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What’s that you’ve got there? Is that a little Roth IRA you’ve got going? Cute! You’re putting five percent of every paycheck into a 401k? Neat! The company you work for is matching a whopping three percent of every paycheck? Generous! You’re even setting aside extra money each month to invest in incredibly exciting low risk mutual funds? You responsible fool. You’re doing exactly what the government wants you to do. You’re just another sheep in the flock being shepherded by Uncle Sam. You could be living like a king, eating steak for every meal and swimming in the finest material possessions money can buy. Instead, you’re a middle class sucker.
I understand why it might be tempting to put your money into a 401k or some other type of retirement fund, especially when the company you work for is pushing some “matching” scheme down your throat, but let me ask you a question. What if you kick the bucket before you’re able to spend a dime of that dough? You’ll feel pretty stupid then, won’t you? You’ll be an angry ghost, forced to wander the earth between this life and the next, watching other people spend your hard-earned paper on mortal swag. They’ll be shining while your dumb corpse is rotting in the ground.
What kind of idiot throws currency that he sweat for into an account he can’t touch until he’s 59 years old without massive tax penalties? There is almost definitely going to be a nuclear war before you reach that age. If not, you could easily be crossing the street and get hit by a bus, or get some flesh-eating disease from the water at a janky Chinese restaurant. By my calculations, the odds of you dying or the world ending altogether before you have the pleasure of seeing a penny from your 401k are extremely high.
It’s time to face potential facts. Even if you do survive, and the world manages not to end, your account could simply disappear at any second. Think about it. It’s not like you’ve ever actually seen any of that money in person. It’s just a number on a website floating around in the interwebs. A website that could suddenly cease to exist. Why are you putting your faith in big banks? These are the people that nearly destroyed our entire economy by handing out shit ass loans for years. You might be saying, “But my savings is insured by the national government!” You trust the national government? Are you aware of the garbage human beings that the national government is comprised of? Can you name a single senator, you uneducated doofus? Our current president’s previous career revolved around firing people on national television.
One day, you’re going to wake up and that website you hit to check your retirement balance is suddenly going to be offline. Then who do you call? Too little, too late. This is why you should keep all your money under the mattress. Zero percent interest is better than one-hundred percent of your money vanishing. Can’t argue with that.
Saving for retirement today is basically admitting that you don’t trust yourself to kick ass and make deals tomorrow. Scared money don’t make no money. Don’t be a simpleton and do something just because everyone else is doing it. Eat drink and be merry, for tomorrow we die. Dave Matthews said that and he’s worth hundreds of millions of dollars. You think Dave has a 401k? Shit no.
Bet on yourself. Take a risk one time. Ball out of control today and let tomorrow worry about itself. Quit getting cucked by the man. You can’t take it with you when you die. Money isn’t real, George. It doesn’t matter. It only seems like it does..
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Ross Bolen
Ross Bolen is a New York Times Bestselling author, co-host of the Oysters, Clams & Cockles: Game of Thrones podcast, co-host of the Back Door Cover sports podcast, 2017 Masters attendee, bigger and more loyal Rockets, Astros and Texans fan than you, cheese enchilada aficionado, and nap god.
@WRBolen
@WRBolen
WRBolen
Saving for retirement is pointless for you, Bolen, because there’s no way you live past 45 the way you live.
If you ride like lightning, you’re gonna crash like thunder.
I’ll see you in hell.
……shit, man.
New motto
Financial advisor checking in. Transfer all your savings to me and my friend, the Nigerian Prince, and we’ll make your retirement dreams come true!
You’re what the French call les incompetents.
Hey man, thoughts on term life insurance with cash value that begins to pay out, tax free, at age 70? That would be in addition to meeting a company match in an 401K that is currently very aggressive.
I used to work for an insurance company when I started out, and man oh man was that the hot pitch. My advice would be to use term life insurance to cover your family in case you die unexpectedly. If you don’t have anyone relying on your income then you don’t need life insurance, you need disability.
If you want tax-free income at retirement use a Roth 401(K) and IRA. You have the ability to earn a lot more than the insurance company’s fixed account, which typically pays a max of 3-4%, and there are a lot fewer hidden rules associated with them.
I have accomplished my goal of starting a productive conversation about saving for retirement. Suck it, haters.
Ross Bolen: PGP’s Foremost Authority on Reverse Psychology
I got the ole disability and term life insurance pitch recently, I gave in so the guy would stop pestering me. Stuck with northwestern mutual for a while (until I die)
Word to the wise: You can get the exact same coverage for much less elsewhere. For cash value/permanent/cash value life insurance you want NWML, NYL or Mass, but for term, disability and long term care you can get much lower premiums with Transamerica, Mutual of Omaha, MetLife, etc.
Have to disagree with you on this one. I trade securities for a bank on the street and my cash value insurance has been a great asset as a sort of floating rate bond. Sure it’s boring, but is also a steady fixed asset that lets me take more risk in my brokerage account. I can take cash out with a loan at any time and it comes with death benefit on top of it. Banks pay millions of dollars in BOLI (Bank Owned Life Insurance) a year to help produce safe return. Not saying it should be a major portion of your portfolio, but I’d advise anyone to invest in it as a portion of their fixed income allocation. If the insurance broker cuts their commission out of the product to a large extent and it is structured correctly, you can make solid returns in the long run.
I won’t disagree with you on this one, it’s definitely an asset class like anything else. The one thing I would add is that you want to make sure you’re taking your policy out through a private company that is going to be around by the time you retire – New York Life, MassMutual and Northwestern are the big three.
Really appreciate the insight. Specifically looking at New York Life. Opportunity for my wife and I to diversify investing with some peace of mind about coverage. Also, specifically talking about 770 if you have more thoughts.
I’d be careful with NYL. I went with NWML on my build. NYL shows a 6.2% dividend interest rate, but their underlying fees and operating costs, knock that rate down quite a bit. NW illustrated 5% dividend rate and after a 40 year projection had more cash value in the contract due to lower mortality expense and cost from what I’ve researched. If you look at dividend payouts (actualized) over the past decade NW has paid out more than NYL and Mass combined. NYL and Mass are also funding dividends with their surplus cash, betting on longer maturing fixed income securities outward on the curve. I’d go with NW, they only bet on short duration FI/Private placement/Private Equity. I’d go with either a 65L or ECL overfunded contract, make sure its blended with at least 50% in Additional Premiums. That’s what my NW rep built and it has been solid. Hope that helps. Sorry for the technical dive, second nature as a trader.
As a NM advisor who is keeping his opinion out of this conversation (inherently biased) I’m stoked to see someone in the financial industry (obviously different capacities) who has a working understanding of what this asset class/vehicle is meant for.
THANK YOU
I’m a fan of ROP term for the immediate coverage needs, the premiums are higher but you’re getting them all back at the end of the term, and it’s still convertible. Don’t forget variable permanent policies, same tax treatment on withdrawals as a Roth IRA.
You’re just trying to spin a case for Grandex not offering a 401K.
We have hella bennies.
100% of Miata drivers max out their 401k.
“Scared money don’t make no money. If I ever go broke, Imma take your money.”
-Meek Mill
As my friend says, “Money is only numbers on a screen”. He also says “do whatever you want and don’t worry about the consequences”, and “if it wasn’t for the last minute, nothing would get done”.
He’s a lot of fun to hang out with, and it’s shocking that he’s a successful accountant, but yea he’s a mess.
THIS is a man we can trust with our money
FYI, that “massive penalty” is 10%. As your friendly neighborhood CPA, I can recommend saving Roth for retirement so that you’re not 65 and working at Walmart.
10% is actually a lot of money if you saved a decent amount for retirement
True but it’s not a guaranteed penalty, more of a worse case “what if?” scenario.
Bill Nye wasn’t a fucking CPA. Get out of here you con man
This is a man we can trust with our money
No false advertising here. I am who I am.
Like anyone is gonna trust a scientist (even a brilliant one) for money advice
He’s not a “scientist”. He is a mechanical engineer turned actor.
I thought it was like 35%.
You’re probably confusing your rates. 35% is the frequently cited rate at which you pay taxes upon withdrawal from 401k, but this assumes that you’re making like $150,000 a year since the rates stair step up based on how much you make.
Sorry for invalidating your whole piece. Good writing though.
If it’s only 10% I am about to buy the mall.
http://lmgtfy.com/?q=What+is+the+401k+early+withdrawal+penalty
But with that withholding, aren’t you looking at losing 30% altogether? Plus any additional state withholding? Asking because I had a CPA in MN tell me I was looking at a 32% penalty…
Your CPA was either trippin or you misunderstood him/her.
Upon your withdrawal from a 401k, you’re taxed at your ordinary tax rate. The 10% penalty is added on top of that. If your contributions to your 401k have been Roth (post-tax), then your withdrawal is tax-free and all you have to worry about is the 10% penalty.
There’s also a rarely discussed option to borrow from your 401k for certain life events, like the purchase of your first home. However, doing so is usually not ideal because you have to pay to pay yourself back AND you’re double taxed on that interest.
Yeah, I get how everything is taxed. Looking into a Roth Conversion, just trying to figure out how much I need to set aside for next April.
Don’t forget that if you take Roth money out before 59.5 the earnings would also be taxable. To get the completely tax free withdrawal you have to take it at least five years after the first Roth contribution and be over 59.5.
That bit about the double tax you pay on 401k loan interest is dead on and something that not many people realize
Just the earnings are taxable during early withdrawal. Any Roth contributions are not going to be taxed.
Full of shit, most don’t let you withdraw at all, only borrow at a 4.75% rate according to fidelity. Piece is rad, keep being you Bolen.
Take every dime to your name, go to Vegas, place it all on 18 Red. Done.
Gotta go on 23. MJ never misses
Someone talk me out of listening to this advice. If I didnt save a dime I could eat at the cheesecake factory down the street every night, or better yet get endless apps at fridays with the boys while knocking some cold ones back
Considering endless apps at Friday’s are $10, I think you can let it slide.
But i could do it everyday instead of cooking at home, thats easily 5k a year after taxes/tip
What’s the fucking point of living, man?
get busy living or get busy dying
Middle class fancy af
Because some point you or your kid are either going to get injured, want to go to school, or will be to old to work anymore. The reason you save is so that when huge life events or when shit hits the fan, you’ll be prepared, as opposed to the idiot who blew his savings on cheesecake factory which ironically gave him diabetes and heart disease with sky high medical bills that he can’t pay off all the while his ungrateful kids won’t shut the fuck up about going to Disney world or the new video game they just have to have while his wife long ago decided to start praying an affair with some tool lawyer.
Save your fucking money.
You’re right but you have no chill.
You missed the point my confused friend
This is what I needed. Thank you Centrum Silver
Too*
I’m using Gboard predictive typing, but don’t be that douche.
You might want to consider pushing up Friday Xanax thoughts to today.