By Julie Jason, originally posted on Forbes.com.
At a time when we are working hard to survive during this pandemic, we must not forget that we have a future.
Well before the coronavirus arrived on the scene, I was on the lookout for peer-to-peer 401(k) influencers. In that role, I initiated a nationwide search for those leaders, 401(k) participants who saw the benefit of helping themselves and their peers achieve retirement security.
I’d like to introduce you to three of them. Bari Scheinbach from Movéo, Laura Dobbins from Magellan Health and Steven Dibble from Stratford School.
These individuals understand the wisdom of starting to save early, keeping an eye on a long-term goal of retirement security, staying the course even in disruptive markets such as these and avoiding the temptation to halt contributions during market declines – a time when payroll deductions “buy” more of an investment at discount prices.
Let me share some of their insights one at a time.
Laura Dobbins, a senior manager of analytics at Magellan Health, said: “Several years ago, convinced of how powerful a well-funded 401(k) account could be, I started a personal finance blog, MyShinyNickels.com. I’ve helped hundreds of readers change their financial outcome and reach savings and 401(k) milestones of their own. I’ve appeared on several podcasts, sharing my own 401(k) and finance success story.”
Bari Scheinbach, supervisor at Movéo, acts as an informal financial mentor in her business. She said: “I have taken it upon myself to offer the more junior associates advice (when asked, of course) on how to improve their financial lives, and a key component of our discussions is always the pillar of a 401(k) … I want to be sure I’m sharing the wealth, so to say, and encouraging others to utilize tax-advantaged vehicles as much as possible to leverage the free money, compound interest and time in market.”
Bari described the “elevator pitch” she gives to those who come to her for help, starting by having her co-worker outline his or her financial goal. She then emphasizes solidifying “the 401(k) piece first, as this is the only tax-advantaged vehicle available to you that actually gives you free money! For every dollar you put in, we’re getting a bonus of $0.25. That may not sound like much, but when you extrapolate it across all the contributions and years you work here, it could add up to hundreds of thousands of dollars toward your financial goals in retirement.”
Steven Dibble, a teacher at Stratford School (San Jose, California), makes a point to mention a 401(k)’s importance to those workers who are younger and less familiar with the benefits of 401(k)s. He said: “If I were to advise co-workers about contributing to our 401(k), which I have done, I always tell them it is a must. At the minimum, you must contribute the percentage that our employer matches, which is 6 percent. But that’s just a start! I tell them that once they see how little it actually affects their paycheck, they are going to want to do more and more. … I’ve been told by the younger teachers that they can’t afford to contribute, and I always reply that they can’t NOT afford to!”
401(k) Champions® Benefit Employers
Sheri Granholm, senior vice president of consulting and engagement at Movéo, explained why 401(k) Champions® help employers get the important message across: “It is important to have an advocate who can serve as an important internal resource for other team members to demonstrate the beneficial steps you can take early in your career to meet long-term financial retirement goals.” That’s a function these role models play.
Becoming A 401(k) Champion®
You might ask how these three individuals came to my attention. They applied for the 2020 401(k) Champion® Award that I sponsor with my firm, Jackson, Grant. It is the only competition that recognizes participants. For more on the competition and how employers can help the financial literacy cause, go here.
For more information on how to help encourage saving for retirement, read “How To Help Young Workers Become Retirement Savers.”
While health and safety are decidedly and rightfully center-stage today, financial wherewithal also has a place in our lives.
To read Julie Jason's books, go to https://juliejason.com/books/julies-books.