She who must be obeyed (aka KT) had her life changed by a colleague at her first Division I head coaching job. He directed KT (22 years old at the time) to sign up for maximum contributions to the University’s retirement plan. KT was smart and listened to her elder. This trivial amount, at the time, has ballooned into part of her terrific foundation for her retirement.
This story inspired me to ask young people with new jobs three questions:
- Does your job provide you with a retirement plan?
- Are you contributing the maximum amount?
- What mutual funds have you chosen?
Too many young adults contribute to their retirement plan without realizing they must also choose how the money is invested. If they don’t select any funds, the money can sit in the account earning almost nothing.
Once they understand the compound interest they’re missing out on, I point them toward a low-cost Vanguard index fund.
Like KT’s colleague, each of us can be a positive ripple in the future financial success of our children.