top of page

Retirement by default invests in war

Updated: Feb 2

If you're like most people, when you fill out choices in your retirement plan, you likely aren't thinking about arms manufacturing— even if your thoughts in recent times revolve around the immense loss from escalating war. Even for people who engage in boycotts as a consumer, passive investment into those same companies may not receive the same level of scrutiny.

Your retirement account, like the world at large, invests in war by default. Knowledge is power, so let’s break it down a little further.

Evening sky, colored with a gradient from dark blue to purple, with sparks, smoke, and indistinct debris floating in frame.

What are investments?

An investment is a product that involves risk and may grow in value. Investing is used in retirement plans to give you the chance to make money from your money.

The most common type of investment is a stock. A stock is partial ownership of a company. The units of stocks are called shares. Holders of these shares make money when profits are distributed or when the company becomes more valuable.

You can think of your 401(k) as a kind of lunch box, and inside the box are different investments (ingredients).

We don’t see individual stocks in 401(k) plans, but we do see mutual funds, a type of investment that bundles many different stocks or bonds into one, sort of like how a sandwich includes bread, turkey, and lettuce. There may also be a Fund of Funds which bundles different mutual funds. That might be like a snack pack that contains a sandwich, drink, and dessert.

Nowadays, 401(k)s typically have a default investment election based on your age, and these defaults are often funds of funds.

A double-decker whole grain sandwich sits at the forefront of a table, completely in focus. An identical sandwich sits behind it, but is slightly blurred out, along with the plain dark gray background behind it.

A side of opacity

The goal of funds of funds and default options is to help laypeople make reasonable choices without having to do tons of reading. But the downside is that these employees, now investors, have limited insight into what they are investing in. In fact, many aren’t even aware that they are investing in the first place.

Your plan typically provides an official disclosure about the mutual fund called a prospectus. This is a pretty dense document and may be hard to read. Because it’s more of a mission statement than an ingredients list, a prospectus also doesn’t include information on the actual stocks within the fund.

If you wish to divest (i.e. de-invest) from particular companies or industries, you'll need to get more clarity.

A person in a light blue button-down shirt holds a magnifying glass up to a clipboard, holding papers with indistinct text. They sit at a light gray desk in front of a plain background of a similar shade.

Let's look under the hood/sandwich

There are many resources available to decrease the opacity of your retirement investment options. But first, you have to know what your options even are.

You’ll probably want to start by logging into your 401(k) and clicking around. You may have to click on a link that says “change investments”, reallocate, or something like that. When you see a long list of 20 or so names with letters and numbers next to them you’ll know you found the right thing, see below an example of investment options.

In order to independently research your investment options, the most useful bit of information is the ticker symbol. The ticker symbol is a unique code for this investment for mutual funds. It is often five letters long and will be presented in all caps. If you do not see a ticker symbol, try googling the name for the fund. When you see the ticker symbol that comes up, you can plug that into investment research databases.

As You Sow is a nonprofit organization devoted to making investments more ethical. They are assisted in part by the American Friends Service Committee, the Quaker run, pacifist organization, (and my former place of work). I appreciate that there is a group out there trying to do this for reasons other than profit. Their site is free to use, and provides some great information about the contents of mutual funds and ETFs.

Some investments have a title that implies values-alignment. Screening the companies for yourself is a great way to see if the title makes sense or is just marketing.

You may see, for instance, that military contractors make up a large percentage of the fund's investments. You can also see the amount of investment in well-known arms producers, such as Lockheed Martin, that are likely present in your portfolio. You will also see others that you may not think of as being synonymous with war, such as General Electric, and click to find out that they are one of the top 100 producers of weapons worldwide.

You can also choose for yourself where you draw the line. For instance, if a company has many lines of business, and one of those lines is to make military satellites, are you comfortable investing in them?

A mechanic in a blue, gray, and black flannel shirt is looking at the front of a car with its hood popped open.

Changing the options available to you

If you or your personal financial advisor were to open an Individual Retirement Account (IRA) or a regular taxable investment/brokerage account, you can usually choose from a wide universe of investments. As you know if you’ve ever been vegan, it’s easier to get what you want when you (or your personal chef) are starting from scratch.

401(k) investment options have been curated by the “head chef” at the 401(k) plan, but that doesn't mean you have no voice.

When Query Capital’s sustainable investment advisor Jesse worked at a company focused on storage for renewable energy, alongside many other environmentalists, it took a months-long lobby from employees and management to talk their 401(k) plan provider into making fossil fuel free investment options available. In the end, the business owners had to threaten to replace the provider to get the changes made. (Imagine being so opposed to sustainability that you refused to do your job!) So change can be an uphill battle, but I do think it’s worth at least mentioning that you want better options.

A person is framed in the center of the image, holding a blue and white megaphone to their mouth in front of a blurred out background of protestors.

Closing thoughts

We’re living in a time of unspeakable atrocities, which are made possible in part by American businesses and their shareholders. My clients feel that they vote with their money and that divestment is an important part of their political practices. As the popularity of index funds has surged, I have been concerned by what it means to not make choices about what is worth investing in.

Your awareness has an impact. Changing preferences of young political investors have already changed the landscape of investing. Alongside voting with our votes and direct engagement, your money and your voice change tides.

A beautiful field of red, white and pink wildflowers and greenery.

76 views0 comments

Recent Posts

See All


bottom of page