Indeed, we’re hipsters. Critical consumers. Concerned global citizens. Gadget freaks. Into wellness. Fast learners. Flexible workers. Each of us a little unit of subculture, capable of generating powerful trends with a few taps on the keyboard. And it gets even better, because we’re human beings too!
Why? Today’s twentysomethings are a breed apart. We managed to clear the trap of post-modernism and seem to have moved to the next level of personal development. Bypassing the Achievement so sought after by our parents, we go directly for what is really important (to us): fulfilment. Whether it’s through a diet of Ritalin and videogames or dedicated idealism, fulfilment of our human needs is the focus of Generation Why.
We thrive on paradox, knowing that knowledge isn’t power. You have to act on it. Action determines outcome. That’s why we sometimes choose not to. It’s our ability to learn and choose the right actions that will ultimately give us what we need and want.
How? Our personal styles are so intertwined with today’s culture that it is hard to tell us apart at all. How does Generation Why manifest itself? Who are our role models other than David Lynch? Most portrayals of Generation Why are marketing-profiles intended to uncover our soft spots. But there is a genuine spirit waiting, a generation formed by the laws of communication. A massive age group, compared to which the generation of our older brothers and sisters is as modest as the cast of Douglas Coupland’s novel Generation X.
The mediascape created to appeal to our needs mostly fails to affect our will. We’ve been brought up with a whole conspiracy of characters in place. The hippie-turned corporate, the corporate killer-gone-soft, ecological threat, hunger, terrorism, politics, spoon-bending seminars.
What? That leaves only intentions. We have a lot of them and they’re just a as big as our expectations. The power of peer pressure and proximate success have put our learning into a higher gear. We dedicate ourselves to realizing our dreams and claiming our own unique contribution to society. There is no failure, only feedback. The absolute worst that can happen is that you move back home.
We twentysomethings literally have the world at our feet. If only for a minute, we ease our restless minds, maybe reboot the hard drive behind our eyes and make those tough choices that we’ve been putting off. But old age happens to us all. And while you may feel that you are commitment and financially-free, it doesn’t last forever.
So, if your intentions are to be failure-free and live a life of abundance well into retirement, you’ll want to avoid debt.
The concept of a payday loan
The process of acquiring a loan is simple and straight forward enough. You need money, have money coming soon, but cannot afford to wait for it.
This will involve money lenders providing a borrower with an instant cash loan online, which upon agreement, is to be repaid as soon as the borrower’s next payment from his work place arrives.
Documentation showing proof of employment of the borrower can sometimes be required depending on the rules of the institution, but some lenders may skip this step. Simply put, the borrower walks into a lender’s premises or website and writes him a post-dated check, on it the full loan amount plus interest charged. The lender gives the borrower the money and remains with the check. At the due date, the borrower is to repay the money in person.
The concept of these short terms loans is viewed as exploitation, where these people earn their living by draining money from the low-income earners in society. Many countries have banned payday loans all together. As a young, naïve borrower, you’ll need to stay clear of loans of this nature if you are to continue to be failure-free.
When is too early to start?
Financial awareness should start as soon as you start earning money. That means knowing what will be good or bad for our finances and future such as credit and loans.
For most of us, retirement is a nebulous concept. Retirement might be 20, 30, or even 40 years down the road. Our human minds have a hard time looking ahead so far, and truly grasping the implications. Even harder for us to imagine is the fact that we may need to ensure that our money lasts an additional 30 to 40 years into the future. It’s not enough to get to retirement; you have to get through the rest of your life as well.
However, for many of us, retirement will arrive with extra costs. It may not be enough to assume that socking away £300 a month is enough to get you through retirement.
Retirement checklist
What you can expect for your twilight years
Health Care Costs
One of the biggest costs many of us face have to do with health care. And that’s not going to change anytime soon. Fidelity Investments recently released its annual report about costs in retirement and found that a 65-year-old couple retiring in 2018 could expect to pay $240,000 in health care costs — if the man lives another 17 years and the woman lives another 20. What if you live 10 years beyond that? And that figure doesn’t include long-term care.
Once you start adding in long-term care services and realise that the EBRI estimates that Medicare will only cover about 51% of your health care costs, things start to get dicey. You can invest in a HSA starting now to help you cover some of your costs down the road tax-free, and you might want to check your insurance options to make sure that you are covered.
Image credit: Executivestyle.com.au
Taxes
You might not realise it, but taxes could come back to haunt you. If you have put money in a tax-deferred retirement account, once you start withdrawing the money, you will have to pay taxes on it. You can try to avoid it by withdrawing only small amounts, but at some point it will catch up with you when the required minimum distributions start. You can avoid the RMD problem by rolling your account over to a Roth IRA, but you will still have to deal with the tax consequences.
Some choose to just start out with a Roth account (you can invest in a Roth 401(k), too, if it’s available), paying taxes now and allowing the money to grow tax-free.
Also, don’t forget about the taxes that you might have to pay on Social Security benefits. Many people don’t realize that most benefits from Social Security are taxable. The income thresholds are fairly low, too. It’s important to look ahead and prepare for the taxes that might be coming.
Inflation
Unfortunately, inflation tends to creep up on us. Inflation results in higher prices, diminishing your buying power. Add inflation to the equation, and some experts think that saving up a $1 million nest egg is no longer enough to see you through retirement. Don’t discount inflation, since it means that you are likely to spend more than you think — and its effects apply to everything from living expenses to already-growing health care costs.
Takes these costs seriously and start planning ways to offset your exposure to them. With the right planning, and if you take action starting now, you can plan for a prosperous retirement.
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