The 403(b) Monk and What We Can Learn from Him
I recently Tweeted about a fascinating New York Times article on Doug
Lynam, a Benedictine monk who left the monastery to become—wait for it—a 403(b) advisor! And others apparently share my fascination with this story, as this has become my most popular Tweet in my brief Twitter career.
While there are many life lessons that can be taken from the article (and I strongly encourage you to read this gem of a piece in its entirety), this edition of Top of Mind will focus on the ones that are applicable to the plan sponsor community.
- Many people have financial problems that prevent them from even thinking about saving for retirement. — Every person who arrived at Mr. Lynam’s monastery seeking spiritual guidance had a financial problem of some sort. Plan sponsors are increasingly recognizing this and increasing employee education on budgeting, student loans and credit card debt. However, with so many people having apparently dug themselves into financial holes, there is clearly more that needs to be done.
- Teachers have a rough time accumulating wealth in their 403(b) plans, but it doesn’t have to be that way. — Mr. Lynam shares the far too common story of a teacher who, at retirement, had accumulated a meager $16,000 in her 403(b) plan. Stories like these are due in part to K-12 plans that are stuck in the 90's, with high fees, poor investment performance, and a lack of the type of participant engagement that would result in better participant outcomes. Now many people, including K-12 plan sponsors, throw up their hands at the problem. But Mr. Lynam, who was a teacher as well as a monk, decided to do something about it, which ultimately led him to become a 403(b) advisor. Thanks to people like Mr. Lynam there are an increasing number of teachers who are no longer bound to inferior retirement vehicles, and that is a good thing.
- It can be tough to help those who do not wish to be helped. — According to Mr. Lynam, one of his biggest challenges are participants who do not want to do the hard work of facing their financial mistakes, admitting their lack of knowledge, or taking responsibility for their actions. This is why it is so important for participant engagement strategies to be proactive, steering people towards the proper retirement plan and other financial decisions, in spite of themselves.
Thanks to Mr. Lieber of the New York Times for bringing us this story of a monk who found his true calling in an unlikely place. And I hope that you find, or have found, your true calling as well
Note: This feature is to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.
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