If you’ve never found yourself asking this question, it could be either: (1) You’ve never had a 401k, or (2) you’ve always maxed it out and have more money than you know what to do with. If it’s number one, call me and let’s discuss. If it’s number two, call me and let’s discuss. Here’s a hint, it’s called the Wheeler Pulliam for Wheeler foundation… For the rest of you, keep reading.
Ah, the old 401k at work. What a safety blanket to have keeping us warm at night. It means we’re responsible. It means we’re saving. So let’s quickly go through the checklist and pat ourselves on the back while we move on to something more important:
- Contributing? Check.
- Company match? Check.
- Know the fund? No matter, I get quarterly statements with the name on it. So, half-check.
- Contribute enough so that you can retire at 65 with enough money so that you don’t have to go back to work telling someone “My pleasure!” after you take their order for a #1, or checking off that they have the right number of items in their basket as they exit the door? Wait a minute! What?!?
Don’t get me wrong. Those last two are both noble professions that require hard work. But that’s my point. I doubt if that type of hard work at the age of 65 and beyond is anyone’s idea of a dream retirement. Unfortunately, it does happen. One of my best friend’s parents wound up in one of those very scenarios at the ripe old age of 75. So it’s not unrealistic that it could happen to you.
The truth is with improving medical service and technology, people are living longer and will continue to live longer for quite some time, blowing the old mortality average of 72 years out of the water by a long shot. I mean with today’s modern science, it’s not unthinkable that I’ll live till I’m 250, or 300 years old (Ricky Bobby for those that don’t know). Don’t laugh too quick. Imagine the response you would’ve gotten back in 1862 if you said you were going to live until you were 80? People were still dying of appendicitis and severe colds from taking baths back then after all.
What’s the point you ask? The point is that none of us knows exactly when we are going to die, but the odds are that it will be a lot later in life than we think. What we see for retirement at age 35 or 40 will look a lot different by the time we get to 65. Like it or not right now, retirement is a moving number. My point is, hedge your bets and max out your 401k. Take advantage of all of the tax breaks you can, while you can. Trust me, when you are older, the fact that you had more disposable income in your youth so you could drive a 6 series instead of a 5 by not maxing out your 401k will haunt you like Jacob Marley on Christmas Eve. So Scrooge up, and contribute as much money as you are allowed so you can have many Merry Christmases to come.