Encouraging young adult children to save for retirement

[ElainePDX]

I have been fighting an uphill battle with my 20something son, who is among the lucky few of his cohort who actually has a good job and does not have college loans. He is a saver, but claims he is "too busy" to regularly deposit $$ into his Roth IRA. Despite nudging, nagging, suggesting he set up autopay to the IRA, sending him articles on the magic of compounding and referring him to posts by Matt and links TTB tweets, I simply could not get him to take any action. In fact, I am embarrassed to admit that he made no contributions in 2013, for no other reason than he believes he is too busy. He is busy all right - but no one is that busy! I can write checks on his checking account, but will not move his money without his requesting me to do so. It is his money, and I am joint on the account simply in case of an emergency.

I am here to share what worked, and it was an idea @Maria Sangria gave me at the CharlotteDO. So if you also have a reluctant 20something who can afford to feed an IRA, here's what finally worked:

My standard answer when asked where my son lives - he travels 100% time for his job - is to say that "his stuff lives with me." Maria heard me say this and suggested that I inform him that effective immediately, I will be charging him monthly "storage fees." I can then put the money from the so-called storage fees into his Roth IRA.

I loved the idea. So I told him that either he gives me permission to move money monthly from his checking account to his IRA in place of "storage fees" - or I will move his stuff into storage and he will pay real storage fees!

Maria, that really got his attention, and loathe to even consider the prospect of whether I'd really do it (probably not ) I am posting now because he quickly gave me the go ahead. I just sent the first IRA deposit. Thank you so much for this great idea!

Now I need to work on getting him to invest some of the money that just sits in his checking account. But I am thrilled to have come this far! We are making progress!

So, one more great result from the Charlotte DO. Thanks @Matt and thanks again, Maria!

 

[Matt]

Great idea! I hope my mum doesn't read this though...

I have found that when there is resistance to something like this it is often not directly tied to being too busy so much as there being too much unclear information about the subject. One could argue for days about whether to pay into a ROTH or a Traditional IRA, or not at all, and in the end the 'Fear of Being Wrong' overwhelms and procrastination occurs.

For this reason I now advise everyone like this to pay into a Traditional IRA (salary permitting) just to keep it simple. That annoys some people who want to be 'perfect' but perfect means that you are overwhelmed and don't do anything at all.

Not saying pushing for the Roth is bad at all, just saying as a broad stroke from my blog perspective. For an individual situation like yours then locking in on the Roth is absolutely fine also.