IN MY SHOES: A Financial Wake-Up Call For Generation Y
When Jonathan Kern retired last year after 30 years as a broadcast journalist, he had an epiphany: The paychecks stop. In this Washington Post op-ed, he hopes to use the wisdom gained from his first year on a fixed income to “scare some sense” into young whippersnappers who haven’t already begun to save for retirement:
If you're, say, under 40 - and especially if you're under 30 - you probably have worked only at firms or agencies that offered 401(k)s or their nonprofit cousin, the 403(b). That means that when you finally do retire 25 or 35 years from now, you will be responsible for providing for your own income. No pension for you! …
Every day, every week and every month of your retirement, you'll use up some of the money you accumulated while you were working.
Specifically, imagine that every week you have to pay for food with cash from savings. And it's the same with your electricity, cable, phone, gas, credit card and other recurring bills. …
Sure, if you work until you can collect Social Security, you'll get some money from the government, but it's a fair bet that your No. 1 source for retirement is going to be you. If you are not saving assiduously now, you are going to be much, much poorer in retirement. Restaurants, cable TV, BlackBerry service, travel abroad - even things like beer, fast food and haircuts - all will be fond memories of youth. …
If you plan to retire at 65 and hope to have at least 30 years in retirement, you'll probably need something like $1.5 million in today's dollars. Even a little inflation could push that to $3 million if you're two or three decades from retirement. For the moment, let's leave inflation out of the calculation. …
You can't just cross your fingers and hope that things turn out, or that someone else will take care of it. Start thinking about retirement now. Your life - or at least your future standard of living - depends on it.
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