Preface

Five memories, inflection points and incidents laid the foundation for this book:

1. My oldest retirement memory: I was about 10 years old. I joined my grandfather at the bank. With a proud 'I got my retirement cheque', he gave me 10 dollars (they were called 'Deutschmark' at the time) extra pocket money, and we went for ice cream.
2. The best investment: As my father sold his business and retired at the age of 60 years, he contributed a significant portion as a single payment to the German pension in return for an additional handsome indexed immediate lifetime pension. For 27 years, this paid for his living expenses while his grandchildren benefited from his normal retirement and savings.
3. A fantastic brain: My youngest son had a stroke at birth. His brain was almost wholly rewired, and he recovered. This sparked my interest in neuroplasticity and human and brain evolution.
4. Meeting a Nobel Prize Laureate: In 2016, I attended and spoke at a board meeting in Chicago. A local professor with some interesting perspectives on behavioural economics was also attending. As an ignorant attendee, I asked some questions, which became an excellent discussion. The professor turned out to be Richard Thaler. He laid the foundation for my interest in behavioural economics in retirement and all ecosystem participants. I absorbed publications from Daniel Kahneman, Dan Ariely, Sheena Iyengar and others.
5. The Laws of Human Nature:1 In December 2022, after a board offsite in a great restaurant in Boston. Gaby, one of the board members, gave me this impactful book recommendation. As I recently started listening to audiobooks, this marked the inception of devouring one to two audiobooks per weekend while walking around Washington, DC. I read as many great authors on behavioural economics, psychology, culture, decision making and evolution as possible. This provided ample food for thought.

The other vital ingredients come from practical experience working with many of the best minds in policymakers and public and private sector organisations globally in the pension, retirement, investment, life insurance and financial advice ecosystem. More than three decades of hands-on insights and mistakes across more than 30 countries and cultures leave deep impressions.

All my experience taught me one sobering insight: despite all efforts and billions of financial incentives, no country has sustainably, effectively and efficiently solved all aspects of the retirement and financial well-being ecosystem challenge. Yes, some countries - and people - do considerably better with more savers and assets. But no country nor system has adequately enabled all key stakeholders to sustainably create fit-for-purpose health, wealth and happiness outcomes focused on the time most people still call 'retirement'.

The problems have been visible for decades, and socio-economic benefits from (fully funded) and well-operating pension and retirement systems are tremendous for all stakeholders. So, why are those decisions so hard? Homo Economicus, visionary politicians, policymakers, trustee boards, as well as public and private sector providers make rational decisions on one of the societies' most significant challenges. Why is progress so slow, and why is there still so much to do?

These questions build the foundation for the critical question for this book: what can we learn from human and stakeholder behaviour to adapt and improve our decision-making that delivers better financial well-being outcomes across the ecosystem?

I like to follow Albert Einstein's famous advice2: 'If I had 60 minutes to solve a problem, I would spend 55 minutes defining the problem.' We will discuss current barriers, challenges and observations in detail to define the problem we are trying to solve as clearly as possible. For time-poor readers, please skim ahead to the innovation and recommendation parts. For practitioners, I attempt to cover topics as holistically as I can. This will take us often beyond typical actuarial, investment or product aspects. I hope that you see the value added.

We will look at three key components to attempt to provide answers that may point us in the right direction to change behaviour in turn and, over time, deliver better outcomes:

1. Context: Statistics, outcomes, pain points and frameworks that build the foundation of the discussion.
2. Behavioural economics and retirement theory and practices: A snapshot from my career that may raise better questions leading to refined or new answers.
3. Practical conclusions and recommendations: An attempt to blend behavioural economics and neuroscience with deep practical experience across the world of pension, retirement, investments, life insurance, financial advice and their ecosystems, and other industries and practices to provide potential new ideas, techniques or approaches to deliver better and more sustainable stakeholder outcomes.

We learn best from adversity and mistakes. We will see many of them. We will try to be as ruthless as light on a stage that shows every flaw. This is the best foundation for tangible improvement opportunities. Working for decades across many countries and with leading politicians, policymakers and providers enables a unique opportunity to gather ample best practices. Collectively, they form the high bar of what could generate the best saver outcomes. It is almost impossible to discuss pensions and retirement without at least one person trying to interpret some or all of the points in a particular political way. We will only have one unmistakable point at the centre of our discussion: how to reasonably maximise savers' outcomes. This book has no political motivation or conviction.

I am intentionally making a significant communication mistake in this book. Experienced marketers, such as Richard Shotton,3 indicate that if you have some authority and want to change stakeholder behaviour, you should use a gentle and friendly tone. I can't promise that I have done that consistently. However, you have the choice to continue reading.

You will also encounter three aspects:

• As a consultant, I like charts and frameworks that illustrate points. I hope they add value. Feel free to use and evolve them.
• I am, at best, a hobby psychologist. I leverage insights and experience from many experts I cite. My contribution focuses on applying their wisdom to the private retirement ecosystem to enable better outcomes.
• My Latin teacher at high school introduced me to the classics and quotes from wise people to stress my points. I hope you like them.

We will cover many observations and recommendations. They are all subjective, of course. However, understanding the different parameters of many private retirement systems and successful strategies and infrastructure from leading systems and providers furnishes the confidence to make the respective comments.

We will see ample questions to stimulate debate and creativity. They are intentional to encourage reflection. Private retirement success is a blend of skillset and mindset. We will see that all our decisions are made within a particular context. As we aim for a global audience, it is impossible to fully and correctly understand and interpret the local context. The reader's reflections and conclusions will do this to tailor global insights into a regional context that maximises outcomes.

The global private retirement ecosystem must be simplified and dynamic to cover all aspects correctly. In 1885, the German psychologist Herman Ebbinghaus4 conducted research that built the foundation of modern memory research and cognitive psychology. It led to the Ebbinghaus Forgetting Curve, which shows that we forget learned information up to 50% after one hour and 75% after one day. I hope I have not forgotten too many aspects and facts and made too many mistakes. Please do forget those mistakes or gaps quickly.

My goal for this book is to inspire scientific research into the ideas discussed and to encourage practitioners and policymakers to explore these concepts and ideas.

This book is structured into 10 sections:

1. Framing Context
2. Retirement and Financial Well-Being Ecosystem
3. Transform Retirement 2.0 - Defining the Crucial Challenge(s)
4. Transform Retirement 2.0 - Breaking Down the Challenge(s)
5. Transform Retirement 2.0 - Search within the Sector
6. Transform Retirement 2.0 - Search Outside of the Sector
7. Think Bigger for Retirement 2.0 - The Options Map
8. What Do The Six Shifts Mean More for the Golden Years?
9. International Leaders' Thinking
10. Conclusion

Each section is enriched with real-life case studies, which provide a tangible connection to the material and enhance understanding of the concepts. Towards the end of the book, several leading experts provide their perspectives on respective countries.

There are three key takeaways I would like you to reflect on when reading this book:

1. What do we know about the decisions savers must or, better, should make to maximise their financial well-being during their golden years? What is important to them? What do they consider rationally and emotionally, and how do they make these decisions?
2. What is our culture, mindset, implicit and explicit beliefs, and behaviours as industry executives, experts and policymakers? What are the intended and unintended consequences for all stakeholders? What do we need to do...