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Jeremy Owens: Hello and welcome to On Watch by MarketWatch. I'm Jeremy Owens. As Financial Literacy Month continues, it's time to focus on one of the most important financial decisions anyone will make in their lifetime, when and how to start planning for retirement. Angela Moore is MarketWatch's retirement editor. She'll join us to discuss why people struggle to get started with retirement planning and how to break through that paralysis. Then I'm going to introduce you to one of my best friends. His name is EDGAR and he's an online database. Michelle Leder, a journalist and expert on securities and exchange commission filings, will join me to tell you how these dry boring documents can tell you an exciting story about any public company. Plus, we'll take a quick look at the news stories we are watching right now and how they'll affect your wallet. First, let's talk about retirement planning. One of the most important parts of financial fitness is planning for retirement, and an undisputed truth about retirement planning is the earlier you start doing it, the easier it is to reach your goals. But starting retirement planning can also be the hardest part. I know. I spent my twenties and early thirties avoiding any retirement savings, but then I landed at MarketWatch and met Angela Moore, our retirement editor. Angela has spoken to legions of people like me who've struggled to start saving for their sunset years, so she joined us recently to talk about the tips she's collected and dished out to get started on this important journey. Angela, you talk to a lot of people who are saving for retirement. You talk to a lot of people who aren't. What do you find is the difference between those two? Where does the paralysis begin, really, when people start to try to think about saving for retirement?

Angela Moore: There's a few things, Jeremy. One is that saving for retirement is a big long-term goal that for many people is far away, right? You're 25, you have a new job, your first job, you have maybe access to a workplace retirement plan, you know you should be saving, but people really get stuck. Also, you have a lot of expenses. So you've got your rent or your mortgage. You've got fun things you might want to do. You have student loans. Lots of competition for your money, so people feel like they don't have enough or they can't do it.

Jeremy Owens: Especially in your twenties and thirties. If you're living in a big city, New York, out here in the Bay Area. I know in my twenties and thirties, I never felt like I had enough money to start saving for retirement. I was living in one of the most expensive areas in the country as a journalist, so I obviously was not making much money. So yeah, I really didn't start until deep into my thirties, I would say.

Angela Moore: Same here, and I was on the other side of the country from you in New York. Same problem. You're thinking about rent and all this stuff, and everything is so expensive. Just going out is so expensive. And you're in your twenties. You want to go out and have fun. There's nothing wrong with that.

Jeremy Owens: I think the point here is that you can still do those things and save for retirement. It's just a matter of planning, right?

Angela Moore: Yes. And I will tell you, it's always going to feel hard to save no matter... I'm in my fifties now. I still find it hard to save, but I'm getting better at tricking myself into saving, and that's worked for me.

Jeremy Owens: Yeah. Angela, one of the ways you can trick yourself is to get that money taken out of your paycheck before you ever see it. Get that pre-tax money taken out. If it never lands in your bank account, you never saw it, you never know about it. I know that's one of your big suggestions. What are some other tips you have to help people start this journey?

Angela Moore: Well, one of the things, it's very simple. It's to wake up to your spending. Be aware of what you're spending. There's so much that goes out of our bank accounts or onto our credit cards that we don't even really think about after a while. There are memberships to things.

Jeremy Owens: Yeah. In the subscription economy. You can have so many streaming subscriptions and little $8 here, $12 there, $15 there subscriptions that you may not be using, but you've completely forgotten that you have.

Angela Moore: And you think, "Oh, that's not that much money." But you know what? Let's say it's 15 bucks, 20 bucks. One, it does add up, and two, if I find 10 bucks in my pocket, I'm so happy. It's kind of found money. Slow things down. Use cash. I don't know if anyone else besides me has checks. Write a check. Take a moment and be more mindful about your spending. But you can be mindful about your spending and that's good, but it's a two-step process. Step one is identifying this money that you're spending in a not smart way, and step two is putting that money to good use because, really, it somehow just bleeds out of my bank account no matter what, so I have to make sure I send it to the right place. So you need to make sure that you are having it automatically transferred either to a high yield savings account or to an investment account.

Jeremy Owens: When should you really start this? I mean, that's the thing that a lot of people really struggle with is especially in the twenties and early thirties, it just feels too early to start saving for retirement when there really is no too early to start saving for retirement.

Angela Moore: There isn't. And everyone I talk to says to start early, and young people, their youth is going to save them because people who are further along, they have to save so much more in a shorter period of time. Young people, they start early, they put away just a little bit. That little bit really grows.

Jeremy Owens: Yeah, it compounds. The earlier you put it in, the more it comes to, and that's why putting $10, $15, $20 away early is actually better than putting $50 away late.

Angela Moore: Yes. And one of the problems is that people feel like they don't have any money to save. The other problem is that people are afraid of doing the wrong thing with their money because, I don't know if you've noticed, but there's a lot of noise out there, a lot of investment advice, a lot of financial advice, a lot of, "Oh, the market's this, the market's that. This is a buying opportunity." Everyone is worried about doing the wrong thing. Even when it comes down to buying a CD, which is one of the most plain vanilla investments you can buy, "Oh, it's only 4.5%. What if I can get 4.53% over here?" It's this paralysis from having too much information. When it comes to investing, when you're young in particular, we really hear a lot about people doing diversified, low cost ETFs or funds. That's really the best way to go about it. Just to continually put money in, dollar cost averaging a small set amount over a long period of time. You're always buying into the market, and you're not worried about timing the market, which again is something that really makes people freeze up. "Oh no, the market is up. I shouldn't buy now. I should wait until it goes down." "Oh, the market's down. The world is ending. I shouldn't buy now." It's not good.

Jeremy Owens: The way I tend to think about that, Angela, is the difference between investing and saving. If you're investing, you're looking for that quick return. If you're buying index funds hoping they'll go up in a year, but what we're talking about with retirement saving is investing over the long term. Dollar cost averaging purchase of these index funds over long term and holding them for a long term. And that's different. Investing and saving are different in that manner.

Angela Moore: That's the thing. These index funds, while they seem very unsexy, they actually are going to be super sexy when you're 80 years old and you have a ton of money because they will just grow slow and steady over a long period of time, better than just a plain savings account, even a high yield one. And it will grow, and you won't be so worried about the ups and downs of the market because you have this long-term view.

Jeremy Owens: Right, exactly. A bad year gets evened out by a good year. If you are in these index funds in 2022, you probably didn't want to look at your statement, but once you got to the end of '23, you're like, "Oh, this is great. I love seeing this."

Angela Moore: I'm a genius.

Jeremy Owens: Right. Yeah. I was beautiful. I was wonderful to do this. What other kind of tricks do you offer people to get past the paralysis, get some money into savings that you're not going to touch for a long time?

Angela Moore: Well, sometimes there are things right in front of you that you don't see. Look at what's happening at work. Thankfully, now people are automatically enrolled into their 401(k)s when they start a job, so that's really good.

Jeremy Owens: Yeah, the opt in versus opt out. That's kind of changed in recent years, right?

Angela Moore: Yes. That's part of Secure 2.0 and it's a really good thing because people are automatically enrolled, so that takes away another barrier to people saving for retirement. But companies start people at a low investment level. I want to say 3%. I'm not exactly sure. I think it varies.

Jeremy Owens: Yeah, that starting percentage of how much you dedicate to your 401(k) can change based on the employer, but there is advice that can translate across all of that, which is you can add a half a percent or a percent per year, continue to increase the percentage you allocate to your 401k. And you can even start higher. Just because that is the level where you're suggested to start mean you have to start right there.

Angela Moore: Exactly. I would even say if they put you in at three, do more. Three is not going to be enough. So it's good that you're in, but put in more. And again, just add a percent. You won't even feel it, but your 401(k) will feel it. Also, make sure you're getting the match. That's where your company will match a percentage of what you put in. And a lot of companies, actually, I don't know, it really varies, but 5%, 6%. That is free money that your company is giving you, so definitely make sure that you take it. Again, this money is taken immediately from your paycheck. You never see it. You will see it in many, many years, but you don't see it, so you won't really feel it coming out.

Jeremy Owens: Yeah. And if you're trying to decide what that level should be, always figure out what the match is and get the max of the match.

Angela Moore: Yes.

Jeremy Owens: Right? If they want to put you in a 3%, but they match up to five and a half or 6%, push that up to 6% and keep it there. That's where you're getting the most on your money. One of the things that's really getting in the way there is the large goal. People when they hear retirement planning, all of a sudden they're hearing, "You need a million dollars, you need $1.5 million, you need $2 million to be able to retire comfortably." How can you take that and make it a goal but not make it so daunting?

Angela Moore: Well, one of the things I heard when I was researching this topic is a person recommended making a vision board. You cut out stuff from magazines, you put it on a poster board. It's an old school collage, really, but what it does is it helps you envision your future self. Part of the problem of saving for retirement is that we are very focused on the present. We don't think about our future selves. So by thinking, "Oh, I might like to live in Mexico." "Oh, I think I'd like to have a house in Aspen." "Oh, I'd like to go hang gliding." I've got big dreams, Jeremy. But all these things, you're thinking about your future self and you're like, "Oh yeah, I want to do all these things. I need to put money away for that." Again, just a little bit, but you can imagine 65-year-old you and all the amazing traveling she's going to want to do. That's what I do, too. I haven't made my vision board yet, but I do try to think of my future self and think about just the awesome life I want to have. I don't want to be like, "Oh, good thing I had all those streaming services I could watch when I was younger and now I have no money." Retirement can be decades long, and it's decades that you're not earning money. So it is important to put money away for that.

Jeremy Owens: Yeah, and there's delayed gratification there, right? We talked about wanting to travel now as being a reason that people don't save for retirement, but that's how you're going to have money to travel later, and that's the kind of thing you have to be thinking about at every stage of your life to be able to have that good end of life.

Angela Moore: Exactly.

Jeremy Owens: And Angela leads our retirement team that is constantly writing and thinking and talking about this, so follow their coverage and we'll have Angie back on and talk again. Thank you so much for joining us, Angela.

Angela Moore: Oh, it was my pleasure. Thank you.

Jeremy Owens: We're going to take a quick break. Coming up, my friend EDGAR. Stay with us. Welcome back to On Watch by MarketWatch. Before the break, we talked with Angela Moore about retirement planning. Now we turn to SEC documents. If you want to dive into any public company in America, I have a suggestion. Run straight to EDGAR. EDGAR is an online database of public companies filings with the SEC. It stands for Electronic Data Gathering Analysis and Retrieval System, and it has a wealth of information. If you're invested in any individual companies or thinking about it, you should dive into their SEC filings, but it can be really hard to understand exactly how to use EDGAR and get the info you want from those filings. So to help me give an overview of what you can find and how you might use it, I gave a call to Michelle Leder. Michelle is the founder and editor of Footnoted where she breaks down actionable insights from SEC documents for subscribers. She's been studying these filings for more than 20 years and has a lot to say about what can seem like a jumble of boring paperwork. The proxies annual reports and IPO prospectuses housed in EDGAR actually hold amazingly interesting information. Just let Michelle tell you how to find it. Well, Michelle, I think all the weirdos like us who love SEC documents have their favorite, and mine would definitely be the IPO Prospectus known as an S-1, and this is basically the origin story of a company. This is what they want to put forward to their investors when they're going public for the first time. So you get so much good stuff in there, so much history and perspective. CEOs typically write a letter that gets into there. It can be really fun. What's your just favorite SEC doc to pour through?

Michelle Leder: I think it has to be the proxy statement. I just did a quick post on LinkedIn talking about how it's the sexiest document out there. And it's because nobody would ask how much money you make, but here companies are disclosing here's what the CEO made last year. This is how much he spent on the corporate jet. This is how much he spent on finger food at the Super Bowl. Yeah, maybe not that quite granular, but it does give you a lot of information on these sorts of things, and I think it's a really interesting document and a lot of people don't spend a lot of time with it.

Jeremy Owens: And for any investors who are invested in individuals stocks, this is a very important document. The proxy gives you all the things you're going to be voting on at the annual shareholder meeting, and especially important right now because we're getting all of the proxies from companies that are kind of on the calendar year. They will be issuing their proxy by the end of April. They will usually have their shareholder meeting in the next couple of months. So you can see what you're going to be voting on, and you really should be voting if you are invested in an individual stock.

Michelle Leder: Yeah, meetings are happening already. I mean, you see the bulk of... The deadline for companies that are on a calendar year is to get their proxy statements in by the end of April. I believe it's April 29th this year because of the leap year. Normally it's 120 days after the end of the year, so that would be April 30th, but a day earlier this year. So you have companies disclosing all sorts of things. I mean, not every single line of every single proxy is interesting. I don't want to sell it like that. But if you spend some time and really, quite frankly, if you own stock in a company, you really should be spending some time on this type of thing. Maybe not if it's one holding in your mutual fund, then probably not worth the investment of your time. But if you own outright shares, you should be reading this stuff.

Jeremy Owens: Yeah. If you're interested enough in a company to go out and buy its stock, then reading the proxy and really getting to know the company and what it's going through and what it's asking of its investors, a lot of companies will put even more in there about what's happening. And I would say the annual report as well, which is known as a 10-K, is a very important one because that's really when they're going to disclose everything. They may not want to disclose in the proxy or in their official communications. And there's a process you can go through to look and see what's different from last year. And I look at the S-1, the IPO Prospectus and the annual reports almost like a continuing story. I've been a comic book fan since I was a kid, and I look at the IPO Prospectus as the origin story and the annual reports as the continuing series and the new adventures of everything I learned about in the IPO Prospectus, but those known as the 10-K, you also get them on the quarterly known as the 10Qs, are how you can kind of keep up with where the company is headed as it goes through its life.

Michelle Leder: The most important thing, Jeremy, and I'm sure you take this approach too, is when you're reading a filing is you're trying to think what are they telling me and what are they trying to tell me?

Jeremy Owens: And what are they trying not to tell me?

Michelle Leder: Yeah, basically what question are they really trying to kind of skirt around?

Jeremy Owens: Right.

Michelle Leder: That's just fascinating to me.

Jeremy Owens: And those are the kind of things you can get if you're really paying attention to these filings. And again, I just have to say that if you're invested in an individual company, you really need to keep up with these filings. And beyond what we've already seen, let's run through a few more. One that is very important that you'll see the most often is called an 8-K. Can you run through that for us, Michelle?

Michelle Leder: The 8-K, it's been described as a material event, but that's actually not the true definition. It's really like anything that an investor would want to know is really what the definition of an 8-K is. So that's a pretty large category. It might be a director resigning. It might be a CFO stepping down. It might be a new CFO coming on board. I've seen a CEO with a domestic violence issue. That's disclosed in an 8-K. It really can be pretty much anything, and sometimes it's as short as one sentence. And what it really is it's just sort of an update on something important that's going on with the company. One of the things, Jeremy, that's really interesting is this is where it comes to reading between the lines. I mean, I still remember Peloton a couple years ago before things got really bad there. The audit committee chairman suddenly resigned on a Friday afternoon, and of course, there were no disagreements and whatever. But over the next couple of months, the stock went down and then there was an audit committee investigation. Eventually it comes out in the wash.

Jeremy Owens: It can be the first sign of trouble. If you see something like that and then you keep watching and you start to see other dominos fall, a lot of times you go back to that 8-K that you thought wasn't a big deal and go, "Oh, that might've been where it started." Again, a lot of these documents also have attachments, addendums at the bottom. If you go down to other documents, attach them, including contracts with some of the biggest executives, write leases for some of their buildings on their headquarters. And there's fascinating stuff if you get down in there and really dig in.

Michelle Leder: Look at the Trump media filing that was made just the other day. It was filed so late on a Friday afternoon that it wound up not being available until 6:00 a.m on Monday morning. And that included the lockup agreement that you hear about in the news right now where Trump and other executives of the company can't sell shares even though the stock had been surging because they have the six-month lockup, which basically is like a handcuff on selling shares. Then there was other sorts of agreements attached to that. It was a fascinating filing, and you have to wonder why it was filed at like 9:15 at night on Good Friday.

Jeremy Owens: Any other filings you find interesting or think that investors should keep an eye out for?

Michelle Leder: I mean, I always love the merger proxy, which is the DEFM 14. So that's after a deal has been announced.

Jeremy Owens: The TikTok of how a merger happened.

Michelle Leder: How the merger happened. It's fascinating. It's like we met on the mountaintop or we met skiing. It is. That's the closest you probably come to fiction in an SEC filing.

Jeremy Owens: It's actually reading a narrative. Yeah, they have to put the narrative of how it's sold. You sometimes get mystery players, unnamed Company A came in and made this offer and on and on, and it really can read like a gripping novel of sorts.

Michelle Leder: Yeah, absolutely. So that's the other one that I like to read. I mean, of course they're not always available, right? It only happens when there's a merger.

Jeremy Owens: For sure. And if you have more questions about SEC documents, please feel free to reach out to me or Michelle. Michelle has her newsletter as well as a free post on LinkedIn once a week, a subscription-based site called Friday Night Dump. Check her out on all her social platforms. And Michelle, thank you so much for joining us.

Michelle Leder: Thank you. Take care.

Jeremy Owens: Before we go, it's time for what we are watching. A look at the news you need to know for the rest of the week and beyond. Bitcoin is set to experience its next halving. That change reduces rewards for mining the cryptocurrency by half. Some investors are bullish, pointing out that previous halvings have led to price increases. Others say that the current economic environment and the already high level of attention on Bitcoin may dampen the impact of this event. Either way, the price of Bitcoin will be worth watching. Consumer spending is still strong, according to figures released earlier this week. Retail sales increased 0.7% in March, stronger growth than economists expected. This is yet another sign that higher interest rates and inflation have not tamped down American's ability to spend and keep the economy rolling. The net effect could be higher interest rates for longer. Stocks have struggled so far in April as strong economic news dashes hopes for interest rate cuts. On Monday, both the S&P 500 and NASDAQ indexes fell lower than their 50-day moving averages for the first time in months, a big sign that support for stocks could be eroding. One thing that could reverse that trend is healthy earnings reports from big tech and beyond. We'll be covering some of those reports, including Netflix, Tesla, and Microsoft in the days ahead, so keep an eye on MarketWatch for coverage of those. And that's it for this episode. Thanks to Angela Moore and Michelle Leder for joining us. To keep following the latest on retirement, head to Marketwatch.com. And if you're interested in learning more about Michelle's work with SEC documents, check out footnoted.com. You can subscribe to the show wherever you get your podcasts, and please do. If you like what you heard, please leave us a rating or review. It really helps others discover the show. And let us know what you want to hear from us. You can reach us at onwatch@marketwatch.com. The show is hosted by me, Jeremy Owens, and produced by Mette Lutzhoft and Jackson Cantrell. Isaac Gaines mixed this episode. Melissa Haggerty is the executive producer. We'll be back next week with a new episode, and until then, we'll be watching.