Play now. Pay later. Take stock of your future — think retirement.
Don’t wait until you are middle-age to think about your old age. I know it is easy for you children of Generation Xers to think that you are a zillion years away from social security. Social security or retirement savings are phrases that you’ve probably heard tossed around by your parents and grandparents. But if you are a forward-thinking youth and have been paying attention to the reports about social security, then you know that it is a shallow well – expected to run dry by 2036 – and may not be there when your time comes to drink from it.
Grandchilden of Bill Gates, the Kardashians, or Russell Simmons may have no worries about their retirement years. Chances are they could be enjoying a super rich lifestyle long after receiving the invitation from AARP. Even if their wealthy predecessors have deceased and unless they did something horrible enough to get disinherited collecting social security won’t be on their bucket list.
This message is not intended for the youth who by fortune, fame or birthright need not worry about spending their golden years doing anything less than being kicked back in a luxury home or sitting by the pool in a Palm Springs retirement community. But if you are one of the millions of upcoming disadvantaged youths now of legal working age, living in a paycheck-to-paycheck family or maybe even living independently, but are still in a tedious situation, you need to prepare now to avoid struggling later to keep afloat in the sea of geriatric destitution.
According to the U.S. Bureau of Labor Statistics, there are 13.9 million unemployed persons in the U.S. (9.1 percent). If you do not currently have a job and are trying to get one, best of luck to you. However, if you are fortunate enough to have a job and that job allows you the opportunity to invest a portion of your pre-tax salary into a 401(k) or a similar retirement program, then do it now.
Many companies will match all or a portion of the dollar amount that you invest in their plan. Whatever you can contribute, if it is $25, $50 or $100 per paycheck do it; that amount doubles with your employer’s contribution. It is to your advantage to contribute as much as you can afford. If your job offers an employer-sponsored retirement plan and you were not informed by HR or your manager when you were hired or if you don’t understand how the plan works, ask your employer about it.
According to the August 2011 issue of Black Enterprise magazine, ““Roughly 66% of African Americans and 65% of Latinos participate in their company’s defined contribution plans versus 77% of white and 76% of Asians . . . blacks and Latinos contribute less to their plans than their white and Asian counterparts. . . Without a significant effort to improve savings and investing behaviors, African American and Hispanic workers are in danger of retiring into poverty.” That is your wakeup call young people. Don’t push the snooze button and ignore it, because your years will fast-forward sooner than you think.