Laziness is my vice and I put it to good use!

If I were to meet my 20-something year old self, I would probably punch him in the face! Among other questionable activities, for not signing up for a 401k, for not opening a stock trading account in a ROTH and for not indexing. These are regrets I will carry for a long, long time.

To make up for these mistakes, I max out my ROTH and my spousal IRAs and contribute to my 401K. And I only wish I had more investment space in my ROTH. If the ROTH limit were to be increased, I would most definitely max that out! (I did make use of the paltry $500 ROTH increase this year.)

But here’s the twist. I don’t max out my 401K. Not because I can’t, because I don’t want to. The funds are terrible and the fees outrageous. I pay 5 times the fees for an S&P 500 index fund in my 401K, when compared to its Vanguard equivalent ETF in an IRA!

I know I’m shooting myself in the foot here. Even though the fees are bad, I probably should contribute as much as I can in my 401K to make up for the lost years.

But something happened. There was a chance that I may have to switch jobs. Which meant a 401K to IRA rollover, which meant freedom to invest in any fund I want without being forced to pay outrageous fees! I didn’t want to miss this golden opportunity to stuff more money into my IRA, so I temporarily increased my contribution from 4% to 14%!

The plan was to keep contributing 14% till I move out, rollover my 401K to my traditional IRA and reset my contribution rate back to 4% in my new job.

But then, I decided not to switch jobs after all! And so you would think I would’ve reset my 401K back to 4%. It takes only a few clicks to reset the contribution rates and I know I can do it any time I want, but I still haven’t.

And knowing me, I probably never will. I’m just too lazy! Laziness is my vice and I put it to good use!

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35 thoughts on “Laziness is my vice and I put it to good use!

  1. I agree with you on this regret of not saving and investing more when I was in my 20s.

  2. Laziness can definitely be a virtue. Another place it shows up is in the data showing most people never change their initial contribution allocation. As long as the initial allocation is a good one and the market trends higher laziness is great!

  3. Nice! Sometimes laziness does pay off. I take “effort” (more in terms of time than physical or mental efforts…) into account with my investment choices too.

  4. Ha! I wish I could say the same. LOL. Laziness has almost always costs me more money.

  5. Haha usually I don’t benefit from my laziness, but it’s nice that you have in this case! I also do not like the options I have in my 401k and recently decreased the contribution amount from 10% to 6%, which is the maximum my company matches. I’m excited to set up an IRA this year, but I’m pretty shocked at how low the maximum amount is that you can contribute in a year. Then again, there are many government regulations that do not make sense.

  6. Laziness can be a virtue when investing. Most of the time “doing nothing” can be the best investment move we make!

  7. I’m glad that I started investing early but I’ve been lazy in increasing my contributions to my IRA. I really need to increase it, but haven’t, worrying that I might need the money. Like you, if I increase…I most likely won’t decrease it.

  8. I’m a huge proponent of maxing out all retirement accounts. Does the fees exceed 1% which isn’t too bad. I’m glad you’re at 14%, does that hit $17,500?

  9. I also wish that I saved/invested more in my 20′s. I cry when I think of all of the money I wasted.

  10. Back at it, are we? Nice to see you back also. Don’t be too harsh on your 20-year-old self. Mine was an idiot too.

  11. Too bad your 401(k) fees are so high. Still, as you noted, it’s probably better to just fill it up anyway, and stick to the lowest cost funds that are available. (Which it sounds like you are doing.)

  12. I have a similar problem regarding fees in a plan and was just thinking about this last night. We max out our 401k contributions in my plan (there are vanguard funds I can invest in there) but my husbands account has terrible fund choices with high fees. But I was wondering if we should be maxing that out too to get the tax benefit now while we are in a pretty high bracket. Haven’t done the math, but wondering if the tax savings would offset the fees.

    • Explore other avenues like like Roth, Traditional and HSAs etc. If you got those covered and still have money to spare, definitely increase your husband’s 401K! No matter what the math is, you can never go wrong by saving more!

  13. I can be lazy sometimes too, and it usually doesn’t serve me well but sometimes it is helpful.

  14. I’m lazy by keeping my investments in index funds. The good news is, they’ve been performing incredibly well.

  15. It’s awesome that you’re able to put laziness to good use! Like most others, I usually find my laziness takes money out of my pocket, so I’m always making sure I’m not being lazy when it comes to finances.

  16. I finally switched my 401k contributions from a percentage to a dollar amount. I was missing out on company match at the end of the year by having it as a percentage so now I don’t have to worry about that anymore.

  17. My solo 401k is with Vanguard now and I don’t have to worry about paying too much. Hopefully, I can continue to max out for many years to come.

  18. I’m not sure excited about the 401(k) at my new employer, but we’re required to put in at least 2% (with no match, currently). My last 401(k) was really pretty good, although I now have no idea what to do with it since I’m not at that company anymore.

    Maybe if I just leave it alone and do nothing, let my laziness work for me, it’ll work itself out? ;o) At least you give me hope that may be the case.

  19. I like your beginning and punching yourself if you were to meet your 20 self. I would do the exact same thing. Boy so many stupid things I have ever done would deserve more than just a punch.

    I do the same of not maxing 401k. Partially it is because of I do not have spare cash to do that, partially it is because I also do not like the investment choices we have. So I am going to max ROTH and my taxable accounts. If you do not sell, there will be no tax liability anyway (except dividends).

  20. Wow you lucked out, especially with how the market performed in 2013! Doing nothing sometimes is the best move. A friend of mine was jumping in and out of stocks. He lost his shirt. He looked back and if he didn’t touch his portfolio from a few years ago, he would have doubled up instead. Doh!

  21. Interestingly, I’d been focussed on driving my taxable accounts higher rather than focussing on my maxxing my 401k, which is probably where my priorities should have been in hindsight. No matter, I’m trying to max it out now!

    It’s a bummer that your 401k fees are so high. That’s a significant amount of leakage in fees, which is a big loss over time. Mine are less than 0.2%, which I’ve never fully appreciated

  22. That’s good point. You will not only lose the investment potential from 401K but also the free money from your company. If you contribute toward your 401K your emloyeer will contribute as well.

  23. If I want to retire at 50, where do I invest my money? IRAs and 401K’s penalize you for retiring early. Do I just invest in the market and sell shares for income?

  24. If the plan is bad why not complain to your boss and HR. They are in the same boat as you and they may not be aware that the plan’s investments stink. Show them how they stink. The plan’s investment choices can be changed by the plan administer and it is done all the time. This is a vital issue to the whole company so your well reasoned arguments and information may be a game changer for everyone.

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