You and your motley team of thieves have infiltrated the highly secured and top-secret Retirement Archives. You’ve made it past the trained guard dogs, the snipers, the laser grid, the biometric scanners. And now, you’re in position to steal the most valuable knowledge of all: how to save and invest to retire some day in dignity and comfort.
Retiring: it’s not just for The Olds anymore!
Over the years we’ve written about how to set yourself up to retire while you’re young, how to stick with a retirement plan during your working years, and even how to achieve FIRE (that’s “financial independence, retire early,” a forced acronym if ever there was one). Here is the sum of our retirement advice, gathered together for intellectual cramming purposes.
If I had to rank all the things I love to do in my precious free time, where would opening a retirement account fall? Let me see, hmm… above a root canal, but below politely accepting a religious tract from a door-knocking missionary. (What can I say? Some of them have pretty nice artwork!)
Have you been procrastinating on opening your retirement account? Feeling lazy? Avoidant? Afraid of the paperwork? Feel like you’d rather use that money on stuff you need or want right now? Obviously, I feel you.
But buck up, son! I’m about to tell you why you can’t afford not to open a retirement account.
Wait… what’s a retirement account again?
To recap with a vast simplification: Americans have access to two main kinds of retirement accounts.
First, a 401(k)—or 403(b), if you work for a nonprofit—is a retirement fund facilitated by your employer. You set it up so they can take money directly out of your paycheck and squirrel it safely away for you to use when you’re terrorizing orderlies in the nursing home. That way you can focus on maintaining your record as Wheelchair Drag Race Champion of Shady Hills Retirement Community and not get distracted by petty financial concerns.
Pictured here: retirement goals.
Second, there’s IRAs (individual retirement accounts), both traditional and Roth. IRAs are very similar to 401(k)s, but they’re attached to you directly instead of your employer. There are other differences, but meh, they’re pretty minor. You can get acquainted with the finer points later.
Retirement accounts are powerful tools for growing wealth and stability for your future self. The trick is you have to opt into your retirement account. If you’re self-employed, or you work for a company that doesn’t offer 401(k)s, you need to go out and open your own IRA. And if you work for a company that offers 401(k)s, you need to sign up and voluntarily tell someone to NOT give you part of your paycheck every month.
As broke as you are right now, ignoring a perfectly good retirement fund is a terrible idea. Because if you do that, you’ll lose money in three different ways.
Yet these two bits of career advice might seem to conflict with one another. After all, if you’re job-hopping your way up the salary food-chain, you might be leaving a trail of old retirement plans behind you to languish. What do you do with your old 401k when you move on to a new employer, or even embrace self-employment?
Enter the 401k rollover: the most hateful, obnoxious, and needlessly complicated bureaucratic process known to man.
Today we’re not only going to demystify the process of how to roll over an employer-sponsored retirement plan like a 401k—we’re going to make it beautifully, sinfully painless. It’s going to be so much fun you guys!!!!!
That’s right, doubters and haters. Despite our joyless misandrist ways, we’ve got male readers. We’ve even got male readers who are so into what we talk about they’re willing to pay us for our work by becoming Patreon donors!
One such donor asked us a thought-provoking question about gender and money that initially kinda stumped me. In short: do women need different financial advice than men?
I had a knee-jerk reaction to say “no” and leave it at that. (Helpful!) But as I thought about it, I realized there are some significant biological and cultural differences worth discussing. Let’s start by reading the particulars of Patron Mat’s excellent question.
Earlier this month at the EconoMe Conference, I gave a speech where I revealed I was planning on retiring at 35 years old.
I practiced the speech many times, mostly in the sacred privacy of my shower. To be honest, I wasn’t happy with it! When I tried to talk about how and why I was going for such an early retirement age, I faltered, rambled, and went on weird tangents that had too many 1990s anime references (or not enough, depending on your perspective).
My youthful days as a theatre kid had imbued me with an unshakable certainty that there was no point in worrying about it. The show would go on. I would get up on the stage and say something, and people would clap politely when I was done. Because they always do that, even when you suck! Ah, the beauty of social contracts!
Surprisingly, the words flowed easiest when I was standing on a stage in front of a few hundred people. I could kinda see the faces of my audience through the haze of the UFO tractor beam lighting. I had the world’s best business partner on stage next to me; the front row was packed with wise and supportive personal finance industry mentors; and past them, a sea of faces belonging to people who intimately understood what I was there to say about financial freedom. Before the most welcoming and encouraging audience imaginable, my words came out effortlessly.
“Work sucks, and I hate it, so I’m not gonna do it anymore.”
I should’ve just said that and trusted this audience to fill my remaining 28 minutes with a standing ovation. Maybe wrap with some local jokes? “Thanks for attending my TedTalk. Go Cincinnati, um, Owlbears? No, no, that’s definitely a D&D monster, hold on… [checks notes] Bearcats! Go Bearcats!”
It’s true. If all goes as planned, I’m retiring at 35 years old this coming spring.
When people ask us about the target demographic of Bitches Get Riches, we tell them “It’s for the children.” You can tell because of the G-rated content!
True, our readers-slash-listeners trend young and untested in the ways of the financial world. We wouldn’t have it any other way, of course, which is why so much of what we write concerns the problems of early-career personal finance.
But what about those who have “made it”—gotten through the lean years and succeeded financially? What do we have to say to the children once they grow up and leave the nest?
In today’s podcast episode, we’re talking about Advanced Financial Steps: the shit you want to get to, but can’t until you get through the boring slog of paying off debt and establishing a financial safety net for yourself.
To this end, we focus a lot on investing: investing in yourself, in your goals, in your community. We don’t simply mean stock market investing, or even financial investing. Treat those investments like the horcruxes they are and spread ’em around—diversify! (Just fulfilling our contractual obligation to include one Harry Potter reference per episode. Read the fine print.)
But how does one determine those post-making-it goals? How do you choose where to stash your horcruxes investments once you’ve joined the ranks of the rich? What’s the most effective way to spread the wealth and lift up those around you?
I wish I could say “all will be revealed in this week’s episode” but really, that’s a lofty fucking goal for a twenty-minute podcast by two day-drunk dumbasses with a microphone. So, uh… adjust your expectations accordingly!
Since the dawn of mankind, certain rivalries have shaped human civilization.
Their power struggles have violently ripped through the fabric of eons, causing the sun to rise in the west and set in the east, the oceans to run dry, and mountains to blow in the wind like leaves. Thus spake Mirri Maz Duur, noted economist.
Today we explore one of these ancient grudges in a segment we call:
INVESTING DEATHMATCH.
Yes that’s right, my precious seekers of financial literacy. Once again, we’re going to break down two forms of investment and pit them against each other in a metaphorical battle for the soul of economic solvency!
It’s time for another thrilling episode of… INVESTING DEATHMATCH! In which we pit two forms of investing against each other and see which one escapes the struggle unscathed.
Today’s fight is an ancient grudge match between two opposing philosophies: extreme caution and risk-taking. In one corner we have investing in the stock market—an inherently risky proposition but one that comes with untold rewards. In the other, we have the option of the risk-averse everywhere: just… not with the stock market, and instead, playing it safe by sticking your money in a savings account.
It occurred to us that we needed to cover this battle to dispel some incorrect assumptions about money management.
After the Great Recession and stock market crash of 2008, a lot of young people coming of age in a new and fragile economy were scared away from the stock market. They saw the grownups around them ruined by plummeting stocks and improperly leveraged debt.
It’s time for another thrilling episode of Investing Deathmatch, in which two forms of investing enter the ring, and only one leaves victorious. Or, more accurately, we decide that investing is a far more complicated affair than wrestling and the outcome of the fight depends on a number of nuanced factors.
But I digress.
TO THE BLOOD SPORT!
This fight has a long and sordid history. We’ll be uncovering old wounds, dredging up arguments long held in stalemate. We’ll be discussing a topic about which every damn personal finance blogger on the Internet has a very firm opinion. And we’ll be demystifying an age-old enigma of financial independence.
The topic of regret is a controversial one, especially in personal finance. Whole treatises have been written on the premise that if you live frugally during your twenties and make sound financial decisions for the future, you’ll regret wasting your youth as a joyless loner.
We reject this characterization of a frugal youth for a couple of reasons:
It doesn’t take a lot of (or any) money to have fun with your friends. In fact, some of the best times I’ve had with friends involved spending zero dollars!
You can (and should) pursue fun long past your twenties. A great woman once said that if you’re not getting happier as you grow older, you’re fucking up. And I whole-heartedly agree! Life has only gotten better after thirty for me.
You’re at more risk of regretting not saving than you are at risk of regretting not going out to da clerb that one time. Saving for retirement in your twenties isn’t a ticket to Regretsville or Unfuntown. It’s a way of ensuring you’ll be able to have fun later in life instead of working forever.
And yet fear of this kind of regret persists.
FOMO
I get it! No one wants to constantly feel left out. FOMO is real! But I also firmly believe that no one wants to get to retirement age only to realize that all the money they could’ve lived on for another twenty to thirty years got puked out after a night of binge drinking. (It has been said that you’d have to drink a lot of alcohol to puke out your retirement savings. These naysayers underestimate both the power of compound interest and the alcohol tolerance of the average 23-year-old.)
Yet I don’t fear regretting my frugal twenties when I get to my twilight years. Now, depending on a single, barely funded income stream after retirement, one that could easily go up in a puff of smoke… that’s something worth regretting.
