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20 going on 67: Thinking retirement in college

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By Howell T. Conant

For most college students, planning for retirement is the last thing on their minds, but starting young is the key to living comfortably when you are older, experts say.

“It is important to start thinking about retirement when the opportunity presents itself. Employers often offer retirement plans such as 401k’s and will match a percentage of the money that you deposit into those retirement accounts,” Stonehill College Finance Professor Michael Mullen said.

Mullen said the most important investment a young adult can make is paying down debt, whether it’s student loans or credit card debt.

“If you can’t pay for it in cash, you can’t afford it, unless you are buying a car or a house. Those are the exceptions.” Mullen said. Paying for things on debt is only losing you money, he said.

But unfortunately, most college students don’t know the importance of saving for retirement early.

“I could tell you anything you wanted to know about Criminology, but I wouldn’t know how to do my taxes. As a [criminology] major, they don’t teach about retirement or personal finance,” sophomore Zach Bouchard said.

Bouchard and other students agreed that if there were a personal finance course offered at Stonehill, they would without a doubt take it.

“I would absolutely take an introductory personal finance class. I’m an accounting major so I know a bit about business, but not really what goes on behind the scenes. It would be nice to know how to manage the money I make so I am able to retire comfortably,” sophomore James Goldfuss said.

If a person just out of college saves up money when they first get their first job and puts $5,000 in an IRA account at 22 years of age, that money, compounding at an average 10 percent return rate, would be worth $301,200 by the time that person retires at age 65, according to’s IRA calculator. If that person did the same thing but didn’t start investing until they were well into their career at the age of 30, as opposed to 22, they would have $140,512 when they turned 65. If the same person managed to come up with $1000 each year after their initial investment and put that money into their IRA, it would be worth $952,841 if they started when they were 22 years old, and $438,639 if they started when they were 30 years old.

Say that person retires when they are 70 instead of 65. The 30-year-old investor would end up with $713,148 in their retirement account, while the 22 year old would end up with $1,541,276. Theoretically, by the time the 22 year old turned 70, he or she could easily live off of the interest their IRA was earning alone, which would be almost $150,000.

Of course, those calculations depend on a 10 percent return on investment annually, and this percentage is subject to fluctuate above or below 10 percent year to year due to where your money is invested and changing market conditions.

College students are interested in learning about personal finance and how to plan for retirement.

“I would rather learn how to manage my personal finances than take other electives like dance class,” student Chris Bouchard said. Bouchard said he wouldn’t have known anything about IRA’s or 401k’s if he hadn’t worked at a Cadillac dealership over the summer that offered to set up an IRA for him. He declined their offer because he was only going to be working at Cadillac part time.

“The best way to plan for retirement is through your employer,” Michael Hickey of Fidelity Investments said. Hickey agreed with Professor Mullen’s notion to start planning for retirement when you are employed.

“That way you can utilize the benefits your employer can offer you such as matching a percentage of what you contribute to your retirement account,” Hickey said.

Planning for retirement is important. According to experts students should pay down their debts as much as they can while in college, and once they are employed, start contributing to their retirement accounts.

One Comment

  1. Very insightful and well written

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