No Trust in Big Brother – A Lesson in Irony
02 Sep 2014
As I listen to our younger generation, I often wonder how they will do in retirement. The statistics are not good. According to a recent column in the Sunday Review (4/12/12), only 43% of eligible workers under 25 and 62% between 25 and 34 participate in 401k plans. This is low compared to the 70% or more of those over 45. Additionally, those under 25 contribute only 4.3% of their income to 401ks compared to 8.7% of those between 50 and 55. Much of the evidence is showing that members of Gen Y, those born after 1980, are poorer than their parents were at similar ages.
When I listen to their distrust of “the system” and their lack of faith in Social Security and underfunded pensions, I often ask them a simple question, “So with all of this distrust, how much have you set aside for retirement?” More often than not, their response is, “Not much” or “I can’t.” The irony in all of this is that they are heading towards a retirement scenario in which they will be almost completely dependent of the system they distrust.
So, if you are a Gen Y’er and you are distrustful of “Big Brother”, then open yourself an IRA or enroll in your 401k. Don’t fall into the trap and end up 100% dependent on the system that you lack faith in.
Jeffrey A. Johnston, ChFC
Investment Advisor Representative
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