Young retirement

Loretta Merrill posted May 24, 2022 7:52 PMRatings: 0Rating: 0 out of 5 stars

I think that young people do not save for retirement because they do not understand how.  When I was young and had some expendable income, I did a lot of research to try to figure out how and where I could invest my money.  For a few years I was able to invest in my retirement.  However, as life began to demand money for things such as buying a home and having kids, my expendable income disappeared.  As a government employee, I am forced to invest 3% of my income in my retirement and my employer also adds to this.

I think that the newly mandated financial literacy courses that will be taught to high school students will greatly help the situation.  Students can learn how and where to invest for the future.

Noah Snare posted May 24, 2022 5:59 PMRatings: 0Rating: 0 out of 5 stars

Saving for retirement at a young age is very crucial for our futures. Today more and more people aren’t doing that and I think that is due to people not having the money to save and people putting their money toward investments instead. The past few years families have been living pay check to pay check. With the price of everything going up and wages staying the same it is very hard for some families to provide. If you have kids and don’t make that much money you may not have the money to put into retirement as you used to be able to do. Another reason people aren’t putting money into retirement is because they are putting that money toward investing. Weather that be the stock market, buying land, or buying houses, all of these are ways people use to get money to retire. Rather than putting money into an account people will take that money and put it somewhere where it will make them money.

President, J. C. V., Cusick, J., President, V., Shepherd Director, M., Shepherd, M., Director, Manager, L. O. S., Oduyeru, L., Manager, S., Boteach, M., Madland, D., Linden, M., Hersh, A., Buchanan, M. J., Hardin, S., & Mulligan, K. (2011, August 8). Why millennials aren’t saving for retirement-and what we can do to change that. Center for American Progress. Retrieved May 24, 2022, from https://www.americanprogress.org/article/why-millennials-arent-saving-for-retirement-and-what-we-can-do-to-change-that/

Sebastian Moncayo posted May 24, 2022 12:05 PMRatings: 0Rating: 0 out of 5 stars

I believe that many Americans do not look ahead to retirement because they feel that time may never come. The period of waiting to use your money outweighs the need to save for the future. Most young Americans would rather take the money they have now and use those on discretionary spending like travel and entertainment. They feel the money they have now is to be used on the present and worry about retirement when the time comes.

A survey found that Americans’ average personal savings have grown 10% year over year, from $65,900 in 2020 to $73,100 in 2021. Retirement savings have jumped 13% from $87,500 to $98,800 (Vega, 2021). During the pandemic people were able to save more because of the stimulus money many Americans were receiving and the lack of discretionary spending. Americans were buying homes during the pandemic and now those homes have gained in value allowing people to refinance those homes or sell for a huge profit helping Americans put more into retirement. I think we have seen a lot of changes on spending and saving in the year 2022 due to inflation which may halt saving again for many Americans. I think Congress needs to tackle inflation and combat the wage gap to cost-of-living in this country because Florida is a prime example of making the same in wages from a few years but cost-of-living being 30% more Year over Year. Rent has skyrocketed leaving people shuffling to find more affordable housing but still making a limited wage. Gas has also been hit peoples wallet very hard and not everyone can afford an electric or hybrid vehicle but I believe these changes will take time and hopefully Congress and the Federal Reserve can come to agreements to tackle these issues.

Vega, N. (2021, August 20). Here’s how much money each generation has saved for retirement. CNBC. Retrieved May 24, 2022, from https://www.cnbc.com/2021/08/20/how-much-each-generation-saves-for-retirement.html

Amber Butts posted May 22, 2022 10:54 PMRatings: 0Rating: 0 out of 5 stars

Starting to save for retirement from the day you get your first job is the recommended way to save. Many Americans do not initially set up their retirement fund when they first get a job, for most people, this is at about age 18. At age 18, many are thinking that it is not going to benefit them to have a little extra money coming out of their paycheck for retirement because it is so far away. Another reason may be due to the waiting period many employees have to set up a retirement fund. After that waiting period, the employee is no longer thinking about their benefits.

A great way to resolve this issue of not setting up a retirement account would be to allow for the paperwork and sign-up process to happen when the employee is setting up their direct deposit and other benefits, instead of having them wait. It could also be beneficial to have an opt-out option, where if the employee does not opt out, they will automatically be signed up for the retirement plan offered through their employer. I also think having a member of human resources sitting with the new employee to explain what the retirement fund is for and that it is going to likely lessen their overall taxes taken out of their pay too, this may help employees to feel more open to setting this up.

ANSWER

Young Retirement

Post Response 1: Loretta Merrill

I agree that most the young people do not understand how to save and the entire process. They lack a viable support system to take them through the saving process. For example, if parents and guardians fail to introduce their children to the saving culture, this can affect their saving abilities and capabilities. Thus, there is a dire need to introduce children to this culture as early as possible. Also, introducing incentives that motivate people to save is a strategic approach that can boost the saving culture, as highlighted by Husin and Mohamed (2021). It can help individuals change their minds and behavior as far as saving is concerned. I admire that you created the saving habit even though you experienced challenges later as your life expanded and responsibilities paved in. However, I believe this is inevitable, and you stand a better chance of shaping your life positively than someone who did not save. I also agree that learners should be introduced to financial literacy courses. This will see them develop a saving culture.

Response 2: Amber Butts

I agree that once people start earning, they should start saving. However, this is not always possible, considering that some people might not be earning enough to save. For example, someone who is earning a basic minimum might leave a person with nothing to save as they spend most of their resources on meeting their basic survival needs. This is a huge barrier to their saving culture. However, this does not mean that people should not learn about saving. They can save little bits that add to something substantial in the future. I do not entirely agree with the mandatory sign-up saving process. This should be an autonomous process that people should undertake as it requires a lot of discipline.

Reference

Husin, N. K. M., & Mohamed, A. M. (2021, July). The Effects of Savings Culture and Government Policy in Instilling the Habit of Savings. In 2nd International Conference on Administration Science 2020 (ICAS 2020) (pp. 307-312). Atlantis Press.