What do these two topics have in common?

Is it that I expect Mr. Jeter (can I call you Derek?) to retire? Not at all — in fact, I believe the Yankee shortstop will have a bounce-back year, leading the Yanks to another world championship.

Is it that I expect that when Derek does retire he will take a Wall Street job and become a stock broker or financial advisor? No way.

Is it that we’re both originally from the State of Michigan, moved to New York early in our careers, and have long service records in our respective careers?

No – it’s all about metrics — or the lack thereof.

For some reason, there are far more and better metrics (with more appearing each day) that measure the value of a baseball player than there are that measure the possible outcomes of retirement strategies.

The off season contract negotiations with Derek were apparently difficult, and all of the baseball pundits kept pulling out fascinating metrics such as “WAR” – Wins Above Replacement – to measure his value. Judging by the number of articles focused on that kind of stat — I read one piece that used at least three separate metrics – it’s clear that even the average baseball fan is hungry for them.

Why then, in the case of something as important as retirement scorekeeping, are the metrics so uneven, and the data so poor? In the April 4th Wall Street Journal a story entitled “Numbers You Can’t Count On,” bemoans the way common measures in mutual fund reporting tell us less than we expect them to. If fund scorekeeping is suspect, what about the evaluation of complex retirement plans?

So who’s to blame? Maybe it’s the securities and insurance regulators who limit how you can evaluate alternative strategies. Or the fund and insurance companies who prefer marketing pitches to serious metrics. Or the registered representatives and advisors who sell relationships, not results. Or even the individual investor who shuns the necessary analytics.

Whatever! Doesn’t it make sense to have metrics for the $10+ trillion personal retirement industry that are at least as thorough as the ones that measure Mr. Jeter’s value vs. his $15 million per year contract? Surely the millions of baseball fans who are saving for retirement deserve a stat that gives them a measure of how they’re doing against their goals? In keeping with the baseball metric of WAR, how about adopting a measure for retirement like “ROA” – Results over Alternatives? I’ll give some specific examples in future blogs.

Jerry Golden
President
Golden Retirement, LLC
www.GoldenRetirement.com