I'm Not Much of a Gambler

A few years back I met with a financial adviser who lamented the adequacy of my retirement planning. As a result of that conversation, I promptly went back to my employer and had all my retirement contributions, which until that point were relatively minimal, upped to the maximums allowed under IRS law.

Oops. Turns out that's a pretty good plan if you live long enough to actually retire, but not such a good plan if you don't since if you don't actually retire you can't get at the money.

Now that we're in a new year, it seemed like a good time to start dealing with all the legal issues affected by my cancer diagnosis. Lacking any better place to start, I gave my employer's retirement plan folks a call to find out if I would be able to get at the money that's already there and to limit any further contributions. I learned that as long as I have my job and haven't reached the age of 63 or whatever, I can't actually get at any of the money in my two retirement accounts. Moreover, while I could technically withdraw at least a portion of the funds once I was "no longer a part of the plan" (i.e., unemployed), the taxes and penalties for pulling the money out prior to reaching the required age would be roughly 50%. 

(Dear Congress-people: You've written the laws that underlie the IRS regulations to allow for withdrawals under certain limited conditions. Perhaps a terminal illness diagnosis is another good reason to allow someone access to their retirement funds without assessing penalties? Just a thought.)

I don't really remember them telling me that at the time, but I know myself well enough to know I would've played the odds and done the same thing anyway. But given how things are turning out, I would've been much better off skipping the employer-managed retirement accounts and finding some other, personally managed and more easily accessible, place to put my money. 

But the craziest thing? 

Even though I told the financial people to reduce my 403(b) contribution to zero, I left the 401(a) as is. It just seemed wrong to not be contributing to a retirement account (and to give up the corresponding employer match), even though the likelihood that I'll ever see that money is basically zero.

I read an article today arguing that we all think we're smarter than we actually are. But at least when it comes to money, I think it's highly likely that I'm even dumber than I know myself to be.