Why Living in the Moment May Sabotage Your Future - Black Enterprise

Why Living in the Moment May Sabotage Your Future

Earl "Butch" Graves Jr., President & CEO, Black Enterprise

I can’t fathom why so many people are content with sabotaging their retirement plans. Yet year after year, hordes of young workers–not to mention a good number of mid-career professionals–refuse to put away enough money for the inevitable.

Building a nest egg for retirement isn’t a three-card monte game, in which you spend several rounds trying to figure out the face card in an attempt to collect money, nor is it a quick-buck proposition. It’s achievable for those who make a commitment to methodical, disciplined long-term wealth building.

For a little more than 30 years, American workers have been given the opportunity to invest for retirement after Congress adjusted the tax code to enable you to deduct a portion of your pre-tax salary and let your dollars grow through a tax-deferred vehicle known as the 401(k) (or 403(b)). What’s truly remarkable about these plans is that not only does your employer present you with an array of investment choices–from the safest bond fund to riskier but higher-return international stock funds–but many companies will also match a portion of your committed investment dollars. That’s free money, folks! Currently, the maximum contribution per individual is $16,500. And plan participants who reach age 50 during the calendar year can make an additional catch-up contribution of $5,500.

Some of you might be scratching your head, asking yourself “Why am I getting a history lesson on employer-sponsored retirement plans?” I’m sure many of you attend a meeting every six months at your job to hear about the virtue and value of participating in such a vehicle. If that’s the case then I have a simple question for those who haven’t joined your company plan yet: Why are you squandering this opportunity?

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