Retirement Blog

Finance Blogs » Retirement Blog » 19-year-olds’ view of retirement

19-year-olds’ view of retirement

By Jennie L. Phipps ·
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.

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.


Dave White
August 31, 2011 at 7:19 pm

My hope is that government programs will continue to flourish. That's the only way stupid and irresponsible people are going to learn. I can hear the cry for help. "Oh, if we only knew' Debunk ALL federal programs and agencies, and if you want to support somebody, then do it. But don't expect the minority that work to care for the masses that do nothing but complain about what they don't have. Me, 55 and not counting on Gov't for anything but disillusion.

mark from Illinois
August 31, 2011 at 7:13 pm

The baby boomers just did what rational people do in a democracy, voted themselves higher and higher benefits and lower and lower taxes - that game is over, there's too much debt. As the younger generations figure this out, I believe there will be generational war..maybe not a war in the streets, but you will not see too many Gen Xers or millenials having a relationship with their leech parents much longer. I'm 46 and have already completely cut off my relationship with my mother as I couldn't stomach her welfare life of a public pension, medicare, and social security. She wouldn't admit it was her generation that destroyed the country and bankrupted the future so I cut her off.

August 30, 2011 at 5:28 pm

Social security was always a scam. At the time of its creation the average retiree lived to collect the payments for less than 2 years. The "surplus" was used to fund the various social "reformation" schemes of FDR and his disciples. Ideas that sometimes seem to make sense on paper, to people that know nothing about economics, that frankly failed time and time again.

I was talking to my father about social security in the 70's. He saved for retirement, living quite frugally with my mother who returned to work after the kids did not need the constant watching any more. They figured that it would not be there for him. Turned out he was semi-wrong since many of the suggests to save it would eliminate anyone that was responsible enough to save.

The only way to continue the program is to raise the retirement age up gradually until such time as the money going in balances to what is going out. This also means freezing the amount paid and lowering the cost of living adjustments; they already have lowered the COLA in a backdoor way rather than honestly.

They also need to add a means test. If you are worth many millions (real money, not theoretical) or have multiple pension streams from the public, its time to let at least the social security pension go, if not all but the highest paying pension period.

edward smith
August 29, 2011 at 6:15 pm

I started work as an engineer two weeks after my 21st birthday. I was told by my employer that my retirement date would be in 44 years at age 65 in 2011. At that time I could not conceive of the year 2011. I doubt many of these GEN whatevers could seriously think of retirement.

Mary from CO
August 25, 2011 at 5:17 pm

So - Mike from Iowa is whining about us baby boomers. Guess what Mike - we helped by SS for YOUR PARENTS AND GRANDPARENTS - and many if not most of us have worked 10-30 years longer than you have and paid in the whole time (in fact, as late as the mid 60s/early 70s, we were paying SS benefits for the widows of not only WWI vets but of CIVIL WAR VETS). Some of us used to have "defined benefits pension plans" but when the companies (UAL, Frontier, GM, etc) declared bankruptcy, they DUMPED the underfunded pension plans on PBGC, and the folks who were retired had their pensions cut by upwards of 2/3 - and the folks I know who had worked for those companies took pay freezes and cuts over the years with the proviso that they would have a comfortable retirement (meanwhile, upper management gets cash payouts when they leave - even when they are fired for cause and get everything they were promised and then some). Today of course, when jobs are being offshored by the hundreds of thousands, the folks over 50 are most likely to be "let go" because we are the ones making the most - and we are also the ones most likely to be discriminated against when we go on job hunts - because we are "too old" (forget that we are the most experienced and are generally worth every dime they might pay us).

Now - if they discussed "means testing" younger folks might have a point - for instance, should Sen. John McCain be receiving his full Senate pay + his full military retirement + Social Security - especially when he is married to a multimillionaire?

So Mikey - want sympathy from most of us "greedy" baby boomers - who did awful things like survive WWII, Korea and Viet Nam, not to mention helping you get to earn $150,000/year because we busted tail to improve this country (and for which we were rewarded by inflation rates that invariably kept many of us from doing a lot of saving - silly things like putting children through college, etc)? I think we can afford to get together to buy you a dictionary with a bookmark stuck on the page with words that start with "SYM"!

August 24, 2011 at 2:52 pm

I like the idea of getting what you paid into it. Seems fair. But I want to get what I HAVE PAID INTO it when it's my turn to retire. That would be a complete rip-off to pay into S.S. for 50 years and not get my return?

If the government would leave S.S. funds alone and not borrow from them that is another good start.

August 23, 2011 at 10:09 pm

There is an obvious simple way of making Social Security not only balanced, but profitable. Treat it similar to a personal retirement fund. In other words, you can only withdraw what you put in, plus interest earned. For people that die early, that money would basically be the "profit".

August 18, 2011 at 7:31 pm

Raising the age of retirement would be a great start. When social security was started everyone contributed about $60/ year, the retirement age was 65 and the average life expectancy was 60 years old. Now, with the average life expectancy at around 77 years of age, people retiring at 65 are receiving a lot more money than they ever put in. Raising the retirement age would be a great start.

August 18, 2011 at 2:12 pm

....Funny, why was no other type of welfare reform (other than Medicaid) placed as an option? It's because they're all broken down so as not to present a large target. If you pool together the budgets for TANF, Section 8 housing, Freddie Mac, Fannie Mae, HUD, FDA, and other "housing authorities", free college to welfare recipients convicted of felony drug crimes (Yes, I'm serious), food stamps, and any of the other myriad amount of programs that are parasites to Medicaid, such as mental health counselors, follow up appointments for mental health meds at the doctor's office, etc......Let's see what the total is on THIS mess.......

mike from iowa
August 18, 2011 at 1:51 am

Otto's bias is very obvious. He is so wrong. I am 47, and I doubt that I'll ever get any benefit from these programs, they'll be gone before I'm 70. Earning $150,00 per year, paying $14.8 % SS tax (my 6.4% plus employer match of 8.4% which otherwise would be MY salary, think about it), I've paid in $300,000 over 20 years, and in the ponzi-scheme known as social security, it all goes to the Baby Boomers. They are selfish and will exhaust millions of dollars to stay alive one more month. The system doesn't work, abandon it. And give me back my $300,000.

The Baby Boomers are like a plague of locust, and the generations coming after them are left no remaining resources, only a bankrupt economy and rampant war.