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many of their own medical expenses. Also, home care services and non-rehabilitative nursing home care are not covered by Medicare. According to the U.S. Department of Labor, almost 20% of a retiree’s income is spent on healthcare ! Medical costs can quickly deplete retirement savings.
IV. Retirement Preparedness for GenZ While the situation is dire, there are some things you can do to avoid the sad fate of an underfunded retiree. Here’s what experts recommend: Be Aware! Many people are not even aware of the financial risks they face in retirement. You’ve read this far in your book and hopefully paid attention in class, so now you are aware of the problem. You may check the box. Start Early. Start saving as early and as consistently as possible over a long period of time. That means making sure that the job offer you accept includes a retirement plan. If it doesn’t or you freelance, get all the benefits you can from consistent annual contributions to an IRA. Avoid taking withdrawals from your retirement fund or IRA until you are eligible. Max Out Benefits. If your employer matches your retirement plan contributions, max them out! Check Your Vesting. Don’t make a bone-head move and leave your job a week before you’re vested in your employer’s contributions. Know the vesting schedule and work it to your advantage. Delay Retirement. As a general rule, employers can’t force anyone to retire. It’s considered age discrimination under the Age Discrimination in Employment Act (ADEA) of 1986. If you want (or have) to delay retirement to continue earning a salary and building your retirement fund, you can do it. In fact, many experts recommend delaying retirement until age 70. Assess and Adjust. Your goal is to be able to maintain your pre-retirement standard of living when you are no longer pulling down a salary. Trust us on this: Your 21 year old self’s standard of living which finds eating stale pizza for breakfast and sleeping on friends’ sofas perfectly acceptable, will hold no appeal to your 65 year old self. As you increase your income and upgrade your lifestyle over the years, increase your retirement savings too. Stay Healthy. Don’t let health care costs eat up your retirement fund. Exercise, eat right and stay active well into your senior years. It’ll make you and your savings last longer. With every lap and pushup imagine the money you’ll save! Reflect on Learning: Can you list the unique challenges your generation faces in funding retirement? Answer: Longer life spans require more retirement savings, low 401K participation rates and/or failure to max out benefits, low savings rates, high student debt, unstable Social Security fund, high consumer debt, low homeownership rates. Watching TV Alone According to the BLS, 44 percent of Americans ages 65 and older live alone and spend over half of their leisure time watching TV. Fin Lit Trivia Fin Lit Trivia Fin Lit Trivia PRODUCT PREVIEW
THE 21st CENTURY STUDENT’S GUIDE TO FINANCIAL LITERACY 183
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