American Consequences - December 2017

accounts to invest in a business venture that failed. That financial stress led to divorce and Sue found herself living “month to month” on disability. She supplements her meager checks by babysitting for her neighbors. “I don’t know what they expect you to do,” she laments. “At this point, I’ll never completely retire.” She laughs off a question about holiday spending. Tip: Sue isn’t in a great spot. But she’s got the right idea by finding a second source of income in retirement.

KAT , a recently married 28-year-old young professional Kat and her new husband, Ryan, married over the summer. Since they just paid for a wedding, Kat says they’re trying to avoid excessive holiday spending this year: “I have a deal with friends and family – I don’t spend on them, and they don’t spend on me.” However, given the Black Friday deals available, the couple did splurge on a few pieces of furniture to fill out their new home. When our conversation turned to retirement, Kat was blunt: “The way the world is today, I don’t think I’ll be able to retire. We’re more focused on paying down debt, because we both have student loans. We are saving for a house, but not for retirement at this point.” Tip: If your employer offers an employee “match” on 401(k) or other retirement savings, make sure you take it. It’s some of the only “free money” available in the market. Sue let out a melancholy laugh when asked about retirement. For her, the idea of retiring is as amusing as it is unlikely. “When I was married, we owned a house and held 401(k) accounts. I always assumed that the house would appreciate, and that the value of the home combined with our retirement accounts would be our retirement.” Instead, her former husband took out home equity loans and cashed in the retirement SUE , a 61-year-old divorcee living on disability

By Brian Courtney

CLAIRE , a 31-year-old professional, currently taking graduate classes

Claire admits she hasn’t started saving for retirement. “I came to the U.S. on a student visa, so I paid for school out of pocket. Student loans are only available to permanent residents.

On the upside, I don’t have any debt.” After graduating, she found a job that

sponsored her green card and offered to pay for her master’s degree. “Once I get my master’s, my earning power will rise. Then I can begin focusing on retirement. Since I’m not paying student loans back, I’m not going to be far behind my peers.” As far as holiday spending? “I’ll admit,” she says, “I spend pretty lavishly on my family. After all, because it’s international, we only see each other once a year!” Tip: Claire is ahead of most students. The average student-loan debt is about $30,000 per borrower... So many graduating students start out their careers with a negative net worth. Still, waiting to save for retirement is a major mistake.

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