Thursday 23 May 2013
A new study out there reaffirms what everyone in HR knows: retirement planning in America really sucks.
If people save in the first place, which is less common than you think, their best intentions are
thwarted. They often tap into their retirement plans to deal with problems like medical expenses, credit card debt, home repairs or college tuition for their kids.
Here is one way to fix this…
Read the whole post over at Laurie Ruettimann's The Cynical Girl (an FOT contributor blog).
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© 2013 Fistful of Talent
I think the writer is biting off more than can be chewed in this post.
People of any civilization can better prepare themselves for retirement with a few simple (but not easy) disciplines – none of which has anything to do with tax-deferred savings accounts.
1. Spend less than you earn.
2. Make financial literacy a life-long priority.
3. Trust only yourself with the allocation of your assets
4. Use debt only as a last resort.
I don’t think the point of the post was about tax-deferred savings accounts – but more about something related to income distribution and how the “man” always comes out on top.
Todd, I saw your tweets and this comment. Thank you.
1. You can spend less than you earn. Yes. But it’s also increasingly difficult to save when wages are stagnant and the cost of living has risen over the past several decades. Also, capitalism and the capacity to earn more money has a limit; unlimited growth comes with inflation.
2. Financial literacy is a lofty goal. Until we invest in a healthier and standardized public school system that teaches logic and reason instead of advocating local political agendas like abstinence and prayer, I would be happy with basic math proficiency.
3. Remember the dot com burst in 2001? When you trust ONLY yourself with the allocation of your assets, you risk more than your own well-being. Portfolios should be balanced beyond your own basic knowledge of “hot tech stocks.”
4. Debt is healthy. Debt can be good. When we demonize debt, we show a lack of understanding of how markets work in our favor.
The post is about tax-deferred savings accounts. I think a 401k is a luxury, right now, for most hard-working Americans. I’d like to see that fixed so we can go about saving for our future.
I think we’re on the same team.
Your sensationalized headline is a disservice to readers and honestly beneath you. “401(K) Savings Plans are for Suckers”???
If your point was that it is hard to save we’d have no argument. If your point was that employers can and should do more to help employees plan for retirement we’d have no argument. If your point was that difficult economic times have resulted in more people dipping into their 401(k) plans we’d have no argument.
Your point seems to be that it is the employer’s fault…you should pay people more…your office site should be on a bike path…you should have flexible work arrangements, etc. BUT you seem to leave out any reference to personal responsibility. We should honor and encourage people who take responsibility for their own lives, not call them “suckers”.
To be clear, I’m not pulling a Romney and disparaging people who are poor or need public assistance…and I’m happy to pay more tax to support national healthcare. I also made the decision early in my career when I was making very little (and eating raman noodles 6 nights a week) that I still needed to put some money aside for my future. By following a ‘slow and steady’ savings commitment I’ve now accumulated a very nice 401(k) account, which along with other savings means I won’t be dependent on Social Security (although I hope it is still around).
Saving money is hard, as it is always attractive to spend everything you make now. Helping people learn how to take a little control over their own future by saving is also hard, but noble. Through regular education, training and modeling (but not auto-enrollment) we’ve increased the percentage of employees participating in our 401(k) from 48% to 68%…I think those people are responsible adults, not “suckers”.