Faithful Saving: Retirement Accounts, Spirituality, and the Pandemic

By Art Wright

April 2, 2020

 

The stock market’s movement over the past few weeks has been dizzying. For the first few days as it fell from its peak in February, I watched in fascination as fear of the virus set in. I consider myself pretty savvy with finances, and have a strong stomach when it comes to weathering the market’s ups and downs. My wife and I have a strategy for retirement savings and stick to it. We only invest in index funds and have a long time horizon in mind as we think about our retirement savings. I am not one to try to time the market.

Still, during the second day in which stock market drops triggered an automatic shut-down (after a 7% fall), I felt panicked. A significant percentage of our portfolio had evaporated in a matter of days. I had to stop looking at our account balances daily to avoid feeling nauseous. Like most of us who have the privilege of retirement savings, I wondered, should I bail out now? Should I sell my stock investments and shift my money into cash or bonds? Gold? It has taken a lot of nerve to stay the course. I rebalanced once, when our asset allocation was out of alignment with our long-term strategy. Otherwise, my wife and I have made the decision to stay the course. It hasn’t been easy. What follows are some of the theological, financial, and practical considerations that have undergirded our decisions during this period.

The biblical story in which Joseph saves grain for seven years in Egypt (esp. Genesis 41) helps me connect my faith and values with long term investing. For years I wrestled with difficult questions: Is retirement savings just hoarding? Is it greedy to accumulate money in this way? Isn’t the stock market just “gambling” with one’s money? To what extent do I need to concern myself with the values of the for-profit corporations I am investing in? I still struggle with these questions sometimes.

In the Genesis account, Joseph foresees a famine and is able to set aside an abundance of grain in the years beforehand. When the crisis hits, Joseph is prepared, not only for his household and for Pharaoh’s; he has enough grain saved to provide for Egyptians and others alike—including his estranged family! He will even describe circumstances as a sort of divine providence that led him to provide for his family (Genesis 50:20). For those of us who are fortunate to be employed, it makes good sense to me, theologically speaking, to set aside a portion of our abundance to prepare for the future. It is good stewardship of our resources when we have enough to save and do so. Moreover, the story of Joseph should remind us that our wealth is not simply for ourselves—we should remember that those of us with the privilege of retirement savings must continue to find ways to share our abundance with others (whether in the form of charitable contributions or otherwise).

Investing is different from speculating or gambling. We should not be trying to “time the market,” whether from fear or greed. It is a fool’s game, and studies consistently bear out this claim. Our retirement strategies should be more akin to Joseph’s saving of the grain surplus. We are sticking to our long-term strategy for investing because we hope that one day, when retirement comes, we will have enough to support ourselves and our loved ones, as well as enough to be charitable.

Now we find ourselves in the midst of a global crisis that has shaken our faith in the markets and capitalism. Let us use this moment to return our focus and trust to God’s faithfulness and providence instead. However, this does not mean we should stop saving. Rather, we must remember where our true hope lies—not in the account balance of our retirement savings. Now is not a time to act out of fear or avarice, but with wisdom and trust in God’s providence, and based on principles of investing that make good theological and financial sense.

I’ve had people ask me recently if they should stop contributing to their retirement accounts (whether 401k, 403b, or otherwise). The quick answer is “probably not.” Most of us should continue to contribute to our retirement plans, as long as we have enough income to cover our living expenses. Because the markets are down, now is actually a good time to buy—the major indexes are down dozens of percentage points from their previous highs. Contributions that you make today will give you more “bang for your buck” over the long term than contributions two months ago. The main reason to consider cutting retirement contributions right now is if you find that you do not have enough income to cover your living expenses (for example, if you or your spouse loses a job). Consider having enough cash on hand to provide a buffer for the immediate future; it would be wise to have an emergency fund in a savings account that you can draw from if you lose your income. Otherwise, it is best to continue making retirement contributions—or even increase your savings!

To the extent that you can, try not to look at your account balances daily, especially if you are not planning to retire in the next five or ten years. In all likelihood, the economy and the markets will recover, and those who have several years or decades of retirement savings ahead will benefit from continuing to invest wisely. This may be helpful to keep in mind: while your account will show you a a dollar figure that represents your retirement savings, you actually own shares of companies, and you still have the same amount of shares that you had two months ago. The dollar amount simply shows you the current valuation of your investments. You have not lost anything if you don’t cash out!

Finally, let me say this: the psychology of major market drops like we have seen in recent weeks can be difficult. Periods like this bring about feelings of shame for many of us as we watch large percentages of our retirement savings appear to evaporate. Why didn’t I see this coming? Why didn’t I do something different? It’s easy to beat yourself up over the numbers. Be kind to yourself. Moreover, remember that your worth as a person is not measured by your net worth or the value of your retirement accounts. Your value as a human being is derived simply from the fact that you bear the imago Dei—the image of God. You are loved, no matter what the markets do. God is our ultimate hope, and God is calling us to continue to participate in God’s saving work in the world. It’s okay to be anxious about your retirement savings. It is a difficult season. Stay the course, trust God, and continue to look for ways to participate in God’s mission in the world.

Blessings in abundance to you all in these trying times.

 

**Please note, I am not credentialed investment advisor; nor can I predict the future. These are my personal and theological reflections on what it means to navigate the challenges of retirement savings in our present crisis. I hope they are valuable to you. However, if you are anxious about your retirement investments and need advice, please reach out to Rob Fox (President of CBF Church Benefits) or a trusted financial planner. Talking about our anxiety aloud can help us calm our nerves and chart a wise course forward.**

 

Art Wright serves as Theologian in Residence for the Cooperative Baptist Fellowship of Virginia. He lives in Richmond, VA with his wife Beth and two young children. They are riding out the pandemic at home, trying to do work and homeschooling but mostly riding bikes through the neighborhood (in a responsible and socially distant way) and binge playing board games. Art and Beth are members at Tabernacle Baptist Church in Richmond, and Art teaches online for Central Baptist Theological Seminary in Shawnee, KS.