Let’s face it, we are likely never going back to employer sponsored pensions or a government sponsored plan. The best we can probably hope for is a better use of the system already in place. As the father of 2 recent college grads, I appreciate plan sponsors who default a contribution rate for new employees that will maximize the employee match and then default those contributions into a target date fund appropriate for their ages. I worry that a lot of people are not aware of the benefits of saving early for retirement and will fail to voluntarily take advantage of their employer plans simply because they are not properly informed. I wish there were more controls in place around early withdrawals of 401k balances, especially when young people change jobs. Far too often they take the payout and get a check larger than they have ever seen before, despite the penalties. I know we can’t control what people do with their money, but we can make it harder for them to make mistakes that will impact them (and society as a whole) down the road. Maybe a mandatory counseling session to discuss how the money is going to be used would discourage young adults from making bad choices.
Thanks Adam. Another thought provoking article to kick off the weekend. I tend to agree that simply blaming index or passive investing for the current level of stock valuations is an oversimplication. For starters, there are many more indices than just the S&P 500, including the Russell 2000 which is also quite popular. Is it possible that we simply have more dollars chasing fewer stocks? I think it is safe to say that many more households are investing in equities today than ever before. It is also true that we have less publicly traded equities. Simple economics suggest that demand is greater than supply causing prices to go up. Another factor is that many of those dollars flowing in are set to autopilot and thereby ignore the level of valuations. Target date funds and advisor allocation models simply take incoming funds and allocate them according to a set formula. Personally I think the combination of more dollars set to automatically invest in some combination of fewer stocks requires us to question whether a historic 16 p/e is still the right metric.
Thank you Mike! That’s very encouraging. I am not proud to admit this but my job/career very much consumed me over the past 35+ years. Sadly my chosen career (and long commute) almost demanded it. But I have time to figure out how to replace that sense of purpose and am hopeful knowing that it can, and does, happen!
This is a very timely and informative article for me and as always, I read and appreciate all of the comments. It is comforting to know that I am not alone in fearing the loss of identity and purpose that may accompany my decision to “hang them up” (hopefully in the next 3-5 years). It is equally comforting to know that with proper planning and diligence, the sense of loss can be avoided or at least managed. As a planner by nature, I have been researching ways to position myself for a smooth landing. By researching, I mean reading books and blogs as well as talking to people who have retired. The one common theme for me has been that you need to identify activities or causes that bring you joy and a sense of fulfillment and then start cultivating these passions before you retire with the same diligence as I did preparing our finances. Not easy, but certainly achievable. One last thing, for those recently retired or still looking ahead to retirement, I encourage you to explore a company called My Next Season based in Charlotte. In short, they provide coaching for individuals nearing retirement. The testimonials on the website are very powerful even if you do not engage in their well structured program.
I agree Private Equity and Private Funds are a true “buyer beware” investment choice. Like many, I “dipped my toe” a few years ago to earn some extra yield in some well known REITs and am still waiting for my withdrawal request to be fulfilled. Worse yet, the yield has declined and the investment is underwater. It will be 3+ years to extract my initial investment. My fear is that these funds will get tucked into balanced and target date funds that end investors will never know about.
I invested in Starwood’s SREIT a few years back on the recommendation of a trusted former colleague and friend. Never again. It will take me 5+ years to withdraw my investment due to the tollgates they imposed during Covid. Buyer beware!
Thank you for this timely article and related links below….pretty scary stuff when you consider the parallels with previous financial crisis in our recent past. Sadly this is yet another reminder of the short term thinking that is rewarded by financial services firms. Just think about the recognition, rewards, closing dinners and bonuses that were paid out when these loans were made. None of that money will be recovered and as a result, people will continue to be encouraged to ignore the long term implications of their actions.
Comments
Let’s face it, we are likely never going back to employer sponsored pensions or a government sponsored plan. The best we can probably hope for is a better use of the system already in place. As the father of 2 recent college grads, I appreciate plan sponsors who default a contribution rate for new employees that will maximize the employee match and then default those contributions into a target date fund appropriate for their ages. I worry that a lot of people are not aware of the benefits of saving early for retirement and will fail to voluntarily take advantage of their employer plans simply because they are not properly informed. I wish there were more controls in place around early withdrawals of 401k balances, especially when young people change jobs. Far too often they take the payout and get a check larger than they have ever seen before, despite the penalties. I know we can’t control what people do with their money, but we can make it harder for them to make mistakes that will impact them (and society as a whole) down the road. Maybe a mandatory counseling session to discuss how the money is going to be used would discourage young adults from making bad choices.
Post: How do you really feel about 401k plans?
Link to comment from January 10, 2026
Thanks Adam. Another thought provoking article to kick off the weekend. I tend to agree that simply blaming index or passive investing for the current level of stock valuations is an oversimplication. For starters, there are many more indices than just the S&P 500, including the Russell 2000 which is also quite popular. Is it possible that we simply have more dollars chasing fewer stocks? I think it is safe to say that many more households are investing in equities today than ever before. It is also true that we have less publicly traded equities. Simple economics suggest that demand is greater than supply causing prices to go up. Another factor is that many of those dollars flowing in are set to autopilot and thereby ignore the level of valuations. Target date funds and advisor allocation models simply take incoming funds and allocate them according to a set formula. Personally I think the combination of more dollars set to automatically invest in some combination of fewer stocks requires us to question whether a historic 16 p/e is still the right metric.
Post: Index Fund Bubble
Link to comment from December 6, 2025
Thank you Mike! That’s very encouraging. I am not proud to admit this but my job/career very much consumed me over the past 35+ years. Sadly my chosen career (and long commute) almost demanded it. But I have time to figure out how to replace that sense of purpose and am hopeful knowing that it can, and does, happen!
Post: Happy Hour, or The Panic Button? Why Early Retirement Anxiety Is Real.
Link to comment from December 3, 2025
I may be overthinking it, but I have seen the negative effects of not being prepared.
Post: Happy Hour, or The Panic Button? Why Early Retirement Anxiety Is Real.
Link to comment from December 1, 2025
Thanks Mark. That’s what I am working on!
Post: Happy Hour, or The Panic Button? Why Early Retirement Anxiety Is Real.
Link to comment from December 1, 2025
This is a very timely and informative article for me and as always, I read and appreciate all of the comments. It is comforting to know that I am not alone in fearing the loss of identity and purpose that may accompany my decision to “hang them up” (hopefully in the next 3-5 years). It is equally comforting to know that with proper planning and diligence, the sense of loss can be avoided or at least managed. As a planner by nature, I have been researching ways to position myself for a smooth landing. By researching, I mean reading books and blogs as well as talking to people who have retired. The one common theme for me has been that you need to identify activities or causes that bring you joy and a sense of fulfillment and then start cultivating these passions before you retire with the same diligence as I did preparing our finances. Not easy, but certainly achievable. One last thing, for those recently retired or still looking ahead to retirement, I encourage you to explore a company called My Next Season based in Charlotte. In short, they provide coaching for individuals nearing retirement. The testimonials on the website are very powerful even if you do not engage in their well structured program.
Post: Happy Hour, or The Panic Button? Why Early Retirement Anxiety Is Real.
Link to comment from November 30, 2025
I agree Private Equity and Private Funds are a true “buyer beware” investment choice. Like many, I “dipped my toe” a few years ago to earn some extra yield in some well known REITs and am still waiting for my withdrawal request to be fulfilled. Worse yet, the yield has declined and the investment is underwater. It will be 3+ years to extract my initial investment. My fear is that these funds will get tucked into balanced and target date funds that end investors will never know about.
Post: Private Equity Traps
Link to comment from November 15, 2025
I invested in Starwood’s SREIT a few years back on the recommendation of a trusted former colleague and friend. Never again. It will take me 5+ years to withdraw my investment due to the tollgates they imposed during Covid. Buyer beware!
Post: Lessons from First Brands
Link to comment from November 1, 2025
Thank you for this timely article and related links below….pretty scary stuff when you consider the parallels with previous financial crisis in our recent past. Sadly this is yet another reminder of the short term thinking that is rewarded by financial services firms. Just think about the recognition, rewards, closing dinners and bonuses that were paid out when these loans were made. None of that money will be recovered and as a result, people will continue to be encouraged to ignore the long term implications of their actions.
Post: Lessons from First Brands
Link to comment from November 1, 2025
Just curious, have you experienced any change in your spending habits post-retirement? This is one area of concern for me.
Post: What words of wisdom would you have for your younger self?
Link to comment from October 2, 2025