Is There a Good Reason Not to Fund Your 401(k)?
A few weeks ago I wrote an article for Money Magazine online and it was read by hundreds of thousands of people that week.
I’m very proud to have written the article, and I want to take a look at why this topic is so intriguing. I was told by the editor that it was not normal to have this much traffic. So what created all the hype?
It was the title of the article and the idea it presented that attracted readers and engaged people’s curiosity about new solutions to their financial questions.
People want to hear something different.
“Here’s a good reason not to fund your 401(k)” is not something you often hear — especially not when it comes from a Certified Financial Planner.
When we graduate college, we are told that we need to start to save for retirement. People often say things like, “The earlier you start to fund your 401(k), the better off you’ll be when you retirement.”
If your goal in life is to get the most money possible into a retirement account by the time you retire (whatever that means to you), then this is one way to do it.
But no one ever explains why this life-long pursuit that we embark on at age 22 is so important. What’s the point of having a mound of money set aside in a tax-deferred account? Why put our money in an account we can’t touch without penalty with few exceptions until we’re nearly 60 years old?
The idea is to have enough money stored away for a time when we decide (or it’s decided for us through old age, an accident, a disease, or otherwise) to stop generating an income through some form of labor. After writing this statement I can’t help but think of the phrase “indentured servitude.”
Our society is born to work and we work to live.
This is crazy! This idea screams “you have no choice” loud and clear. There is an inherent lack of choice inside this way of thinking, but most of us never question it.
And I get it. That fear that you’ll somehow fall behind and die poor if you take their minds off of this goal of saving for retirement is real and it can take over.
But there is more to life than working for 40 or 50 years (or more!) before dying. There are more options. And we have the power to explore those different paths.
We have a choice.
I want to change the linear perspective that most people — even the financial experts! — subscribe to when it comes to saving and investing for the future.
What if we take responsibility for our lives and choose to live it the way we want to live it? This will mean that we need to think outside the box and potentially do a few unorthodox things (well, unorthodox according to society, anyway). But it’s worth it.
We can say how it goes and stop living in fear of things like the stock market and what happens if you don’t fund your 401(k) to the max every single year and this overwhelming burden we know as retirement planning.
Here’s another question to think about in this conversation: if what you do during your “working years” is so bad that all you want to do is retire early and stop doing it, don’t you think you should choose a different path?
Don’t spend the majority of your life, and the years when you are most likely the healthiest you’ll ever be, doing something you don’t want to do. Live a life you love instead.
Do you know how you’ll use your money, today and in the future, to help you create what you want in your life? If you’re not sure, let’s chat and develop a unique solution specific to your individual goals and desires.
This is your life. And you can tr it into what you want. Let’s make it happen!
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