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This is a small article that we seem to do here often. Some of the things we say to people are meant to shame them into making this decision or that. Notice people I said some not all. Some of our points are made nicely but hopefully the tips and points we make for folks are taken and evaluated. I think this is the beauty of this forum.
Anyway the reason I started this thread is something I found out on the net. Here is a quote from it that I thought we should consider as we give advise to those who are searching.
Quote:
How do we get more people to save instead spend their way into retirement? Suze Orman scolds people into better habits. She, like Judge Judy and Dr. Laura, finds timid souls who have made poor choices and berates them.
If bullying is what it takes so that people can live a life of dignity and live a richer life in retirement, maybe a dose of Suze lecturing and sermonizing isn’t so bad.
But when Suze’s tough love isn’t your style, consider Ramsey and his crew. I’ll admit that his penchant for quoting scripture to put people on the road to financial independence triggers an eye roll for me. But his fatherly approach to asking people about their spending habits isn’t meant to embarrass or demean.
I never heard of Chris Ramsey until this article so I am not promoting him. I think what I am promoting here is for us to understand that some people do need tough love and others gentle persuasion. Use facts not fear to make your points.
Agree. I'm not ever intentionally trying to shame anyone. That's just etiquette. I don't KNOW anyone here, nor do I consider anyone here a personal friend so their behavior or posts is of no consequence to me. Shame is only valid when the shameee(?) is publicly affected and personally identified. That ANYONE on a public anonymous forum could actually get personally offended or hurt by anything anyone says on it, even when intentionally directed at them is rather silly. I could care less what anyone calls me or says to or about me. If a diatribe turns in to insults, it's a waste for everyone to wade through to find the information,so should be stopped, but the whole warnings for "personal attacks offended me" on here are infantile. I only participate on a forum for information gathering and dissemination of information to help others and myself. If someone gets offended by what I see as true or more realistic then back it up to disprove me, don't get all in a huff of personal offense. Eventually I normally fade away from most all forums after everything becomes repetitive and I no longer have anything to add or learn to make it worthwhile. If a major part of ones social life is posting on a public forum...well...that's rather sad. While I derive enjoyment from being on CD, if I was banned tomorrow from posting it would make zero difference to me at this point. I have learned so much on here, and that is its value, but the new info and useful strategies are already getting fewer and farther in between, and I post and visit less already after just a year.
I think what'll get many people to save for retirement (who otherwise wouldn't) is to make it automatic. If someone wants to 'opt out' they need to make their case.
I think what'll get many people to save for retirement (who otherwise wouldn't) is to make it automatic. If someone wants to 'opt out' they need to make their case.
IMO, the biggest problem is that when it is most possible is when it seems least important and when it is most important it seems almost impossible. By that I mean if you start really early you don't need to save all that much percentage wise and you get used to that being part of the difference between gross and net. I don't think I can overstate the importance of the last bit. In simpler terms, your net won't ever have to be reduced because of retirement savings as the net (hopefully) rises during your career. So I think this is when it is most possible. I avoid the word easy because the easy way is taking home a little more. But then you get used to that net and adjust your spending to it.
Those that don't start early are faced with needing to amass savings at a greater rate late in life and to do so will reduce the net, often by a substantial amount. It has become more important yet less possible.
So I agree that the automatic savings is a good idea.
They've done studies on making a 401k voluntary contributions (opt-in) versus the default condition for new employees (opt-out) and they find that approximately twice as many new employees contribute through the opt-out 401k programs as the opt-in programs. I don't have a link but I just saw this study on a recent program about retirement plans.
It's really hard to get most young people to imagine retiring, let alone saving for retirement. It is so far in the future, and so alien to their experience that they feel it's not applicable to them.
100% agreement with both, especially RTB. I started, likely like you, as soon as I got my first job out of college in 1980. 401k match amount plus 1% to start, with adding half any raise each year. Let time do the work. Divorces and change of jobs sidetracked that too many times when younger, but I never stopped, and you just accept that is the way it is. Next you know, you are saving 30%, and have high six figures (or low 7 if you manage to never divorce) saved, for what seemed little effort. That becomes the level of income you get used to living at, and continuing at that level in retirement is easy.
When I First started working I had a good engineer friend just a few years from retirement (thank you Tom, if you are still alive) that gave me more insightful fatherly advice than I ever got my whole life from my own Dad. And the importance of saving and letting time do the work, and living below (or correctly at) your means was at the head of the list. Listening to him was easily the smartest financial move I ever made. The idea of not saving in retirement seems almost giddy to me. It's a solid 20-25% drain against income, after taxes that I Will not have again, once I retire! Add no more SS payments and no mortgage, and I should have trouble spending my income, I hope!.
I really don't care what other people do. It's their life and their choice.
But I will say that the only thing that changes behavior is consequences.
I agree but more and more we have government that wants to take care of people that simply failed to do it themselves and in every case it costs the rest of us either in taxes or a reduction in some other area.
Unfortunately we live in a period that distorts consequences.
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