My Retirement Plan Is Having No Retirement Plan

I don’t have any retirement savings. I had precisely one opportunity to sign up for a 401(k), after I’d been working for a year at a grocery store (it was Portland), but I thought I was quitting soon, so I didn’t sign up. I stayed for another year.

I also don’t have a Roth IRA. No excuse for that one—I could set one up any time (I could set one up right now). It just doesn’t seem pressing. Or practical. I need all the money I have (and a little bit more) right now. I can’t be thinking of my future self! I’ve got my now self to take care of.

Despite mounting evidence to the contrary, I understand how money works. I get it, intellectually. I understand how interest works, in both directions—that it costs money to borrow money, that it makes money to squirrel it away in the right kinds of accounts. But no matter how many times Mike Dang explains to me the wonders of compound interest (and oh, it’s a lot!), I’m just not swayed to do anything with that information.

My parents both retired at 60 with state pensions (which I’ll never have) and fat retirement savings (which I also won’t ever have). Good for them! They have a great life. Well done. But I’ve been living paycheck to paycheck since I got my first paycheck, and I really just don’t care to think too much into the future (though, perhaps I might start at least thinking a few days into the future, for convenience). Because here is a secret: I could die tomorrow. So could you! And I am interested in living my best life now and not pulling my hair out over what I’m going to do in forty years.

Do you know what we know about the world in forty years? Nothing. We don’t know anything. I do a lot of big thinking on airplanes. Several of my moves have been hatched at 32,000 feet, plus some schemes that petered out once I was back on the ground (I spent one flight from Virginia to Portland totally obsessed with the idea that moving to Alaska and working for an oil company would solve every problem I’d ever had). But I also spend a good amount of my in-flight time coming to terms with what I assume will be imminent death (takeoff and landing man, that’s what gets you). As we’re cruising along, I always wonder: Is this it? And if it is, am I okay with that? I always am. No regrets. And one thing that never, ever crosses my mind: “I really wish I had put more of my money into an account that I couldn’t access or use until I’m 59-and-a-half.”

Things That Seem More Likely To Me Than Growing Old And Having No Money or Means To Get Money

  • A planet colliding with our planet
  • An asteroid colliding with our planet
  • Gamma rays
  • Winning the lottery
  • Rising sea levels wipe out eastern seaboard
  • Tsunami wipes out eastern seaboard
  • Worldwide economic collapse
  • Plane crash
  • Writing a thing and getting it optioned for a zillion dollars
  • War with China
  • War with Iran
  • War with North Korea
  • War with anyone, really
  • Grey goo
  • Nuclear meltdown
  • Massive earthquake
  • Someone who loves me has a zillion dollars and a generous heart
  • Nuclear bomb
  • Heart attack
  • Brain aneurism
  • Vacuum metastability event
  • MRSA
  • Cancer
  • Aliens
  • Windfall inheritance from relative I’ve never met/heard of
  • Dinosaurs
  • Getting jumped, killed on the way home from work
  • Plague
  • Flu
  • Starting a company and selling it to Facebook
  • Ebola
  • Sniper
  • Someone breaks into my house and murders me
  • Getting hit by a car and dying
  • Getting hit by a car and not dying, suing, and getting a zillion dollars
  • Super storms
  • …. but not zombies, give me a break. Totally unrealistic.



Photo Credit:flickr/Nasa Goddard Photo and Video


37 Comments / Post A Comment

Mike Dang (#2)

Obviously, I disagree with Logan! If you are eligible to put money into a Roth IRA, you are allowed to withdraw any amount of money you contribute to it at any time without a penalty (you’re only penalized for withdrawing earnings before you are 59.5 years old). So, it’s not like you have to put away money and not be able to use any of it until you’re an old person.

You want that money there so you can stop working eventually. Obviously, Logan sees the nice lives her parents are living right now, and I’m sure she wants that too.

Limaceous (#30)

Logan! You make me so stressed out.

Living in the moment is great but sometimes it helps to have a little bit saved up?

neener (#242)

at what point do we replace logan’s posts with excerpts from the novel confessions of a shopaholic?

@blahstudent Yeah … unfortunately her stories weren’t written by overpaid Hollywood writers. She does it all for free. Watch some agent from somewhere read her blogs, give her a book deal, turn it into a REAL shopaholic film, women go nuts for it (like The Help, or My Big Fat Greek Wedding, etc) and college women and housewives everywhere will sympathise with her, making her a martyr of sorts. Albeit, a rich martyr at this point. These are just how things happen these days with the internet and all.

@blahstudent okay one, touche. and two: i haven’t read the book but i totally saw the movie and homegirl just sold all her designer clothes and paid off her credit card bills and lived happily ever after! ANNOYING. also, i have no designer clothes.

@Logan Sachon Or, you could be like me and have a 401k from a job 7 years ago that you forget about and then when it’s transferred to a new company, they cash it out without asking you, so you don’t have to stress about the taxes that will come out of that amount, and get a check for $640 in the mail! Free money!

neener (#242)

@Logan Sachon i go back and forth between thinking it’s really valuable to put a real person to these kind of ordinary (but insane!) personal finance struggles, and thinking that this is a weirdly exploitative source of entertainment. it’s an interesting project, but i feel very conflicted about it all. i feel both sorry and also not-sorry for being hard/snarky on you. (but is that the whole point!?)

No, snark away. The thing is, I have way more friends that are like me than are like Mike. And I also know (theoretically) that Mike is totally, 100% right. But I’ll deal with it … tomorrow, is my general attitude towards a lot of things (and again, I know way more people who operate like that). I mean, the hope is that I’ll grow up, right? In the meantime, I’m just being honest, which is all you can do, really, right? (Right.) Also: I don’t think I’m convincing anyone to like, not save their money. Those of us who don’t save have a billion of our own reasons without needing to co-opt other people’s.

Limaceous (#30)

@Logan Sachon. I do understand the whole “I’ll deal with it tomorrow” thing. But then one day you deal with it today and it is easier than you think.

When I was a freelancer in my mid-20s, I was firmly in the worry about it tomorrow camp until my boyfriend made me open an IRA. Like, he told me if I opened one, he would put the first $250 into it. And how can I turn down free money like that? And then once you open the IRA, you can set it up to do everything automatically (automatic into the IRA, then automatic into an index fund or a target-date fund). I only have to think about it maybe once a year? At tax time? Other than that, I’m a big believer in the set-it-and-forget-it (Ronco style!) school of retirement planning.

@blahstudent I don’t get it. Maybe I haven’t been reading enough of Logan’s posts to completely understand her financial situation, but is it really that illogical, if you live on the edge of debt, to forestall saving for retirement until you are more financially solvent?

I mean, if she’s borrowing money to pay for Mike’s birthday dinner, wouldn’t any kind of substantial investment in a retirement fund entail going into the kind of debt that might come with serious interest? I feel like I know people who dutifully slog money away into their retirement accounts but are also carry thousands of dollars in credit card debt. Can that possibly make sense? Logan is poor. That sucks. But is it really the same thing as being irresponsible?

Niko Bellic (#311)

@Kristen Roupenian@facebook Exactly. I cashed my old 401(k) back in 2003 or something at some height of the market. Sure, I paid the penalty and the taxes, but I also paid my debts and made it through a spate of unemployment. All these people who claim to know about money said I did a stupid thing, something you never do. I laughed a bit in my mouth a few years later when their investments in the market melted, and they were all like “well, everyone lost”. Not me!

So, from that experience, my thinking is: save enough in cash to get you through about a year of unemployment, only after that start thinking about long term financial security. The problem is, when you live in NYC and have a family, that year worth of savings can be quite a lot. In short: retirement is a luxury. It’s not for everyone. Some of us will always bee too poor to afford it, which is simply a fact of the system we live in in which there will be winners and and there will be losers no matter what, and it’s completely useless to state “well, it’s the losers fault for not being the winners”. It’s not, and we are not stupid, so just shut the fuck up, OK? And yes, I’m an immigrant, and I know other people have valid circumstances of their own.

I’m looking at my 403b (I think? It’s through TIAA-CREF anyway) statement right now and wishing I could withdraw this $10K to help me buy this house because I’ve spent the day signing disclosures from my mortgage company and I’m stresssssssed.

Honestly the only reason I save anything for retirement is because my employer matches up to 5% (in addition to contributing a flat 5%). So 15% of my income each month is being saved, and that’s pretty cool I think.

But my retirement income projection is $2,007 per month right now, and assuming even just a 2% raise every year for the next 35 years that should see me right. Right? And if I get bigger raises (like I think I am this year) that’s even better. Retirement is like the one financial thing I think I’m doing right.

@backstagebethy $2007 sounds awesome. Don’t forget you’ll have paid off your house and be getting seniors discounts! You’re well on your way.

probs (#296)

I hope that, should I ever have kids, this website is still around (or archived in some capacity) so that Mike and Logan can work their Good Money Cop, Bad Money Cop routine on them. It’s working on me.

MuffyStJohn (#280)

I’m 28. I think deluding myself into thinking I’ll ever actually be able to retire is much more dangerous than failing to save the measly crumbs left over after I’ve paid my bills and, like, eaten every month.

mouthalmighty (#165)

I didn’t even understand that retirement was a thing actual people planned for until like, four years ago (I’m in my mid/late twenties, embarrassing). I grew up living paycheck-to-paycheck and so did everyone around me, including all the old people, since they all received Social Security/food stamps/etc., too. I literally did not understand that by saving money in an actual, interest-making way, I could avoid a Social Security-dependent future! No one ever said anything like that to me when I was growing up, so when I learned that, it was an actual revelation. Now just the thought of willingly not having a retirement plan leaves me in a cold sweat. Don’t get me wrong, I really enjoyed reading this post and found it entertaining, but as a way of life: scary!

Wow, after reading this (actually mid-reading this) I immediately signed up for my company’s 401K. I’m 26 and I’ve been contributing to my retirement since I started working after college but I started work at a new company a few months ago and had been lazy about enrolling in the program. I have to agree with Mike on this one, you want to be able to stop working eventually. I think this is true even though I’m not working just to retire someday, I hope to have a fulfilling career that I actually want to stay engaged in even when I’m all grey and wrinkly. Plus, when you defer money to a company sponsored plan, it comes out of your paycheck, you never even see it! Even though its hard to imagine living with $50 less per paycheck, when you don’t see it you just naturally adjust, I swear its not that bad.

sovereignann (#197)

Sigh…Wal-Mart greeter, here I come or they will have to wheel my body out of whatever job some company still allows me to have.

My folks retired as teachers and live an awesome life, but yeah, this is not something that will happen to me because at my advanced age, I’d have to probably put back almost half my income.

Hopefully you’ll still have a few teeth left when you hit retirement age because you’ll have to resort to eating cat food — and not the soft kind, either.

NoReally (#45)

You seem nice, and all. But that is nuts.

mof (#342)

Thank you for this. All the stuff that Mike Dang wrote was intelligent, clear, and convincing. But for some reason I stopped at nodding and agreeing and didn’t do anything about all his advice. This bit though has made me take action! I printed out the university’s different savings plan options and by Monday will have decided which one to sign up for. Thank you for spurring me to action. I don’t know why this did it, but it totally did.

Once again I identify with Logan, especially about the living life now part. My ex’s mom lived a hard life, basically supported the whole family as a nurse. She dreamed of seeing the world when she finally retired but instead got diabetes, spent a few years in and out of various facilities and past away at 64.

And I don’t wanna be the 75 year old traveling with a tourist group, barely able to keep up, let alone bungie jump Victoria Falls. So I do all that stuff now.

Besides, my dad just retired in October and he’s so bored he’s planning on going back to work anyway.

That said, I still put away a bit, just enough to get the free money from my company match. But for the life of me, the concept of pouring all your money into retirement and living a miserly life right now is so foreign to me.

mishaps (#65)

Half of my family dies young, but the other half lives to their mid-90s. The only thing I find scarier than dying young is lthe thought of living on cat food at age 93.

@mishaps Well put.

Moff (#350)

I gotta say, Logan: I did it your way for a long time — no regrets, no savings, enjoy the moment with the cash in my checking account, don’t freak out about the credit card debt.

And then I started doing it the other way, and, man, it seems lame, but it is actually way more fun.

dntsqzthchrmn (#363)

@Moff Spoilers!

My retirement plan is being Canadian. Have fun down there, guys.

jamiekm (#353)

Get the retirement plan. 401K or Roth IRA or whatever. Just start, even if it’s a teeny-tiny percentage of your paycheck. Even if you’re in the hole for loans, credit card debt, what else have you (which, by the way, paying those debts off should be prioritized over the retirement plan in the list of Things to Do With Your Money, but doesn’t excuse having NO 401K/IRA at all). Because it’s not just saving for the way-off future. It’s having something to dip into when a horrible car repair emergency comes up in eight months. It’s having assets to show off and make you more attractive when you’re applying for mortgages in 5 or 10 years. It’s having something weirdly irresistible to monitor on a daily or weekly basis that helps you learn a little something about the markets.

Trust me. It’s one of those things where you don’t really see huge benefits or drawbacks right NOW — but there will be a day where you’ll be so glad you started it way back when.

Niko Bellic (#311)

@jamiekm “Get the retirement plan. Even if it’s a teeny-tiny percentage of your paycheck. It’s having something to dip into when a horrible car repair emergency comes up in eight months.”

Here is my advice to you: don’t give people advice.

jamiekm (#353)

@Niko Bellic I only say what I say based on what’s worked for me. When I was stuck with a $1,500 car repair bill with absolutely no way to pay it (because I was maxed out on my credit cards and had maybe $200 in my checking account and obviously had no savings account), being able to borrow from my own 401K without any interest was a lifeline. To each their own, including you.

JaredAstro (#367)

@jamiekm Using a 401k as an emergency fund is really an awful idea and seriously detrimental to your retirement funds. Fees from withdrawing early from a 401k are ridiculous on purpose to serve as a barrier to prevent people from depleting their retirement savings. The first step for anyone looking to improve their finances is to protect yourself with a readily accessible emergency fund, usually in a plain old savings account. Only then can you think about saving for the future.

I agree with Niko Bellic that jamiekm needs to learn more about personal finance before offering up any damaging advice. It would also help to make sure they are never in such a dire situation with no other options.

Logan, here’s a thought. Every time I face one of those “I’m sure I’m about to die” moments (we all have our fears), I also think about my life and where I’m at. I also come to the conclusion that I don’t regret anything that I’ve done. I don’t think that I should have gone to restaurants more, bought an iPad, or anything else I could have done extra had I not been saving for retirement. It turns out, those things that make our lives worth living aren’t actually based money. Money is just there to make our down time more comfortable. I want to be comfortable in retirement so I don’t have to worry as much so that I can continue to do more things that do give my life meaning.

dntsqzthchrmn (#363)

Getting expenses below income… is incredibly satisfying. But it was impossible for me to do while paying rent in NYC. Luckily for me, I stopped being satisfied with living in NYC years ago.

I realize nothing is likely to change your philosophy until you actually have to stare the reality of subsisting only on Social Security in the face. But Logan, I strongly encourage you to Google “compound interest twenties” and browse the first few links. $10 invested in your 20s is worth a hell of a lot more than $10 invested in your 30s, and exponentially more than $10 invested when you’re in your 60s, facing health problems, and possibly no longer able to work.

nate@twitter (#366)

It’s cool how you’re bucking conventional wisdom by doing something lazy and dumb! Incidentally, this isn’t going to bite you in the ass when you’re 59. It’s going to bite you in the ass when you’re 43 and you realize how much you’re going to need to carve out of your paycheck to stave off dying in poverty.

I guess I just have limited interest in this kind of story on the billfold. There are only so many stories I need to read about Logan being bad with money and the recycling of that same trope makes me uninterested in this site.

Oh man. You are going to give me an ulcer!

Think about it this way: anything could happen in the next 40-50 years! But statistically you are probably going to live for a long time, and then “anything” could be falling and breaking your hip or whatever. Most people can’t work their entire lives because of health reasons, even if they want to. And then it’s not about you, it’s about your kids and family carving out their own paychecks and time to take care of you properly. I read too many advice columns where kids are going broke and quitting jobs taking care of their elderly parents. Put something away! Just a little! If only for my poor heart.

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