Road to Ruin, Milestone 4: Retirement ATM
You may find, despite your best efforts, that you have accumulated a substantial savings. (Or at least one that looks substantial when compared to your checking account balance.) To overcome this obstacle, ask yourself, “What am I missing out on?” (See FOMO) Borrowing from your 401(k) like it’s an ATM to join the party can help you trade tomorrow for today.
Road to Ruin, Milestone 5: Keep Telling Yourself You Have Time
Perhaps the surest way to ruin your future is to throw away you best asset: time. If you have managed to not save for retirement, or have only accumulated a small “nest egg”, pat yourself on the back and remind yourself you have time. No sense starting now – not if you want to ruin your future.
Legal Note: Our compliance department notoriously lacks a sense of humor. They would like us to point out that the above is intended ironically. It is the exactly wrong advice. To be clear:
- Don’t opt out. Opt in.
- Don’t reduce your company match. Find out how to maximize it.
- Adjust your investment allocations as you age.
- Do not borrow or withdraw money from your 401(k) until you are retired.
- Start saving now.
You will find good advice on saving for retirement here and in this brief video. Thank you.
Chip Castille, Managing Director, is head of BlackRock’s US & Canada Defined Contribution Group. You can find more of his posts here.