by Rob Thomas
I became licensed to sell securities in 1998, a great time to be investing in stocks and bonds. Qualcomm was going to $1000 and Cisco was going to be worth more than most countries. That lasted until March 2000 when the dot.com boom went bust. My interests then took me to retirement plans. For over ten years I advised companies on pension benefits as an advisor for UBS. Defined contributions plans, 401(k), 403(b) 457 and profit sharing plans, to name a few, are a part of most companies’ benefit programs. The defined benefit plan, the traditional pension plan, is not as popular. Working with companies to offer plans that makes sense, and are embraced by employees, is where I have focused my efforts with Social(k). Since 1999 I offered a 401(k) platform with more socially responsible funds than any other provider. In 2005 I greatly expanded the socially responsible fund offerings on the platform and branded it Social(k).
During that time I have heard a lot of reasons why someone is not interested in a retirement plan. The newest batch actually considers the world ending in our lifetime a valid reason to avoid putting a little extra cash away for later in life. Let’s examine reasons for not investing for retirement. Then we will look at how one’s relationship with money changes over time and how to use that to your advantage.
Who has time for a retirement plan when the world is collapsing?
“Global climate change means we will be drowned, frozen or dehydrated before I reach retirement age, the last thing I need to do is put money away for a future that may not exist.”
“The Mayan calendar says we are done by 2012! I’ll enroll in 2013, thank you.”
“Nut jobs are going to drive this country into the ground, I don’t need a 401(k) I need an A(k)– as in AK-47!”
“Why bother saving for retirement, I’m 300 lbs overweight and will be dead by 50.”
Okay, maybe those excuses are a little extreme. How about these?
“As soon as I get a chance.”
“When I get my next raise.”
“When they plug the well in the gulf!” (which has been done…)
Finally, the ever-popular “market timing” excuses:
“The market is too overvalued. I will buy in during the next drop.” (Good luck having the intestinal fortitude to buy when the market is collapsing.)
“The market is tanking, I will get in after it recovers.” (You will miss the early returns and prices will rebound before you step up to buy.)
The arguments against contributing to a retirement plan seem to come down to:
The world is going to end; I have no money; The market is too high or too low.
Let’s look closer at each: