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Retirement Planning > Social Security

Herb Brooks and the miracle of the 401(k)

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1980 was a magical year, and not just because of the U.S. Hockey Team’s unbelievable win in the Lake Placid Olympics. As explained by Mark Iwry, senior advisor for the Treasury Department, it was also the beginning of the 401(k), a beginning the IRS had no small hand in (see, “Exclusive Interview: Treasury Senior Advisor Mark Iwry Explains the Early History of the 401(k) and Where We Might be Heading,”, February 19, 2014). But this story begins a few months earlier.

A funny thing happened on the way to crew practice at the onset of sophomore year – I got lost. I walked up the worn steps of Lindsey-Chit only to find an empty room. I reached into the deep pockets of my green wind jacket for the note with the meeting info. My fingers found nothing but pieces of lint which promptly disintegrated at the touch. I hustled back to my dorm room and interrupted a tense meeting between the hockey team’s current captain, its future captain and at least two others. The room went silent as I opened the door to several pairs of angry eyes.

“Say,” the captain broke the silence, “would you like to be manager of the hockey team?”

With visions of medical tape and “gopher” duties dancing in my head, I graciously declined.

Sensing the reason for my reluctance, the captain immediately shot back, “It’s not what you think. You’ll be in charge of a six figure budget and responsible for team logistics.” And then came the offer that closed the deal. “We’ll even fly you to Buffalo for free.”

The fact the team had a game in Buffalo didn’t matter. What mattered was I would be able to show off my home town and visit my family. Of course, little known to me, who we were scheduled to play would mean a brush with history I’d never anticipated.

You see, the team we played was the U.S. Olympic team. That’s right, the same team that went on to beat the Russians and win the gold in what many view as the turning point of the cold war. At the time, playing this team didn’t even register on the “things that matter” scale. But, for what it’s worth, here’s what I remember. I tend to be a wall flower at parties, and the pre-game reception proved no different than every other social event I’ve attended. Only this time it really made sense.

I was new to the team and more of the players from our team had known the Olympic players longer than they had known me. Sure, I meandered through my peers, impressed by their enduring friendship and their pointed complaints about the “robotic” Herb Brooks. I couldn’t believe they were dissing their coach like that. Our coach, in contrast, was more of a teacher than a taskmaster. I listened and moved on, next winding my way through a sea of business suits and blue blazers (i.e., the alumni). I had nothing to say there so I kept walking, eventually ending up back against the wall staring blankly into the room before me.

It wasn’t long before I noticed someone else was helping me hold up the wall. He was also staring blankly into the room. Thinking he was another alumnus and knowing I had a duty to speak to them and hoping to appear friendly (and local), I introduced myself. “Hi! I’m Chris Carosa, manager. What town are you from? What do you do?”

The gentleman paused, as if I had disturbed some profound thought. He blinked and looked at me. “Oh, I’m not from around here. I’m Herb Brooks. I coach the other team.”

And then we both nestled our backs against the wall and stared blankly into the room, relieved we had both exercised our necessary social duties.

I’m reminded of this because of the Winter Olympics. Inspired by the televised events, my son convinced his parents to watch two movies – “Blades of Glory” and “Miracle on Ice.” It is of course the latter which I write about today. You see, as the introductory story no doubt reveals, I am of the generation that became that Miracle. Many feel those boys represented the whole of America (and they did), but they especially represented us late baby boomers. Indeed, if you look at the epilogue of the movie, you’ll find that most of them found employment in the financial services industry, mostly as entrepreneurs and in a capital generation function, all with much less fanfare than they saw on the ice.

This is where the most of my generation appears to have landed. We’re the tail end of the baby boomers. We haven’t produced a president (Clinton and  Bush were early baby boomers and Obama came along after the fact). We can’t count a Bill Gates, Steve Jobs or even a Mark Zuckerburg among us. But, as you’d expect of those born of the Reagan Revolution, we have borne the brunt of that economic prosperity. Sure, you’ll see us on CNBC (some even regularly), but true superstar celebrity status has not been on our bucket list.

On the other hand, success in the face of depravity is on that list. It has been our mantra. Ever since a ragtag group of 20 Davids beat the Red Army Goliath on that cold ice some 34 years ago. The wonderful thing about “Miracle on Ice” is just how well it captures the despair in America during that era. It seemed like our country was past its prime. One of the polls mentioned in the movie said, and I paraphrase: By the end of the 1970s, for the first time ever, parents thought their kids would have it worse than they did – and many of them lived through the Depression!

What Herb Brooks was able to extract from those young men wasn’t a sense of the invincible, but the can-do sense of the possible. There’s a subtle difference. It’s the difference between a loser and a winner. Those under the false aura of invincibility will crack and break down at the first sign of failure. Those with the can-do sense of the possible will view failure as merely a necessary step if not an outright inspiration.

The year 1980 brought a lot of bad things: record unemployment; record inflation; record high interest rates; the Iran hostage crisis; Soviet expansionism; and, in general, malaise. But others might have seen that same era as a glass half-full, with the advent of personal computer technology about to change life as we know it – and the beginning of something that would be destined to change retirement as we know it – the 401(k) plan.

It’s not an invincible panacea, but for those with can-do discipline, it’s a proven winner. 


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