Each year in August we publish a compendium of statistics about 401(k) plans administered at Vanguard. As the report covers over 3 million American participants, it often generates a lot of interest from the media, policymakers, consultants, and employers. (You’re certainly welcome to read the entire book—please do!—but for the CliffsNotes version, just take a look at the executive summary.)
I’m a list maker. I carry around various lists for different parts of my life, and add and delete as I work my way through the tasks. While much in my life has become digital, I always write these lists out on paper. No digital task lists on my Blackberry or in my e-mail system.
But in other ways, I’ve eliminated a significant amount of paper from my life. One benefit is that fewer important pieces of correspondence have to compete with the avalanche of catalogs that seem to pour into the mailbox with astounding regularity. However, there are risks.
For 35 years I’ve carried a quotation in my wallet. More precisely, I’ve moved the quotation, clipped from a now-defunct newspaper, from wallet to wallet to wallet over the decades.
The quotation is from Willa Cather’s “O Pioneers”:
“There are only two or three human stories, and they go on repeating themselves as fiercely as if they had never happened before; like the larks in this country, that have been singing the same five notes over for thousands of years.”
I recently participated in a live webcast attended by a number of Vanguard retirement plan participants. The topic was retirement investing, and questions came fast and furious. We answered as many as we could in our allotted 30 minutes.
One question we didn’t get to: What are the plusses and minuses of keeping money in a 401(k), as opposed to rolling over to an IRA? It’s unfortunate that we didn’t have time to discuss this, as it’s an important question, and the answer can vary depending on what’s going on in your life.
There’s been lots of talk since late last year about the plusses and minuses of financial engineering, including a debate (see blogs by Felix Salmon and Tyler Cowen) about the overall merits of various modern financial innovations. While it’s easy to pick on stuff like “NINJA” loans (No Income, No Job, No Assets) and various mortgage-backed securities as examples of financial innovations that we’d have been better off without, I think it would be foolish to let these mistakes convince us that we’d be better off going back to the barter system.
