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19-year-olds’ view of retirement

By Jennie L. Phipps · Bankrate.com
Monday, August 1, 2011
Posted: 3 pm ET

Did you ever see one of those T-shirts that reads, "Be kind to your children. They'll be choosing your nursing home?" This maxim, unfortunately, makes retirement planning sense.

Iowa State University Professor of Economics Dan Otto turned his students loose on the question of balancing the budget and managing the debt ceiling. He says they quickly zeroed in on Social Security, Medicare and Medicaid as unsustainable programs that account for 40 percent of the federal budget and are projected to increase rapidly under current trends. The students agreed that these programs should be reformed or even eliminated. They argued for raising the age of retirement, raising the taxable maximum income ceiling on Social Security and making it easier to save.

At the same time, most of the 19- to 21-year-old students didn't think that they would ever benefit from any of these programs, so they didn't believe it was fair that they should be asked to pay for them. "They have a young person's perspective. They don't believe that they are ever going to get old and sick. If I had to characterize their attitudes, I'd call them Libertarians," says Otto.

Of course, the students didn't always agree with each other. Some had personal experience with grandparents and other older relatives that gave them a different perspective. Ultimately, after much discussion, they agreed on two recommendations that our members of Congress should take to heart:

  • Tackle the problems now. Delaying action compounds the costs and increases the difficulties of dealing with issues later.
  • Take a bipartisan approach. The causes and consequences of the federal debt and deficit issues are societal issues, and dealing with them will require bipartisan efforts.

The class ended before this issue came to a head, but Otto says that his students got the point - solving the problems isn't easy and that made them frustrated -- just like the rest of us.

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27 Comments
Machtyn
September 01, 2011 at 3:49 pm

When I was in my early 20s (in college, the same classes these kids are in) I always felt that Social Security was a tax on me given to my grandparents. It is not money that I will see at the end of my life. That's what a savings account and investments are for.

Now that I'm in my late 30's, out of college, with a job (thankfully) and a family, I feel that Social Security is a tax on me given to my grandparents. The money I have put into the system is already spent, or raided (stolen) by our "representatives". I still feel that it is our personal responsibility to create a savings account and invest. I'm not sure if I will be able to retire at 60 or 70.

dask
September 01, 2011 at 12:38 am

I am from Asia and I may not have the whole picture of your society. As a news addict, I follow economic news very closely and due to nature of my job, I have regular interaction with many Americans. What baffles me is why Americans are so prone to live on credit.It seems that they want to continue to have good life when they actually do not have the money in their pockets. In Asia, we do not spend if we don't have it- it's that simple. Why Americans cant find a way to stop outsourcing their jobs by putting some break on corporations that invest their enormous profits in foreign countries? Why seeing a doctor or having some basic medical service is so costly? Why countries like Thailand can provide better medical attention in 5 star hotel environment using same medical equipment , medicine etc at a fraction of American cost?

AnninVA
August 31, 2011 at 9:02 pm

Reading the comments...people who make more should pay more, be means tested and not get SS. How is that fair?? As a middle income (hard) worker, I would rather have control of the 14.8%. I would invest/save it as I see fit (my 401k would be double). Means testing benefits people who do not save. Maybe I should blow all my money on expensive cell phones, cable, mortgages I can't afford, and manicures.

PS I am earning those retirements.