Reports From the Nursery (Part Eight)

By Alexis, In Her Own Words

Ever since I became an actual, corporeal, believe-it-or-not-made-of-meat human being, I’ve often been fascinated with how much stock non-spirit folks place in the concept of “time.”

            Frankly, it’s not something that pure spirits (including angels, for sure) worry about much. For instance, in heaven, you’re never going to hear somebody say ‘Oh, I must run— I’m late for an appointment.’ The fact is, up there you’re never late (or early) for anything; you’re simply where you need to be when you need to be someplace. The formal term for this is “the Timelessness of Eternity,” but it’s probably easier to think of it as “nobody’s on the clock up here, kid.” At least, that’s how one decidedly unhurried soul defined it for me in an awkwardly slow halo-distribution line once.

            Not so down here on Earth. Everything here seems to be defined by the passage of time. Nobody ever seems to be quite where they want to be, at any given moment; nobody seems to be doing what they need to do without fretting over what they need to be doing next.

            My personal theory is that this time-business has something —heck, maybe everything — to do with eating.

            In heaven, people do eat… but nobody needs to. You might be passing by a celebration of some sort and get a whiff of fresh bread or frying fish (a favorite cuisine Up There), and the next thing you know you’re munching on the celestial version of Filet O’ Fish. Or you pass by a younger crowd, and somebody offers you a waffle-cone’s worth of manna; topped with a dash of wild honey, it’s a treat to die-and-resurrect for. I kid you not.

            But “hunger” is unknown there. You eat for the sheer joy of it, not because if you don’t, you’ll suffer pangs of stomach-twisting emptiness and agony.

            That’s in stark contrast to life as a human on Earth. I’m a living testament to this fact: my human life seems to revolve almost entirely around eating something or another. In a pinch, I’ll even consider my toes a potential snack. Moreover, the whole process of consuming nourishment is the very definition of impermanence; you can chow down on Gerber’s Gruel until you’re near bursting, and a couple of hours later you’re screaming pestilence-and-famine at your mom because the milk bottle is taking too long to warm up.

            Historically, you can see how all this might invite chaos, especially in those early days right after Adam and Eve’s eviction notice. Unless you impose some order on the hand-to-mouth frenzy of finding food and consuming it on the spot, you may never get around to, say, discovering fire.

            Hence, “time” was invented. As in “breakfast time,” “lunch time,” “snack time,” “Miller time,” and so on. I guess it made an unpredictable life seem less so, or maybe it just gave early humans something to look forward to in an otherwise rather bleak existence. Whatever the case, the concept caught on; pretty soon, “time” was being applied to darned near everything.

            Suddenly, if you weren’t careful, you could be “late;” if you didn’t plan for the “future” (itself a measurement that was both pleasingly vague but ominously inevitable at the same time), you might “miss the boat” (whatever a “boat” was. This was pre-Noah, remember.)

            Fast-forward to today, and the genesis of all this time-thinking I’ve been doing. It all stems from a conversation I overheard at Sunday’s family dinner, and it all comes down to two apparently Existential Questions:

            “What is a 401(k} plan? And do I need one?”

•  •  •

Grandpa is the expert I turn to in matters of financial planning, if only because (a) it’s his lifelong profession, and (b) unlike most other people, he’s always talking to me about the topic, so I may as well listen.

            According to Grandpa, a 401(k) plan is a very popular investment vehicle for retirement planning. And he says almost everybody needs one, unless you really, really enjoy the taste of the less-expensive brands of dog food after you retire. (His words, not mine. Remember, I consider my own toes a tasty treat.)

            401(k) plans basically involve obtaining valuable tax advantages by allocating a portion of your salary to a 401(k) account. In a lot of cases, there’s an additional advantage: many employers will provide a contribution that matches your contribution, or at least some percentage thereof, to your plan.

            Estimates say that more than $6.9 trillion was held in these plans as of September 2023. More than half of the money invested in these employer-sponsored plans was set aside in mutual funds while the rest was put into other investments. Unlike an IRA, you only have a say in how much and which specific investments to contribute your money towards—not, for instance, in what specific investments are made or in what specific company holds your account.

            The tax advantages of a traditional 401(k) begin with the fact that you make contributions on a pre-tax basis. That means you can deduct your contributions in the year you make them, which lowers your taxable income for the year. In addition, in some cases, 401(k) plans offer protection from creditors, including the IRS. (As Grandpa hastened to add, “talk to your legal representation about this.”)

            There are some restrictions tied to 401(k) plans —one major restriction mandate that taxes and penalties apply on nonqualifying distributions if you withdraw funds from your 401(k) before you turn 59½; another requires such withdrawals to be taxed at your prevailing income-tax rate when you take money out.

            A couple years back Grandpa said they introduced the gold standard of 401(k) plans. Something called the Roth 401(k) plan was introduced by some politician named William V. Roth. (Go Figure). The biggest difference is whatever you contribute to the Roth plan you cannot write off on your taxes in the year you make the contribution. However, unlike the regular 401(k) plan where you pay taxes later in life when you pull the money out, with the Roth plan you never pay taxes on any of the money when you want to start spending it in retirement. Grandpa said “can you imagine putting money away tax free for 20, 30 even 50 years and paying no taxes on it? Unheard of.”

            He also said there was a huge benefit to having the Roth account over a regular 401(k) if you don’t use all the money and you pass it on to the next generation when you no longer live on this planet. To be honest I didn’t understand what he said about that so you better give him a call so he can explain it directly to you.

            Grandpa also said something about Uncle Sam (whoever that is, I have yet to meet this relative) wanting to do away with all Roth type accounts in the near future. He went on to say that “any time the government doesn’t want you doing anything usually its best to do all you can,” I really couldn’t tell if he was being serious or just joking on this one.

“But either way, a 401(k) is definitely something to look at,” Grandpa said, “especially when you look at all the uncertainties of retirement financial requirements. As time goes by, who knows what will happen to Social Security? A smart investor needs options— and a 401(k) can be a definite tool to keep the wolf from the door and food on the table.”

            I think Grandpa was going to say more… but just about then, my stomach gave a low warning growl. I may have said something slightly louder, myself.

            I was hungry again. I guess it was about the right time.

— end —

(EDITOR’S NOTE: Alexis and her musings will return to these pages in future editions. But not right now: hey, it’s dinnertime.)