Should managers talk to their teams about savings and retirement planning?
I get questions around savings and retirement occasionally from my team because savings, 401Ks, insurance, buying a home, etc, tie in with our jobs and compensation. How to handle these questions speaks to our obligation for the lives of people on our teams. It also reminds me of the concept of “first, do no harm.”
I’ve read (listened to) a number of books on how to save and invest for retirement:
- The 5 Mistakes Every Investor Makes and How to Avoid Them: Getting Investing Right by Peter Mallouk
- Unshakeable: Your Financial Freedom Playbook by Tony Robbins
- The Intelligent Investor: A Book of Practical Counsel by Benjamin Graham
- Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence by Vicki Robin
- Rich Dad Poor Dad: What The Rich Teach Their Kids About Money — That The Poor And Middle Class Do Not! by Robert T. Kiyosaki
- The Richest Man in Babylon by George S. Clason
- Think and Grow Rich by Napoleon Hill
- The Art of Exceptional Living by Jim Rohn
These books show that most people (including myself) make lots of painful mistakes in their savings and investments:
- Lack of a specific retirement goal to work backwards from
- Waiting too long to save
- High fees
- Bad, dishonest, or conflicted financial advisors
- Active trading
- Trying to time the market
- Putting your savings in cash
- Selling low and buying high (e.g., the market goes way down, you get scared, you shift your savings in cash instead of stocks, you miss out as the market shoots back up)
So many people make these mistakes, robbing them of a more comfortable retirement. The question I wrestle with is: Should I tell my team what I learned so they don’t make the same mistakes? What if they ask directly about savings or retirement?
As a manager, you have so much influence on your direct reports’ work and even their lives. You want the best for them, often very deeply.
My conclusion: Avoid advising your team about money. Even though I read some books, I’m not an expert in wealth management. I’m not a certified financial planner or an estate lawyer. Nether are you. It’s easy to give good-sounding advice that puts people on the wrong track and sets them back a lot money. First, do no harm.
Should you recommend books? That can be okay, as long as you provide a broad selection of books (as shared above) to offer a diversity of perspectives that can hopefully overcome your own bias.
Should you even recommend saving for retirement in the abstract? That’s probably okay, especially if it sparks curiosity and learning for your team members. But make sure you don’t start advising on how to do it.
What do you think? How should you talk with your team about retirement planning?
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