I've been thinking a lot lately about my 401(k). Or, let's be honest, the lack of it.
See, years ago, as a not-so-fresh-faced kid out of college, I couldn't wait to start saving for retirement. I signed up for the max, my employer actually matched it, and life was good. I hadn't even gotten married the first time yet, so my responsibilities were still pretty minimal.
Of course, none of that could last. Just about three years later, I found myself divorced, remarried and suddenly living in Colorado with my oldest daughter on the way. Of course, another year-and-half later, the tech bubble began to burst and I caught a career roller coaster that sent me flying into five jobs in about as many years – with a trio of layoffs thrown in for good measure.
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So, of course, somewhere along the way circumstances forced me to do the unthinkable and cash out what funds I had. I took the tax hit, and used the rest of the money to take care of my family. Ten years ago, it still seemed as if I had all the time in the world. Besides, I reasoned at the time, I'm a journalist. We don't retire. We write 'til we slump forward in a heap on our desk – or the bar.
Well, despite settling into this job, my second marriage fell apart during the brief housing boom, and then, of course, everything went to hell. The recession hit, taking hundreds of thousands of jobs with it – and nearly everyone's security – as it wiped out employer 401(k) matches for most regular folks. At the point when I was ready to start again, there just didn't seem to be any point. I'll just start my own separate retirement plan, I decided.
What is it they say about the best-laid plans? That "retirement plan" is a windmill I still haven't tilted at. We're talking a life policy, a few hundred bucks in savings and just about as much in my rebooted 401(k) effort (still lacking a match). Besides, my oldest daughter starts high school in the fall, while my youngest is still a few years away from kindergarten. I'm more worried about a trio of college tuitions than daydreams of RV road trips or days filled with Florida golf outings.
I relate this somewhat tragic autobiography not to elicit pity or financial advice. I've long since accepted my fate. I turn 43 in a couple of months and time's against me now.
I know there are a lot of people who blame the 401(k) or the system itself. Like everything else in the financial business, they say, it's a game rigged for those who make the rules – and already have the money. A not-too-old UC Berkeley study (yeah, I know, consider the source …) showed that 70 percent of 401(k)s and IRAs are in the portfolios of the wealthiest 20 percent. And that about 75 percent of 401(k) account holders boast account balances less than the "widely cited" average of $60,000 and that the actual median balance is less than $20,000.
Others blame employers, citing a lack of matching contributions and auto enrollment and escalation. And there's probably some truth to that, as well. But at the end of the day, it would have made a much bigger difference if someone had just sat down with me and had a conversation, whether it was a financial advisor, someone in HR or even a smarter, better-prepared co-worker.
But it doesn't change the fact that I have to take responsibility for my own poor planning. HR didn't fail me. And the 401(k) certainly didn't. Neither of them owed me a thing. I failed myself, and the price is simple: I just have to keep working.
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