Stages of Life . . . .

We have all heard about how, as we age, we transition in life from one thing to another.  We start as completely dependent beings – infants who need someone else to provide everything for us.  Then we get a little more independence when we can walk and talk and can communicate feelings that exceed simply pain and hunger!  Next up comes our teenage years, when malicious aliens kidnap our bodies and brains, and we no longer operate under a system of logic and understanding . . . instead, it is all hormones and peer pressure! And, to date, no one yet has come up with an antidote for this part of the human experience!

But, somehow we make it into adulthood.  We graduate from high school, go to college and get our first real job.  So here we are – bona fide “grownups” – experiencing all of our new and exciting responsibilities – career, marriage, childbirth, mortgage, teenagers of our own(there’s some “karma” for you!)and, if we plan well, eventually financial independence and retirement!

And each stage of our development offers great experiences.  I feel very lucky to have grown up in the 1950’s and 1960’s, where, as children, we were allowed to play unsupervised, for the most part.  I think it helped us develop better coping and interpersonal skills.  I also had my first paper-route at age 11 and that started my working career, which has gone on uninterrupted for 54 years!  And, I remain convinced that my work ethic, and that of many in my generation, is shaped by these kinds of experiences.

But, it’s funny . . . ask anyone about their own childhood, from Baby Boomers to Millennials to Gen Xers, and I’ll bet they think their era was fabulous too!  I think about how much more technology-savvy younger people are than I will ever be, and I have to admit, that is a part of their experience that I kind of wish I had more exposure to at a young age.  I actually might be able to do something with my cell phone besides sending an occasional text message and checking to see if the Yankees won their baseball game!

So, each generation has its unique skill-set based on their shared experiences . . . and each generation has its own challenges.  The folks that came before me had a very clear path.  You got a job, you worked there for forty years and you retired with a gold watch and a pension – a guaranteed income for life that your company rewarded you with for all your loyalty.  And, heaven forbid, you ever got sick enough to need supervised care, this was a responsibility typically taken up by family members, not institutions.

Well, we can throw those days out the window!

My generation was introduced to the 401(k) plan, where we elected to put part of our paycheck into an account that would grow and, hopefully, be enough to provide a meaningful income in retirement to complement Social Security and allow me to live with dignity in my “Golden Years.”  And we now have an institutional system of care for our senior citizens that can cost north of $100,000 per year!

And, what is it going to look like for the next generation – those who are graduating from college with huge college loan commitments?  Currently the amount of student loan debt that is outstanding is over $1.4 trillion!  And college costs are likely rising at a faster rate than general inflation.  That is a very scary combination.

When I went to college, I was fortunate to be able to pay my own way.  But, tuition for a private university back in the early 1970’s was less than $3,000 a year!  And, working a couple of jobs in the summer and working 5-6 nights a week during the school year, I was able to swing it.  How in the world can a college student do that today?

So, the Millennials, who may be the most educated generation of Americans ever, are starting their first jobs with, in some cases, thousands and thousands of dollars of debt.  So, what do they do?  Pay off their loans?  Save for Retirement?  Heaven help them if they hope to buy a house!

Their path will be different from my path, just as mine was different from my parents and grandparents. But, I really believe that you and I have a responsibility to help prepare this next generation to cope with these issues as Social Security continues to be financially stressed, and as living expenses (and, ultimately, retirement expenses)continue to go up with even nominal inflation.

And Congress and Corporate America needs to do their part.  Abbott Laboratories, an American medical devices and health-care company, has instituted a very interesting new policy to help their younger employees.  If you have student loan debt you can direct a portion of your earnings toward that debt, but Abbot Labs will make a matching contribution into your 401(k) plan.  So, rather than a young employee having to struggle with that decision – do I pay off debt or save for retirement? – this hybrid strategy allows him or her to do both.

Abbott Labs got a private letter ruling from the IRS, who agreed that this was legal. Now, it is up to Congress and the rest of Corporate America to catch up and do their part to make this kind of strategy available to more young workers.

And, we can do ours as well. If you have adult children, grandchildren or younger co-workers, sit them down and explain how systematic saving and, especially, the remarkable power of compound growth, works over a long period of time.  And, if you’d like, we can help.  We have lots of informational handouts on these topics.  Feel free to reach out to us if you’re ready to step up and make a difference in a young person’s life.

Show them how caring and concerned YOUR generation is!