Important life lesson I've learned from working at a bank.

[651akathepaul]

Never thought I'd find myself progressing my career in the world of banking, but I am. And it's somewhat been a blessing in disguise. I get to see people and how they interact with money on a day-to-day basis. Maybe you guys can take something away from one of my major lessons learned.

Habitually contribute to your 401(k), IRA or retirement account at all costs

Here's why:

Spoiler: Warning: Spoiler!

I can't tell you how many customers I interact with that had done such a poor job on contributing a sufficient amount into their retirement accounts consistently that they now live paycheck to paycheck (social security) well into their 70's.

How sad will it be when you turn 80 and your social security is all that you'll have to live by? It may not even exist, for one, but if it does, is that how you want to live? Remember, you probably won't be working so that will have to pay ALL your bills and account for ALL your living expenses. You won't have much left for what you think retirement is supposed to be about (golfing, travelling, spoiling grandkids).

I've seen it. And when some of these people come to me in tears because they've had an emergency, but have no where to turn for excess funds, I feel sad because I'm helpless. As are they, but it was poor planning in 98% of their cases that left them in this predicament. Sorry, but don't expect to get personal loans just because you're old and have had so many years of "service."

Possible solution:

Spoiler: Warning: Spoiler!

Sock away at least 10% (my opinion) into your retirement plan each paycheck. I'm at 15% because I can still live day to day, pay my bills, and have some excess to live my life. All the while, if that keeps up for 40 years then I should be just fine come retirement. If your employer matches then awesome! Still do more. Doing the minimum just to get the match still may not be enough to live the lifestyle you want in retirement.

To end it:

Spoiler: Warning: Spoiler!

It's truly eye-opening to see countless stories that all involve poor planning for the future that result in people with nothing to show for many many years of work and having never achieved any of their dreams. I wouldn't be surprised if many see this and either don't read or fall victim to "I'm still young...I got time." Yeah, well, join the long line of those hoping to get handouts when you're older. Hopefully some of you will get it and will ultimately prosper when you're retired.

Ask questions if you want.

 

[Top Boy]

+Rep.

Im personally one of those people that after the age of 60... I'll just hand my grandkids the shotty, have them take me out back, and tell em to make it quick.

My only fears in life is tight spaces and old age. I'd rather just die young.

 

[htg designs]

I think a lot of ppl think there will be a point where they get really rich, and get old and live off that...or maybe its just me .

 

[mustbetheshoe58]

I've worked at a bank for 2 years, it's definitely an eye opener for people to start saving more for retirement especially if there are company incentives such as matching dollar for dollar contributions.

The bank life ain't for me and its not for everyone but to each its own. Glad people are enjoying working at a bank

 

[651akathepaul]

I think a lot of ppl think there will be a point where they get really rich, and get old and live off that...or maybe its just me .

Very true. When I was in my early 20's I felt this...Until I realized I have to work hard to get to that level and that it doesn't just happen. Having said that, I still may hit it big somewhere down the road, but many who consistently stick with a plan like this will do just fine in retirement regardless.

I've worked at a bank for 2 years, it's definitely an eye opener for people to start saving more for retirement especially if there are company incentives such as matching dollar for dollar contributions.

The bank life ain't for me and its not for everyone but to each its own. Glad people are enjoying working at a bank

Didn't think it was for me either. Now I'm grateful and using it as the ultimate stepping stone. But yes...The matching contribution is great. It's usually capped at 3% to 6% though..Still doubles your money if you do that as a minimum, but I feel much more comfortable making sure I'll achieve my goals by putting away more more more.

 

[rell826]

Unfair to lump 98% of the people as poor planning. The last six years have been hell on people's retirement plans especially those who were laid off and never recovered. People have had to raid their 401ks after their savings accounts were depleted.

 

[guzzy]

Can the 401k ever be taken(frozen) away???

 

[216301baller]

i needed that op...

 

[651akathepaul]

Unfair to lump 98% of the people as poor planning. The last six years have been hell on people's retirement plans especially those who were laid off and never recovered. People have had to raid their 401ks after their savings accounts were depleted.

Maybe so. I'll admit that the number was just thrown out there, but fairness is not part the equation, my friend.

And if the last six years are an indicator of one's retirement then they should have recouped all of what was lost from the majority of those investments if they stayed on the course. To them dipping into their savings because of lack of liquidity due to joblessness or whatever, then that can be planned for. I never condone that people throw so much money into a retirement plan without having that nice cushion of liquid funds that can be accessed for emergencies or in times you are describing.

Interesting stat out there that I don't know verbatim, but on average the stock market has returned around 9-11% on investment, yet the average INVESTOR is much less than that...Say 5% maybe...Why is that? They panic and pull when things get bad and get back in when things have calmed. They just missed the most lucrative point for all investors! The dip!

 

[ecruteakcityboy]

I'm not saving up
Gonna spend all this money while I'm young.

Spoiler: Warning: Spoiler!

Jk I put money into my savings account every month. Would be more if I weren't in college

 

[651akathepaul]

Can the 401k ever be taken(frozen) away???

Well, for the most part your retirement accounts are untouchable, but there's always the exceptions. I'm not quite the bona fide expert yet, but I know that if your company goes bankrupt then maybe it can be frozen, but I don't know specifics or legal ramifications of that.

They can essentially freeze if you die, but what's the concern to you with that?

Another case is usually in divorce. Again, it's another legal deal, but I believe part of a divorce settlement can be 50% of your 401(k).

Cannot be touched with debt collection. Same with child support unless its part of the divorce settlement.

 

[651akathepaul]

i needed that op...

For sure.

 

[dathbgboy]

Man, I want to start an IRA bad but can't afford to. I can barely afford to pay my rent. Been looking for a better job for over a year and have yet to find one. I'm 3yrs away from 30 with nothin to show for it besides debt. Feels bad man

 

[651akathepaul]

Man, I want to start an IRA bad but can't afford to. I can barely afford to pay my rent. Been looking for a better job for over a year and have yet to find one. I'm 3yrs away from 30 with nothin to show for it besides debt. Feels bad man

Well, the good thing is that it's never too late to start one so even though you're 27, you still have time. It's the combination of saying that with continual inaction or lack of awareness that's the problem. 30 isn't too old to build a good retirement, bro...So long as your conscience of the fact that it's important to your future then that's a big step in itself, I believe. Priorities are just that and you have yours...I wouldn't be panicking much right now, rather just trying to get to place where building for retirement is more comfortable for me to afford. You'll be aight.

 

[Gill Baka Esq. LLC.]

OP can you educate me. I remember wayyyy wayyyy back that Dirty informed us on ezboard to invest in an IRA at 21 so that when it came to reap the benefits...we would get like $1m upon retiring.

I just turned 28 a couple days ago and i'm in grad school right now. My career should start when i'm 30. What are my best options in terms of reliable investment for my old age?

 

[651akathepaul]

You're not old.

Most people these days don't even really come into their own career-wise. until they're 30 anyway, so you good. Dirty was right that getting started at 21 is a good advantage (compounding interest and what not), but it's not nearly the only age acceptable for starting a retirement where you can achieve $1 MIL.

When you start your career then read all you can about your employers benefits regarding retirement, among other things. Find out if they match a percentage of your contribution. If they do, then at what point in your service for that employer do they start the match? With mine it was after my first full year of employment. Then start playing with numbers to figure out the most you can afford to put into the 401k. As in...If you put away %15 would really miss "X" amount of dollars that probably would've been spent at the bar? They may have calculators to help you with that. If not, you can find a wealth of that stuff online.


As for now, I would start reading what you can about starting your own Roth IRA if you think you have excess income or feel you can make yourself have excess income. Start putting what you can in there, no matter how little you think it is, it'll help. Even if you don't feel like you have the means to start an IRA, then reading on it will only help you prepare in knowing when you're ready and what to look for and/or do. Large banks are traditionally reliable in housing your IRA's, but obviously feel free to research and go where you feel most comfortable. That's most important in my opinion...Peace of mind.

Since you're in grad school then it may not be time for you yet...That's ok. Instead of putting money into a retirement then practice on building a savings. Use it to start a buffer for emergencies and eventually, when you start your career, put the excess into a retirement plan once you know your path is more secure. Once you get your career up and running then you can really start pouring it into your retirement and before you know it, you'll have build a hefty nest egg that should go a long way for when you retire all while living the life you want to live in the present.

 

[mr jordan04]

+Rep.

Im personally one of those people that after the age of 60... I'll just hand my grandkids the shotty, have them take me out back, and tell em to make it quick.
Get me to 65 and I'm straight

My only fears in life is tight spaces and old age. I'd rather just die young.

 

[651akathepaul]

+Rep.

Im personally one of those people that after the age of 60... I'll just hand my grandkids the shotty, have them take me out back, and tell em to make it quick.
Get me to 65 and I'm straight

My only fears in life is tight spaces and old age. I'd rather just die young.

Nothing wrong with that...You guys may even end up living it out this way. If that works then go for it, but keep in mind that things are always changing with time and age. What if you get married and have kids and suddenly want to stick around for grandkids? Or if no kids then what if somewhere down the road something along the way inspires you to live as long as you can? Well, if you have no money then you'll feel foolish and unprepared then ultimately miserable. Just remember that the money is always yours. Put it in a retirement and if you still wanna stay the course with your plan then cash out and have a blast in your last few years of living. If your plans change then you'll be grateful you stashed away that money.

 

[nazdrowie]

meh i dont really know if ill even make it that long...congenital diseases have claimed a good number of people from my family at early ages...i figure its gonna happen to me so i minus whale enjoy the ride

i will say i need to start contributing to my 401k, tho. my company does match (i think)

 

[al audi]

Somebody told me life is pointless after the age of 55 an he actually wants to die in his 50s. Then he asked me......think about it what do you have forward to look at after 55 an I was like........damn.......

 

[fresh out dabox]

Unfair to lump 98% of the people as poor planning. The last six years have been hell on people's retirement plans especially those who were laid off and never recovered. People have had to raid their 401ks after their savings accounts were depleted.

 

[debso]

I work at a bank (but not a branch) and can consign the OP. banking is a business and nothing more. The bank is not your friend and doesn't give a **** about you. Do not expect anything from the bank that won't benefit the bank. You're free to get turned down by other banks after you pull your -32 dollars out of your current bank because you're pissed that your current bank won't give you a loan.

In all seriousness, protect, monitor and be aware of your credit and save for retirement and get life insurance. Oh, and invest.
Mad elderly people have nothing and have to learn to be content with it. Don't become one of them by not thinking about retirement earlier in life.

Lastly, usually the wealthier elderly people will share the same advice that OP, myself and a few others have. I definitely listen to them.

 

[jsflip]

OP, how'd you start a career in banking?  After getting a decent paying job after college (major: Psych), I became heavily interested in personal finance and becoming a Certified Financial Adviser/Planner crossed my mind.  It opened my eyes when I saw a chart about compounding interest + seeing all my friends put down payments on new cars.  When you realize it's possible to retire by 35 (aka mrmoneymustache.com), locking your finances onto a depreciating item isn't the best idea.

Check out how $1,200 can grow over time: http://goo.gl/ST6f

It's never too late to start saving/investing.  I'm 25, but I wish I started when I was 18.  Much of it is behavioral, and now that I'm maturing I'd rather buy $3,000 of mutual funds vs. $3,000 in clothes.

 

[antidope]

Cosigning on all of this. I work in financial services/Investments and its crazy when you see some people who are in their 80s who are set just becuase they made their periodic contributions. I also agree with the 10% contribution of your paycheck. Thats what I do into my 401k and the difference between the 6% match that my firm offers and the 10% that I'm electing to put in is negligible to me. Its money that I would have wasted on BS that will serve me better in the long run. It also makes me want to learn more about the securities market. I saw a guy who bought $10,000 of microsoft stock when they had their IPO in the 80s and with all the stock splits and rise in value he now has 28 million dollars worth.

 

[frshstunna]

I work with the Aging department in my area and its truly sad and amazing some of the stories and situations we deal with...we got people that worked for 40+ years calling for help just to buy groceries or cant afford a cab ride to the doctors smh