By DENNIS GRUBAUGH
How many hard-working Americans don’t look forward to retirement? Perhaps a better question is: How many can comfortably do it?
Mark Pettyjohn says many seniors step off that cliff without knowing how far they’ll fall.
“It’s not that people don’t have the answers,” he says. “They don’t even know what questions to ask.”
Pettyjohn knows something about risk. In 1996, he left a $350,000-a-year-job to become an independent retirement advisor. In the 20 years since, he has taught classes about basic finance.
About four years ago, some past students told him he needed to write a class on retirement. By then, he’d worked with over 100 churches and 200 businesses teaching finance classes.
“I looked around and there wasn’t anything in the marketplace,” he said. Knowing how many people were basically ignorant regarding retirement needs, he slowly began to develop a new course.
That led to the establishment of Retirement Peace Project, a mission-focused, nonprofit company dedicated to helping people find security in retirement. He had the savings to step out on the venture. Good thing, too.
“I made a whopping 12 grand the next year,” he said. He has since changed the business to a for-profit model to help grow the company, and it is working.
The core of the operation is a 10-hour course called Retirement Peace University. Pettyjohn, who lives just outside Springfield, Ill., goes on the road, along with other colleagues to bring the classes into various settings, from businesses to churches to libraries and various community spaces.
Last year, he and colleagues conducted about 60 retirement classes. This year, that number should grow to around 120.
The courses can be done in a couple of days or a week, depending on the preference of those taking the presentation. A lot of churches and businesses have been structuring it as a weekend retreat.
“It’s what everybody over age 50 needs to know about their health and money. If you ask older people what their concerns are, they’ll say, ‘health and money.’ ... The best financial plan is to stay healthy,” he said.
Pettyjohn said the host usually finds the site, whether it’s a church basement or a factory cafeteria.
“We’ve taught classes in engine bays with chairs. It’s not glamorous, but it works. You’ve got to go someplace where people are comfortable,” Pettyjohn said.
He wants participants to be comfortable knowing he’s not selling them anything. For $199 per household, families can learn information that could potentially save them hundreds of thousands of dollars during retirement. People are not asked to buy or invest in anything.
Pettyjohn does not consider himself an advisor. He calls himself an educator. And he’s got the credentials: For years he was national sales director in the investment division at Citigroup before he went out on his own.
Pettyjohn, who is 62 and could retire if he wanted to, believes in practicing what he preaches.
“I could have retired five or six years ago, but I’m having fun. My philosophy is, I’m going to go as hard at this as I can until I wear out. If you like what you’re doing and you’re passionate about it ...”
His latest career has roots back to 1992 when he wrote a class called, “What I Wished I’d Learned About Money in High School.” It was a three-hour course on basic finance.
“Through word of mouth we had 25,000 families come through it,” he said.
Retirement Peace Project is an extension of what he has done for more than 20 years.
“Retirement is about making good choices, and choices made in the absence of knowledge, many times, aren’t good choices,” Pettyjohn said. “Many people, in fact, are making horrible choices by retiring too early or without sufficient funds.”
Last year, more than 60 percent of the people who signed up for Social Security did it at age 62.
“What they didn’t recognized is that a lot of them are costing themselves a quarter-million dollars by not waiting a couple of years, or by structuring their benefits along with their spouses. We see people who build up a 401 (k) all their life and then pull it out incorrectly, pay 40 percent in taxes, and it’s like turning children loose with a gun: not a good idea.”
All of the information that Pettyjohn uses for his presentations is readily available, if people would take time to do the research. He’s spent the time — and sought expertise as well.
“We sat down and started writing a course. Early on, we invited co-authors to take the course and tell us how we could improve,” he said.
It took Pettyjohn three years to finalize the product.
So popular has the trademarked program become that the Catholic Diocese of Springfield is an official sponsor and has suggested parishes for presentations. The diocese has suggested two from Madison County and those details are being worked out, he said.
“We are also endorsed by the United Methodist Foundation and have done a lot of presentations for those congregations,” he said.
The organization is not religious affiliated, but churches have an interest in their members’ well-being, he said.
United Way chapters are also encouraging the presentation, he said. A majority of United Way’s contributions come from payroll deduction. And its top donors are now retiring.
“Part of our class is about giving to others; that’s one of the chapters that we teach. For the last 10 years United Way has been working on trying to figure out ways to stay connected to employees when they leave. They’ve figured out that if they sponsor Retirement Peace University, United Way is getting taught right in the class,” he said.
Employers are also starting to understand that financial wellness is “the next frontier in HR,” he said. The better off their employees, the better off the company.
To convince some employees to take the course he will give them the final exam first. If they can pass it, they don’t need the course. Few pass. But it gets people immediately thinking about their security. Here’s a sampling, a mind-twister for most people:
“What minimum monthly income will you require in your first retirement year?”
And another: “When is the optimum time to start Social Security benefits?”
The earlier people start asking such questions, the better.
“If you can’t pass a test like this when you’re 30, you’ve got 35 years to work it out. If you can’t pass it when you’re 60 and you’re going to retire in two years, you’ve got one or two years to work it out,” he said.
The difference between those who pass or fail the test is often $150,000 to $200,000 added to their financial holdings upon retirement, he said.
Pettyjohn and his colleagues have taken the retirement message around the Midwest, but not so much in Southern Illinois, where they are now looking to drive interest.
Some 78 million people are going to retire in the next 15 to 18 years, he said, making it imperative that people get hold of their financial affairs.
The course sessions touch on:
Personal health and medicine; inflation-adjusted income planning; investment alternatives; pension maximization; Social Security maximization; family financial relations; debt freedom; tax-reduction strategies; long-term care; housing options; estate planning; efficient giving to charities; and insurance efficiencies.
Section by section, students build a retirement plan while they are taking the class. They apply their personal situations to the theories involved. Everyone’s case is different.
“We take them from theory. This plan will show them when they’ll run out of money on their current trajectory,”
Even mortality rates play a part, he said. Men who quit working before 65 have a 70 percent higher mortality rate. Women, though, have no rate change.
Around 20-30 families maximum show up at the events. And Retirement Peace gets about 12 to 15 referrals per attendee, he said.
Rather than seem comfortable after going through the program, many people feel unsettled.
“But they have a way forward,” Pettyjohn said. “If people are comfortable they don’t change. Our job is to disturb them but give them an action plan to move forward.”
As he moves about the Midwest, he’s keeping an eye out for instructors and advocates to work the program, including in Metro East. He has about 15 presenters so far.
Retirement Peace is strictly noncommercial, he said. He said he is not selling anything except peace of mind. He’s even willing to give people “a scholarship” simply to take the program.