Morgan Freeman and the Retirement Plan Redemption

Morgan Freeman and the Retirement Plan Redemption

Surely you have seen The Shawshank Redemption?  If not, stop reading and go watch it.  Right now.

It is tied for number one on my list of all-time favorites, right beside Jaws and The Silence of the Lambs (Fava beans, anyone??).

In the movie, Morgan Freeman plays Red, a longtime resident of Shawshank prison.  He befriends Andy (Tim Robbins), and Andy eventually escapes from the prison.  Andy chips away at a prison wall for years, little by little, and eventually breaks through.  Narrating the scene, Red says, “That’s all it takes, really.  Pressure…and time.”

I was watching it recently for about the 2,000th time, heard that line and realized Red had just summed up the keys for a successful retirement plan better than anyone… ever.

Pressure = How much money you can save.  Remember, rate of savings is as important (if not more so) than rate of return.  Apply as much “pressure” as possible.

Time = Apply that “pressure” for as long as possible.  The longer the better, but if you only have a few years then take full advantage of those years. You’ll never be sorry you saved money.

Retirement plan participants hear a lot of “noise” about investing.  It can be intimidating and confusing, and can ultimately turn a lot of people off.  Don’t make investing overly complicated, and don’t let it stop you from saving.  Pick quality, low cost funds that match your risk tolerance and time horizon, and then apply as much pressure as you can for as long as possible.

Eventually you’ll break through your “wall” and find freedom… in the form of the retirement you both want and deserve.

Like Red said, it’s really just about pressure and time.