Class Assignment and Discussion: The Money-Death Problem

The New Yorker has always been famous for it cartoons, and one of the best is a 2003 cartoon by Barbara Smaller that shows a husband talking to his wife, saying, “If we take a late retirement and an early death, we’ll just squeak by.” 

As we learned in Chapter 16 of Personal Finance Turning Money Into Wealth retirement planning is one of the most important personal finance tasks you have.  Right now you are probably thinking that you’re too young or not wealthy enough to worry about retirement.  Think again. Regardless of your age, you need to start planning for retirement now.   Principle 2 reminds us that Nothing Happens Without a Plan and the way to do this is to focus on retirement as specific financial goal.  As you learned in Chapters 1 and 2, you’re going to have a lot of financial goals in your life. Retirement, though, is a biggie. After all, how well you do in achieving your retirement goal is probably going to determine how much you enjoy the last 20 or more years of your life.

It’s hard to think about retiring when you’re young. For most people, today looms larger than tomorrow. That car loan or mortgage you’re trying to pay off this year will no doubt seem far more important than your financial situation 30 to 40 years from now. But just think how worried you’ll be when you’re 65 and you don’t have a dime to retire on.

Keep in mind that according to the Transamerica Center for Retirement Studies 2011 Survey, the biggest single financial worry for American workers is the fear that they will run out of money during retirement.  Reaching your retirement goal is even more difficult as a result of the fact that interest rates are at near 50-year lows; retirees today are less likely to have pensions and those pensions are often smaller than retirees had in the past; and retirees are now living longer – in effect, many soon-to-be-retirees may spend more years retired than they spent working.  This can be scary stuff to think about but as Principle 1 states – The Best Protection is Knowledge.  The more you know about the importance of retirement planning and the consequences of doing it or not doing it the better prepared you will be to take those first steps toward reaching your retirement goals.

Discussion Questions and Assignment:

  1. Take a look at the article “Uncle Sam Wants You to Save for Retirement” from TransAmerica.  What did this article suggest?  Be prepared to discuss it in class.
  2. Take a look at “A Source of Inspiration: Future Early Retirees” from the TransAmerica 2011 retirement survey.  What did you find?  What two things surprised you the most from this study?  Be prepared to discuss your finding with your class.
  3. Take a look at “A Source of Inspiration: Future Early Retirees” from the TransAmerica 2011 retirement survey.   Pick two slides from the study and write a one page paper on why you found them both surprising and interesting.  Be prepared to share your findings with your class.
  4. Review Principle 3 – The Time Value of Money.  Be prepared to discuss how this concept can impact on your retirement savings goals.
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