Every month I receive 2 statements that I (sometimes) open. I thumb through the pages, look at the pretty pie charts, mentally file them in the “I have no idea what this is” folder, and throw them in the shredder pile. My masterful powers of deduction tell me that they are statements for a retirement account from my previous employer. I didn't contribute to a retirement plan, so I never understood how the money came to exist in the account. That’s right, I am guilty of the worst kind of money management error: laziness. So I finally called my Edward Jones representative for a tutorial in 401(k) rollover options. Andrew, the nice man who has left me several messages over the last 12 months in an attempt to rouse me from my investment hibernation, met me at the Starbucks around the corner. He walked me through the retirement plan rollover options, explained a few diversification strategies for my existing Edward Jones portfolio, and even went so far as to call up the senders of the mystery retirement statements to request the paperwork for my rollover.
Failing to contribute to my 401(k) or 403(b) or 567(xyz) has been a major source of financial guilt for me. The episodes of regret are always overshadowed by my complete lack of understanding, which I then react to by ignoring the issue altogether. I justify the inaction by telling myself that I’m in good shape because I have a Roth IRA. I can’t be financially remiss if I have an IRA (it stands for “Incredibly Responsible Adult,” right?).
I'm trying to cut down on the number of things I avoid, so my plan henceforth is to make a concerted effort to read through my statements more carefully and to actually open the Edward Jones investment brochures that come in the mail. I’m also going to fill out the Vanguard paperwork for my Emory retirement contributions. I was fortunate enough to work for a company that funded my retirement account regardless of whether I made employee contributions. Judging from my Vanguard statement, Emory does the same thing (do all companies do this??), but I’m definitely missing out on so-called “free money” by not making a monthly contribution. I don’t want to sit through another meeting with Andrew where I hold up my hands and say, “I didn’t do this because I have a strong self-sabotage mechanism and the allocation percentages make me go cross-eyed.” Better to be motivated by guilt than by nothing at all.
As the creepy song from Fallen states, “time is on my side,” and all I have to do to remind myself of this is take out my handy retirement calculator (care of Andrew) to see how dismal my finances will be if I wait until I’m 45 to take advantage of things like employer matches and growth funds.