Voodoo Retirement Planning – Yes…Voodoo.
Recently while assisting getting the pension folks we use in on a sizable retirement plan we began discussing stories of educating not only employees but the executive decision makers themselves.
For example, a dry example though, is that most decision makers really only consider a traditional 401(k) plan. Plain vanilla ice cream if you will. Now don’t get me wrong. Some vanilla ice cream on a piece of warm apple pie = good stuff. But sometimes, “other flavors” might be a better fit for that particular employer group be it because of their size, the number of locations and how many states their in, their objectives like employee retention perhaps. Point being, is sometimes “vanilla” isn’t the best fit. Granted, it could be a 401(k) with some special sprinkles on it but you get the idea.
Perhaps a more fun example but for employee education is when someone asks, well when will I know when to increase my contributions?
That’s a “normal question” don’t you think? I do but, knowing me, you know I have to try to make it fun, educational, but also memorable. After all, if they don’t remember it, what good was the information?
So, what do I say in response to this question?
That’s a great question Mr. Smith and here’s your answer. No one in this room needs to tell me what “your number” is but sooner or later, be it in 3 months, 3 years, or whenever, you will look at your account statement, see that “magic number” that is “the number for you”, could be $10,000 in there, $50,000, maybe it’s $100,000 but whatever that number is, when you see that and say it to yourself, I didn’t even feel that coming out of my paycheck….VOODOO, it’s time to increase your contribution!
Yes, I not only have said that too many times to count since starting in this industry in late 1994 I have had countless people come back to me years and years later, speaking up in later group enrollment meetings, stopping me in the halls of their employments, even approaching me while I’m at the urinal in the men’s room, “Voodoo, I increased my contribution!” On that last one it was like that’s great, but can you give me a moment? That seriously did happen.
Simple rule of thumb? Not sure but perhaps. Do something instead of nothing. Try to get all of the employer’s “free money” meaning the match. And….Voodoo.