Three weeks ago I got an email from Jeff Rose at Good Financial Cents. He was speaking to around 50 seniors at his college alma mater about personal finance, and when he polled the crowd to see if they had heard of Roth IRAs, not a single person raised his/her hand. Rose had done talks like this in the past, but always a few people raised their hands.
This shocked Rose. If it were me, I would have chalked it up to a few factors…
- I’ve found that people generally don’t like to call attention to themselves in a crowded audience.
- I could see a scenario where a few people had heard of Roth IRAs, but didn’t raise their hands because they feared they would be called on to put their knowledge to a test.
- I thought back to when I was in college. The people with jobs had them because they needed the money (let’s make “need” very flexible in this case to include funding beer and Ramen Noodle budgets). The people without jobs were mostly focused on their studies (or getting the most out of their beer budget). In short, given the audience, most of whom either have no income to be Roth IRA eligible or no money to contribute to one. It is natural for people to dismiss something that wouldn’t be applicable to them.
- These people are likely close to 50 years away from retirement. (Can I presume that retirement age for a 22 year old, given the state of Social Security, might be close to 72?) I can forgive for them not thinking that far ahead.
However, it wasn’t me giving the talk and Jeff rose is anything but Lazy. He decided to do something about it. With that he created a movement to spread the word about Roth IRAs. With that movement he has convinced a bazillion personal finance bloggers (though realistically closer to 150) to write about Roth IRAs today.
I’m always one to join a movement and I agreed. I just have a couple of little problems, that I didn’t think through. I tend to think my audience knows about Roth IRAs because I mention them from time to time. Raising awareness about Roth IRAs on a personal finance blog is like explaining how tagging up works in baseball to someone who has held season tickets for a dozen years. It’s preaching to the choir. What we really need is someone like Wes Welker who can reach an entire audience of people not familiar with Roth IRAs.
The other problem that I have is that Roth IRAs are boring. I’m one of the world’s biggest math dork/nerds and I find them boring. With that out of the way, let’s make this pretty quick and move on to more interesting topics. Roth IRAs are a great place to save for your retirement because investment gains are not taxed. It isn’t often that Uncle Sam gives us a way to make money without pay him his fair share. Take advantage of it.
Oh and those 401k things… in general they are pretty cool too.