of them are relying on Social Security as their only retirement, and that's not a good idea. ... What we try to do is get individuals to at least start looking at their employer savings plan and put as much as possible into those.
Describe the basic process in your job.
We sit down with an individual and work through what their goals are and how much longer they have before they're going to retire, and how can they get to that point or that goal. Then I create a financial plan or a road map, and I keep track of where they are. If they're doing really, really well, we might tell them to back off, they're taking on too much risk. If they're doing really, really poor, we might tell them they need to add more money to the account to get to their savings goal.
I try to touch base with them at least once a quarter. Clients have different needs. Some of them want daily activity. I talk to one guy every day. But that's not the norm.
Age plays a big part in it?
Age is a critical factor. Age and risk tolerance are the two things that you really have to be concerned about. (Start saving) the sooner the better.
Do you cater to particular demographics?
I have that kind of philosophy that everybody needs help. I know there are people in this business that have minimums and just cater to the high net worth. But I'm more of what I'd say a blue collar guy. I don't mind helping anybody.
What's a typical day like for you?
A typical day will be two or three appointments in the office. I do go out and visit people either at their business or their house. I lived in Atlanta, so I do have clients up there and I enjoy those road trips to Atlanta and meeting clients. I can do that in a day without any problem.
But coming into the office is kind of nice, too, because you have everything right here at your fingertips as far as what you need. We do have laptops that we take with us when we meet with our clients on our calls out in the field.
How long have you been using laptops?
It's been about two years. We're going to go to tablets probably in the next few months. Technology is changing everyday. It's made my job a lot easier because of the data storage and just going back to look at the history of an account and its performance. It's a lot easier and more efficient. We have programs that do this planning for us, after we put in all the (data). Then it steers us to make sure that we're still on track to what we're trying to accomplish.
What challenges do you face?
The biggest challenge right now is because of this low interest rate environment that we're in and people still wanting that income. People are tending to take on more risk than they're suited for. It's what we call 'chasing the yield.' They're going into, say, high-yield bonds, whereas two years ago if you talked to that same person, he would have said: No way.
So you've got to bring them back by saying: This is your overall profile. This is what your risk tolerance is. You don't need to be chasing this high yield, even though we're not going to make much money here ... That's because it's more important to make money every year than it is to lose money in any given year.
What is rewarding about your job?
The rewards are that you end up working with a client and they become a friend and they end up being a long-lasting relationship. Then you end up doing business with their next generation, and then with the generation after that. You almost become a family member. It's just very rewarding that they've done the right things and saved the money, and you see they're going to be OK in their retirement age, their golden years.
How did the recession change the game for retirement planning?
A lot of folks, in their mind, had equity in their home. So that was kind of like their savings account. That's kind of changed now. It hurt more in Atlanta than it did here as far as the real-estate prices. But now people are realizing they need to have equity in their home, and they need to have financial assets as well. They need to be saving. They need to have an emergency account in case bad times come ... to have some cash at their disposal. I think that's what it has taught people.
How are Columbus-area folks faring overall?
My sense is we're doing better than other parts of Georgia. I don't know the reason why. I do know that it helps to have Aflac and Fort Benning. But my overall sense is we didn't feel (the economic downturn) quite as bad as Atlanta.
Is it harder to save money these days?
Low interest rates do have their disadvantages. But one of the advantages is if you do have some debt, like a mortgage, we need to refinance. That's one way we can save some money. As far as the other parts of their budget, we sit down with individuals and look at their expenditures and how much money is coming in, and make sure that we've got money set aside to put in a savings plan every month.
I don't know if you've ever heard the rule, but people say you can skip that Starbucks cup of coffee that's $3 or $4 a day and put that money into a savings account. Well that adds up to $150 a month. Then it turns out to be some real dollars after a year or two.
Why do you think Georgians, as the survey suggested, are concerned about retirement?
I don't want to blame it on Atlanta, but I think it has to do with Atlanta real-estate prices going down. From my perspective, one of the things the study touched on is women feel a little bit more nervous about retirement than men. I agree with that from what I've seen in my practice. My take on it is it's the fear of the unknown. We have to sit down with them and show them how we're going to get to that place they want by using that planning model I talked about.
Just getting started saving can be the hardest part?
They need to develop a habit of saving. Just like when you want to start exercising and lose weight, you have to develop that habit. The hardest thing about jogging is putting on your shoes, and the hardest thing about saving is actually starting that process. Once they begin the process, they feel a lot better about themselves and see that they're going to get to their goals.
Is it ever too late to save?
The good news is the older you get, the more money you can put into these plans. They do have a (regulatory) provision for catching up, as they call it, for people who didn't save. But, no, it's never too late to start the saving process. You simply need to try to save more.