Joined up Thinking??

I braved the cold and windy weather last night for a walk, heading back to my vacation home. I was magically drawn into the local hotel by the thought of a crackling turf fire and a nice pint of Guinness to warm my wind-chilled bones. It was an excellent choice. I got to listen in on a conversation a group of twenty-somethings were having at the cubby beside mine.

I enjoy eavesdropping but normally don’t get the chance. My wife, Suzie, expects me to concentrate on our conversation. Being on my own this evening, I was all ears when I caught one of the guys explaining he’d worked a deal with his new employer for higher pay rather than a contribution to his retirement account. I didn’t even realise this was possible, but being a former employer myself, I could imagine a few ways to do it. It would certainly be beneficial for a questionable employer.

The couple benefiting from the extra cash were explaining what they planned for the windfall—a two week Eastern Mediterranean cruise this coming summer. The itinerary sounded great. Very nice, I thought to myself. The other couple were expressing the wish that their respective employers would do the same but knew it wasn’t a possibility. I was very grateful to hear that. I nearly expressed this opinion but caught myself.

The young couples finished up and headed into the night while I ruminated on the conversation, sitting alone sipping my pint. I can see the appeal—extra cash is always welcome, particularly when you’re young. But I couldn’t help thinking of the downsides. Even if I discard the ethical questions about the employer, the thinking doesn’t seem that joined up to me. Missing out on the employer contribution, plus the fact that in the UK for every $100 pension contribution the government adds a further $25 or $40 depending on your tax rate… it’s certainly going to be a more expensive cruise than they ever dreamed of.

I gathered myself to leave. Glancing at the booth where my young couples had been sitting, I thought through the cost of the cruise. If I take the employer match and the tax contribution from the UK tax authorities and extend it over maybe thirty years, I wouldn’t be surprised if it’s at least $50,000 per person. Let’s hope it’s a splendidly wonderful adventure for them.