My 15-year-old likes to tease me about my age.
After watching an old black-and-white movie together, she turned to me and said, “Mom, did they have color back in your day?”
I threatened to give her inheritance to her brother.
But as she jokes about me getting older, I take solace in knowing that I wouldn’t want to be that young again. I like the discernment, self-assurance and financial security that come with aging.
Even so, I was thinking about these exchanges with my daughter as I wondered what financial advice I would give to this year’s college graduates. Every May, I like to impart some wealth-building wisdom. Or, at least, I hope the parents of the graduates will pass on the column. Although, I’ve heard about some eye-rolling when it is received.
How do we get young adults to see that saving for retirement must be a priority? How best to communicate that starting to save while they’re young will allow them to put away a lower amount every month because they’ll have more time to let the money grow?
Maybe we have to let them tell themselves.
So here’s what you do. Take them forward to the future. Send them to two places that will let them interact with their older selves.
The first stop is a website created by Bank of America’s Merrill Edge: faceretirement.merrilledge.com. Sure, it’s a selling opportunity for the financial company but it’s still a great teaching tool.
They’ll need a computer with a webcam. On the site, they’ll use the camera to take a photograph of themselves. Next they’ll be asked for their age and gender. (The company promises your photo won’t be stored or saved.)
Then they’ll get a number of messages with statistics driving home the importance of planning for retirement while they’re young. “Everything you do today, impacts your life tomorrow,” one says.
Then, in about 30 seconds, they’ll see the future.
If they are 18, it’s suddenly the year 2065. Staring at them is a 67-year-old vision of themselves, with age spots and wrinkles. “That’s not a stranger you’re saving for, it’s future you,” they’ll be told.
But the picture alone won’t do it. Placed around the photo are some numbers that hopefully will be motivation to start saving early. One key figure is this projection: If you start investing $50 a month in an IRA, by the year 2063, you could have more than $152,000, assuming an annual return of 5.78 percent. Imagine increasing this amount as you move through your career, bumping up your contributions as you earn more.
There’s also a “Face Retirement” app, but I’m not sure it’s something young adults will permanently want on their smartphone. Still, they could download it just for this exercise and then delete it.
The second way to send graduates forward in time is by encouraging them to write emails to their future selves (letters are so old-school). Go to futureme.org, which allows users to compose an email and have it arrive on a specific date and time, assuming of course they keep the same email address.
Here’s one big piece of advice I would have written decades ago to my future self: Be aggressive.
When I first started saving for retirement, I let my fears of the stock market keep me from investing appropriately for the time I had until retirement. A fellow co-worker who was very near retirement scared me to death about the roller coaster you can experience when investing in the stock market, so I put my money in what he put his money into: treasury bonds. I was just 21.
I could just kick my younger self. It was at least 10 years before I changed my investment mix to include mutual funds.
Suggest that your young adult send a few emails to the future – maybe one every five years as a financial checkup.
OK, I know. You’re thinking: How am I going to get my graduate to do these two exercises?
Dangle his or her graduation present as bait. (Just kidding.)
I hope you plan on having a “now that you have graduated” talk about what comes next financially. If so, make these two exercises part of your efforts to impart the financial wisdom you wished someone had shared with your younger self.
Fast-forwarding to the future is an interactive and, I think, fun way to get young adults to see that time is the best thing they have going for them. And maybe they’ll stop the old-folks jokes, because it’s just a matter of time before someone will be calling them a senior – and not because they are about to graduate from college.
Michelle Singletary can be contacted at:
michelle.singletary@washpost.com
Twitter: SingletaryM
Send questions/comments to the editors.
