It’s not a small world, after all. According to New York Times writer Thomas L. Friedman, “It’s a 401(k) World.”
What’s he mean by that? In the hyperconnected, post-Sept. 11 land of the free, we define our own contributions in every way. These include our contributions to our careers in the form of job training and our contributions to our future in the form of our retirement plans — the ubiquitous 401(k).
“If you are self-motivated, wow, this world is tailored for you,” Friedman writes. “The boundaries are all gone. But if you’re not self-motivated, this world will be a challenge because the walls, ceilings and floors that protected people are also disappearing. That is what I mean when I say ‘it is a 401(k) world’. Government will do less for you. Companies will do less for you. Unions can do less for you. There will be fewer limits, but also fewer guarantees. Your specific contribution will define your specific benefits much more.”
The column notes: “ ‘Just as having a 401(k) defined contribution plan requires you to learn more about investing in your retirement, a 401(k) world requires you to learn much more about investing in yourself: how do I build my own competencies to be attractive to employers and flourish in this world,’ said Byron Auguste, a director at McKinsey and one of the founders of Hope Street Group, which develops policies to help Americans navigate this changing economy.”
In a world without pensions how you set up a flourishing defined-contribution plan is up to you, baby.
But if saving your money is your responsibility and if educating yourself about how to do it is also your task, that doesn’t mean you can’t get some pointers along the way.
You can, for example, learn more about how to manage your 401(k) by signing up for the last of BetterInvesting’s free, four-part webinar series on mutual fund investing.
The sessions are held on Thursdays from 8:30 to 9:30 p.m., EDT.
Exchange Traded Funds (ETFs) — The Hottest New Investment: May 2
Allen Holdsworth, president of the BetterInvesting Volunteer Advisory Board and a retired broker/financial planner, introduces you to the world of exchange-traded funds (ETFs). Allen will describe what ETFs are, how they work and how they can be used by individuals as well as investment clubs. You’ll learn about the different types of ETFs and the pros and cons of these investments.
Bond Funds in Your Retirement Accounts: May 9
Christi Powell, a director of the Heart of Oklahoma Chapter and Certified Financial Planner, will show you how to evaluate bond funds and use them in your retirement accounts. What’s available in mutual funds, closed-end funds and exchange-traded funds to use? What are the risks of bond funds and how should you deal with them? How do they fit in your overall cash flow and financial planning?
BetterInvesting is a national nonprofit organization that has been empowering individual investors since 1951. Founded in Detroit, the association (formerly known as National Association of Investors Corporation) was borne out of the conviction that anyone can become a successful long-term investor by following commonsense investing practices. BetterInvesting has helped more than 5 million people become better, more informed investors by providing webinars, in-person events, easy-to-use online tools for analyzing stocks and mutual funds, a monthly magazine and a community of volunteers and like-minded investors. For more information about BetterInvesting, visit its website at www.betterinvesting.org or call toll free (877) 275-6242.