Making a List...

  “You better watch out, you better not cry, you better not pout…”

Those are, of course, the opening lyrics to that holiday classic, “Santa Claus is Coming to Town.” And while the tune is jaunty enough, the message — that there’s some kind of elfin “eye in the sky” keeping tabs on us has always struck me as just a little bit…creepy.

That said, once upon a time, as Christmas neared, it was not uncommon for my wife and I to caution our occasionally misbehaving brood that they had best be attentive to how their (not uncommon) misbehaviors might be viewed by the big guy at the North Pole.

In support of that notion, a few years back — well, now it’s quite a few years back — when my kids still believed in the (SPOILER ALERT) reality of Santa Claus, we discovered an ingenious website[i] that purported to offer a real-time assessment of their “naughty or nice” status.

Indeed, no amount of parental threats or admonishments — in fact, nothing we ever said or did — EVER managed to have the impact of that website — if not on their behaviors (they were kids, after all), then certainly on their level of concern about the consequences.

In fact, in one of his final years as a “believer,” my son (who, it must be acknowledged, had been particularly “naughty” that year) was on the verge of tears, panic-stricken — following a particularly worrisome “reading”[ii] — concerned not so much that he’d misbehaved, and certainly not that he’d disappointed his parents with his misbehaviors — but that as a result, he'd find nothing under our Christmas tree but the lumps of coal[iii] he so surely “deserved.”

Naughty or Nice?

Every year about this time we read survey after survey recounting the “bad” savings behaviors of American workers. And, despite the regularity of these findings, most of those responding to the ubiquitous surveys about their (lack of) retirement confidence and their (lack of) preparations don’t offer much, if anything, in the way of rational responses to those shortcomings. Yes, even though they apparently see a connection between their retirement needs and their savings (mis)behaviors. The most recent “target” was the oft-overlooked Gen X — who, at least according to one recent survey is (even) less prepared than the Boomers OR Millennials (Gen X just can’t catch a break!)   

The reality has long been that a significant number will, when asked to assess their retirement confidence, generally acknowledge that there are things they could — and know they should have —done differently. Retirees routinely bemoan and regret their lack of attention to such things. Sadly, if there’s anything as predictable as the end of year regrets, it’s the perennial list of new year’s resolutions to (finally) do something about it. And the cycle repeats.

So if they know they’ve been “naughty” — why don’t they do something about it?

Well, some certainly can’t — or can’t for a time — but most who respond to these surveys seem to fall into another category. It’s not that they actually believe in a retirement version of St. Nick, though that’s essentially how they seem to (mis)behave. That said, they continue to carry on as though, somehow, these “naughty” savings behaviors throughout the year(s) notwithstanding, they'll be able to pull the wool over the eyes of that myopic, portly old gentleman in a red snowsuit. They act as though at their future retirement date (which a growing number say will never arrive), despite their lack of attentiveness during the year(s), that benevolent elf will descend their chimneys with a bag full of cold, hard cash from the North Pole. Or that sufficient time (or market gain) remains to remedy their “wrongs.”

Unfortunately, like my son in that week before Christmas, many worry too late to meaningfully influence the outcome.

A World of Possibilities

Now, the volume of presents under our Christmas tree never really had anything to do with our kids’ behavior(s). As parents, we nurtured their belief in Santa Claus as long as we thought we could (without subjecting them to the ridicule of their classmates[iv]), not because we truly expected it to modify their behavior (though we hoped, from time to time), but because we believed that children should have a chance to believe, if only for a little while, in those kinds of possibilities.

We all live in a world of possibilities, of course. But as adults we realize — or should — that those possibilities are frequently bounded in by the reality of our behaviors, as well as our circumstances. And while this is a season of giving, of coming together, of sharing with others, it is also a time of year when we should all be making a list and checking it twice — taking note and making changes to what is “naughty and nice” about our personal behaviors — including our savings behaviors. To “be good,” not just for “goodness” sake, but for what we all hope is the “goodness” of financial “freedom” in our lives.

Yes, Virginia,[v] as it turns out, there is a retirement savings Santa Claus — but he looks a lot like you, assisted by “helpers” like your workplace retirement plan, your employer’s matching contributions — and your trusted retirement plan advisors and providers. 

It’s time to do more than just make a list — but it’s a place to start.

Happy Holidays!

• Nevin E. Adams, JD

 

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[i] And it’s still online at http://www.claus.com/naughtyornice/index.php.htm

[ii] And yes, though this was before smartphones, there was a tendency to constantly check in. That said, there do appear to be a number of apps online now that purport to fulfill a similar function. 

[iii] For those unfamiliar with that reference… https://abc7chicago.com/st-nicholas-day-saint-lumps-of-coal/4846172/

[iv] At one point one of my daughters refused to contemplate the possibility of a 2^nd grade “relationship” because the boy didn’t believe in Santa!

[v] In case you’re curious as to that reference… https://publicdomainreview.org/collection/yes-virginia-there-is-a-santa-claus-1897/

Are Your Retirement Savings Naughty? Or Nice?

A few years back – when my kids were still “kids” – and believed in the reality of Santa Claus – we stumbled across an ingenious website.

This was a website that purported to offer a real-time assessment of one’s “naughty or nice” status.
Now, as Christmas approached, it was not uncommon for us as parents to caution our occasionally misbehaving brood that they had best be attentive to how their actions might be viewed by the big guy at the North Pole.

But nothing we ever did or said had the impact of that website – if not on their behaviors (they were kids, after all), then certainly on the level of their concern about the consequences. In fact, in one of his final years as a “believer,” my son (who, it must be acknowledged, had been particularly naughty that year) was on the verge of tears, distraught that he’d find nothing under the Christmas tree that year but the lump of coal and bundle of switches he surely “deserved.”

Naughty Behaviors?

When one considers the various surveys that, on the one hand, suggest relatively modest retirement preparations, alongside others that purport to find high degrees of confidence in retirement finances, one can’t help but wonder if American workers imagine that some kind of benevolent elf will drop down their chimney with a bag full of cold cash from the North Pole. They behave as though, somehow, their bad savings behaviors throughout the year(s) notwithstanding, they’ll be able to pull the wool over the eyes of a myopic, portly gentleman in a red snowsuit, or perhaps pull off some kind of compounding “magic” with some last-minute savings scramble.

Not that they actually believe in a retirement version of St. Nick, but that’s essentially how they behave, even though, like my son, a growing number evidence some concern about the consequences of their “naughty” behaviors. Also, like my son, they tend to worry about it too late to influence the outcome – and don’t ever change their behaviors in any meaningful way.

Ultimately, the volume of presents under our Christmas tree never really had anything to do with our kids’ behavior. As parents, we nurtured their belief in Santa Claus as long as we thought we could (without subjecting them to the ridicule of their classmates), not because we actually expected it to modify their behavior (though we hoped, from time to time), but because we thought that children should have a chance to believe, if only for a little while, in those kinds of possibilities.

We all live in a world of possibilities, of course. But as adults we realize – or should – that those possibilities are frequently bounded in by the reality of our behaviors. And though this is a season of giving, of coming together, of sharing with others – it is also a time of year when we should all be making a list and checking it twice – taking note, and making changes to what is naughty and nice about our savings behaviors.

Yes, Virginia, there is a Santa Claus – but he looks a lot like you, assisted by “helpers’ like the employer match, your financial adviser, the investment markets, and tax incentives to save.

Happy Holidays!

- Nevin E. Adams, JD

Incredibly, the Naughty or Nice site is still  online (at http://www.claus.com/naughtyornice/index.php.htm) – so check it out – ’cause you just never know…

A Retirement Savings Santa Claus?

One could certainly argue that many Americans act as though at retirement some kind of benevolent elf will drop down their chimney with a bag full of cold cash from the North Pole.

They behave as though, somehow, their bad savings behaviors throughout the year(s) notwithstanding, they’ll be able to pull the wool over the eyes of a myopic, portly gentleman in a red snowsuit.

A few years back — well, now it’s quite a few years back — when my kids still believed in the reality of Santa Claus, we discovered an ingenious website that purported to offer a real-time assessment of their “naughty or nice” status.

Now, as Christmas approached, it was not uncommon for us to caution our occasionally misbehaving brood that they had best be attentive to how those actions might be viewed by the big guy at the North Pole.

But nothing we said ever had the impact of that website — if not on their behaviors (they were kids, after all), then certainly on the level of their concern about the consequences. In fact, in one of his final years as a “believer,” my son (who, it must be acknowledged, had been particularly naughty that year) was on the verge of tears, worried that he’d find nothing under the Christmas tree but the coal and bundle of switches he so surely “deserved.”

In similar fashion, must of those responding to the ubiquitous surveys about their retirement confidence and preparations don’t seem to have much in the way of rational responses to the gaps they clearly see between their retirement needs and their savings behaviors. Not that they actually believe in a retirement version of St. Nick, but that’s essentially how they behave, though a significant number will, when asked to assess their retirement confidence, express varying degrees of doubt and concern about the consequences of their “naughty” behaviors.

Like my son in that week before Christmas, they tend to worry about it too late to influence the outcome.

Ultimately, the volume of presents under our Christmas tree never really had anything to do with our kids’ behavior, of course. As parents, we nurtured their belief in Santa Claus as long as we thought we could (without subjecting them to the ridicule of their classmates), not because we expected it to modify their behavior (though we hoped, from time to time), but because we believed that kids should have a chance to believe, if only for a little while, in those kinds of possibilities.

We all live in a world of possibilities, of course. But as adults we realize — or should — that those possibilities are frequently bounded in by the reality of our behaviors. This is a season of giving, of coming together, of sharing with others.

However, it is also a time of year when we should all be making a list and checking it twice — taking note, and making changes to what is “naughty and nice” about our savings behaviors.

Yes, Virginia, there is a Santa Claus — but he looks a lot like you, assisted by “helpers” like your workplace retirement plan, the employer match, and your retirement plan advisor.

Happy Holidays!

- Nevin E. Adams, JD

P.S.: The Naughty or Nice website is still online, here.

6 Stocking Stuffers for Retirement Participants

I can remember as a kid paging through the pages of various Christmas catalogues, earmarking the pages that contained the various things that I hoped Santa Claus (or his emissaries, my parents) would take as hints.

These days such things have been replaced by online “wish lists” – and if they’re not quite as much fun to page through, they’re doubtless more effective.

So, in the spirit of the holiday season, here are some “presents” that I hope participants find in their retirement plan “stockings” during the coming year:

Automatic reenrollment for longer-term workers.

New hires, regardless of age, are these days routinely defaulted into some type of qualified default investment alternative, whether it be a managed account, target-date fund, or balanced fund. However, workers who have been in the plan for awhile are generally not accorded that courtesy. Rather, ostensibly on the premise that they have, at some previous point in their careers, made an affirmative election to be in the funds they are currently invested. Sadly, we all know that regardless of how affirmative that initial decision was, the odds that it has – ever – been reconsidered, much less reallocated, lies somewhere between slim and “are you kidding?” It’s time we gave current workers the same option we give new hires – a good swift shift into a QDIA (with an opportunity to opt out, of course).

An easy way to roll over distributions.

Okay, I know it’s gotten easier. But if it’s actually gotten easy to rollover your 401(k) balance from a former employer to a current employer – well, that would be news worth reporting (I’m sure I’ll hear from someone). We all know how difficult it can be for participants to keep up with even a single 401(k) account. How much harder is it for them to keep up with – or remember – all those stray accounts left behind at prior employers, or rolled into retail-priced IRAs? It’s better for them – and it could well be better for the plan as well.

More time to repay participant loans after job change – or portability of the obligation.

No plan sponsor wants to deal with the processing of manual loan repayments once an individual has left their employ and payroll. But we all know that a major source of leakage from retirement savings comes when a participant who has a loan outstanding from the plan changes jobs. The individual may or may not be in a position to come up with the funds to pay off that loan at termination, but likely won’t, and the ensuing “deemed” distribution inevitably becomes a real one, and that just ensures that the participant will wind up with a big tax bill (that they probably won’t be in a good position to handle, either). More time to repay that obligation – or some expanded portability – would surely go a long way. Though this one is going to require some help from lawmakers.

Automatic escalation of contributions.

Though adoption has plateaued somewhat in recent years, automatic enrollment, and automatic investment in QDIAs has surely made a significant, positive impact on retirement security. What hasn’t been quite so “automatic,” even though it was incorporated as part of the PPA’s automatic enrollment safe harbor, is the auto-escalation of contributions following that enrollment. More’s the pity. This is a chance to let participants set in motion a systematic improvement of their retirement plan fortunes – and with a minimum of effort. Participants who are auto-enrolled at 3% need to be auto-escalated… automatically.

Some kind of retirement income alternative.

It’s (still) ironic to me that we spend decades working with participants trying to help them make prudent, well-reasoned savings and investment decisions – and then, at the most critical moment (distribution), most just get pointed in the general direction of a rollover IRA or annuity. Both can be effective, of course, but can be quite the opposite as well. We shouldn’t just leave participants to their own “advices” at this critical juncture – and there is a whole new generation of options to choose from. But here we could use some help from the legislative “elves” as well.

A workplace retirement plan.

It’s easy to overlook this one, particularly for those of us who work with these programs on an ongoing basis. The sad fact is that lots of working Americans (though not the 50% that some still claim) still don’t have access to any kind of workplace retirement plan. That means no convenience of payroll deposit, no assistance from an employer match, no education and/or advice about how to properly invest their retirement savings – and, in all likelihood, no retirement savings.

And that adds up to being a big lump of coal in your retirement stocking!

- Nevin E. Adams, JD

Naughty or Nice?

A few years back — when my kids still believed in the reality of Santa Claus — we discovered an ingenious website.

This was a website that purported to offer a real-time assessment of your “naughty or nice” status.

Now, as Christmas approached, it was not uncommon for us to caution our occasionally misbehaving brood that they had best be attentive to how those actions might be viewed by the big guy at the North Pole. But nothing ever had the impact of that website — if not on their behaviors (they were kids, after all), then certainly on the level of their concern about the consequences.

In fact, in one of his final years as a “believer,” my son (who, it must be acknowledged, had been particularly naughty that year, and he knew it) was on the verge of tears, worried that he’d find nothing under the Christmas tree but the nuggets of coal in his stocking he so surely deserved.

Bad Behaviors?

With so many reports purporting to chronicle the sorry state of retirement confidence and lack of preparations (think the two might be connected?) among Americans, it seems that many participants act as though some kind of benevolent elf will drop down their chimney with a bag full of cold cash from the North Pole on retirement’s eve. They behave as though, somehow, their bad savings behaviors — and incessant warnings — throughout the year(s) notwithstanding, they’ll be able to pull the wool over the eyes of a myopic, portly gentleman in a red snow suit.

Ultimately, the volume of presents under our Christmas tree never really had anything to do with our kids’ behavior, of course. As parents, we nurtured their belief in Santa Claus as long as we thought we could (without subjecting them to the ridicule of their classmates), not because we expected it to modify their behavior (though we hoped so from time to time), but because we believed that kids should have a chance to believe, if only for a little while, in those kinds of possibilities.

We all live in a world of possibilities, of course. But as adults we realize — or should realize — that those possibilities are frequently bounded in by the reality of our behaviors, be they “naughty” or nice. This is a season of giving, of coming together, of sharing with others. However, it is also a time of year when we should all be making a list and checking it twice — taking note, and making changes to what is naughty and nice about our savings behaviors.

Yes, Virginia, there is a Santa Claus — but he looks a lot like you, assisted by “helpers” like the employer match, your financial adviser, investment markets and the tax incentives that encourage workplace retirement plans and your ability to save.

Happy Holidays!

- Nevin E. Adams, JD

p.s. The Naughty or Nice site is still online (at http://www.claus.com/naughtyornice/index.php.htm), and it now includes suggestions for how to improve your standing, should that be required. Those looking for suggestions on how to improve your savings standings can check out www.choosetosave.org, along with the Ballpark E$timate, to see how you’re doing!

"Naughty" or Nice?

A few years back — well, now it’s quite a few years back — when my kids still believed in the reality of Santa Claus, we discovered an ingenious website that purported to offer a real-time assessment of their "naughty or nice" status.

Now, as Christmas approached, it was not uncommon for us to caution our occasionally misbehaving brood that they had best be attentive to how those actions might be viewed by the big guy at the North Pole.

But nothing we said ever had the impact of that website — if not on their behaviors (they were kids, after all), then certainly on the level of their concern about the consequences. In fact, in one of his final years as a "believer," my son (who, it must be acknowledged, had been particularly naughty that year) was on the verge of tears, worried that he'd find nothing under the Christmas tree but the coal and bundle of switches he so surely deserved.

One could argue that many participants act as though at retirement some kind of benevolent elf will drop down their chimney with a bag full of cold cash from the North Pole. They behave as though, somehow, their bad savings behaviors throughout the year(s) notwithstanding, they'll be able to pull the wool over the eyes of a myopic, portly gentleman in a red snowsuit. Not that they actually believe in a retirement version of St. Nick, but that's essentially how they behave, though a significant number will, when asked to assess their retirement confidence, express varying degrees of doubt and concern about the consequences of their "naughty" behaviors. Like my son in that week before Christmas, they tend to worry about it too late to influence the outcome.

Ultimately, the volume of presents under our Christmas tree never really had anything to do with our kids' behavior, of course. As parents, we nurtured their belief in Santa Claus as long as we thought we could (without subjecting them to the ridicule of their classmates), not because we expected it to modify their behavior (though we hoped, from time to time), but because we believed that kids should have a chance to believe, if only for a little while, in those kinds of possibilities.

We all live in a world of possibilities, of course. But as adults we realize — or should — that those possibilities are frequently bounded in by the reality of our behaviors. This is a season of giving, of coming together, of sharing with others. However, it is also a time of year when we should all be making a list and checking it twice — taking note, and making changes to what is “naughty and nice” about our savings behaviors.

Yes, Virginia, there is a Santa Claus — but he looks a lot like you, assisted by "helpers" like your workplace retirement plan, the employer match, and your retirement plan advisor.

Happy Holidays!

- Nevin E. Adams, JD

P.S.: The Naughty or Nice website is still online, here.

Naughty or Nice?

Editor’s Note: There’s so much going on in the world of retirement saving and investing that I never feel the need (or feel like I have the opportunity) to recycle old columns – but this one has a certain “evergreen” consistency of message that always seems appropriate – particularly at this time of year.


A few years back—when my kids still believed in the reality of Santa Claus—we discovered an ingenious Web site that purported to offer a real-time assessment of their "naughty or nice" status.

Now, as Christmas approached, it was not uncommon for us to caution our occasionally misbehaving brood that they had best be attentive to how those actions might be viewed by the big guy at the North Pole. But nothing ever had the impact of that Web site - if not on their behaviors (they're kids, after all), then certainly on the level of their concern about the consequences. In fact, in one of his final years as a "believer," my son (who, it must be acknowledged, had been PARTICULARLY naughty) was on the verge of tears, worried that he'd find nothing under the Christmas tree but the coal and bundle of switches he surely deserved.

Naughty Behaviors?

One might plausibly argue that many participants act as though some kind of benevolent elf will drop down their chimney with a bag full of cold cash from the North Pole. They behave as though, somehow, their bad savings behaviors throughout the year(s) notwithstanding, they'll be able to pull the wool over the eyes of a myopic, portly gentleman in a red snow suit. Not that they actually believe in a retirement version of St. Nick, but that's essentially how they behave, even though, like my son, a growing number evidence concern about the consequences of their "naughty" behaviors. Also, like my son, they tend to worry about it too late to influence the outcome—and don't change their behaviors in any meaningful way.

Ultimately, the volume of presents under our Christmas tree never really had anything to do with our kids' behavior, of course. As parents, we nurtured their belief in Santa Claus as long as we thought we could (without subjecting them to the ridicule of their classmates), not because we expected it to modify their behavior (though we hoped, from time to time), but because, IMHO, kids should have a chance to believe, if only for a little while, in those kinds of possibilities.

We all live in a world of possibilities, of course. But as adults we realize—or should realize—that those possibilities are frequently bounded in by the reality of our behaviors. This is a season of giving, of coming together, of sharing with others. However, it is also a time of year when we should all be making a list and checking it twice—taking note, and making changes to what is naughty and nice about our savings behaviors.

Yes, Virginia, there is a Santa Claus—but he looks a lot like you, assisted by "helpers" like the employer match, your financial adviser, investment markets, and tax incentives.

Happy Holidays!

Nevin E. Adams, JD

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The Naughty or Nice site is still online (at http://www.claus.com/naughtyornice/index.php.htm). An improved site and much better internet connection speeds produce a lightning fast response – more’s the pity. I used to like the sense that a computer was actually having to crank through the data!