Dude, where's my 401k?

“Say hello to my little friends”. Sounds familiar? Does your mind picture guns blazing and bullets flying? Well, I have a new arsenal of friends too, but they’re virtual. Kind of.
If you’re new to this country, you wouldn’t be chastised for thinking that my friends might be characters in the same league as C-3PO and R2D2. But, they’re the best kind of friends – they make you rich! What’s better than a generous friend? They have varied names such as 412i, 529, 403b, and top dog 401k, who you might have heard about. Call me suspicious, but maybe someone at the IRS is an RPG geek.
We’re now around the corner for the next Prez election. Among the myriad promises for Universal health care and a new pool in your back yard, I’m still not quite clear where all this money is going to come from. And the best part is, the powers that be don’t even ask nicely for your money. They take it out even BEFORE you get a hold of your paycheck! You’ve probably noticed the legal mumbo jumbo – the small print that takes out big dollars before the measly portion that you can actually call yours is given to you. They call them “withholdings”. They should call it “taxes that cost an arm and a leg”. Where the hell does all that money go anyways? And what the hell is it spent on? Better roads, less traffic, more parks, better schools? The only thing I’ve noticed are those new cameras at traffic lights, that nonchalantly take your picture as you desperately put pedal to the metal.
Do you have that suspicious nagging feeling that the rich pay less in taxes? If you’ve formed your own corporation, you get all sorts of little and big perks. But, if you’re an employee, suck your thumb. At least that might give you some comfort. There might be a way to lessen the pain, however. If your company offers any type of retirement plan, go bow down and kiss the feet of your HR admin person, even if she’s as old as your grandma. If it’s a guy, well, use your imagination. Then, ask her (or him) to explain in ‘simple English’ what your options for the plan are. Keep an ear out for the word “matching”. In HR speak, “matching” = free money for you. Unless you’re absolutely drowning in debt because of that new condo you just bought or that Lexus that parks itself, it’s a good idea to contribute to your company’s plan. Make sure you’re well diversified. That’s more HR speak that translates into “Don’t put all your eggs in one basket”.
So, the next time you’re on a date and you’re being quizzed about the economy, you can toss in comments like, “Short term economic variables have a disproportionately magnified effect on stock market prices, but I’m a disciplined long-term investor with a diversified global portfolio”. Even if you have no idea what you just said, it sure sounded cool.