Sending Them On Their Way

I was on a break between classes and I ran into the following article in the NY Times: More
Companies Ending Promises for Retirement. The article was about the trend for businesses these days to move away from defined-benefits retirement or pensions plans, the traditional type of pension that many of us older types think of when we hear the word "pension", into 401(k) plans. What sparked the sudden interest in this trend was the recent announcement by IBM that it was freezing its current defined benefits pension plan and converting over to a 401(k). IBM used to be the standard bearer for a guaranteed job in the U.S., and for taking care of its employees up and through retirement, and now in both cases it's entered a bottom line world, with no job guarantees and you're on your own when it comes to getting ready for retirement.

U.S. News & World Report has an interesting article on baby boomers coming of age with the 401(k), Boomers are about to find out whether their 401(k)'s are such a sweet deal. The article had a few interesting points to make (if you're interested in your retirement you really should take the time to read this article):

"But older baby boomers, the first generation to have climbed the corporate ladder in the 401(k) ear, are just now turning 60. This means that boomers have only begun the long and anxious transition from work life to retirement. And since many boomers are expected to live well into their 80s, it's too early to say whether 401(k)'s have encouraged a sufficient level of saving to fund a full - and fulfilling - retirement.

"So far the news is decidedly mixed. While the vast majority of workers eligible for 401(k)'s contribute to these tax-deferred plans, a third of workers 60 and older aren't using them. Even among older boomers who are participating, nearly 20 percent don't take full advantage of their company matches."

So we can still look at the 401(k) as something of an experiment, we don't have the experience with it at this point to know if it's going to meet the needs of those soon to retire. But this is the way we're moving all retirement plans in the future, so the question in my mind was doesn't learning about this deserve as much attention for a kid in high school as my chemistry course? Let's face it, if the kid's going to be prepared for his or her eventual retirement they had better start saving for it now, as ridiculous as that may seem, because they can pretty much rest assured that they're going to be on their own in another fifty years when it comes to money to live on. However you cut it, students today are going to need to have some sort of handle on what's going on with regard to how to handle their money and prepare for the future, and on the whole I just don't see that happening.

After reading the article on IBM I took some time away from chemistry in my next class and asked my students, "How do you guys expect to prepare for retirement?" As you may guess given that this was a population high school juniors, with one or two seniors thrown in, i.e. 16 and 17 year olds, the response was interesting. One kid wanted to put his money in a savings account, someone else figured that he'd work for a company where he'd retire like his dad, another was at least somewhat on the right track when he said he'd invest in stocks and bonds, though on the whole most had no response at all, in fact I got this puzzled look which sort of shouted, "Retirement? Dude, I'm only 17 years old!" Yes, true, they're only 17 years old, and the unfortunate truth today is that they need to start preparing NOW if they're to be ready when they need to be.

So here's the thing, we're in a school where the motto is, "We make our students college ready" and it more and more hits me that on some level I'm sure they're going to be college ready, at least for those who actually go onto college, but they're clearly so not ready for so much else about life that will be facing them soon. Of course telling everyone that we're preparing kids for college is very politic, i.e. it feels good for a lot of parents and maybe some of the kids, but the reality is that a significant percentage of these kids aren't realistic college material. Moreover, while our school will proudly boast that 90% or better of our students will go to college, the reality is that if our school meets the general national trend only about 50% will stay the course through graduation. Of course few if any schools will tell you how many of their graduated students will actually graduate from college inasmuch as their job was only to prepare them, i.e. get them accepted into college; what happens when they get there is someone else's statistic to worry about, though that bad statistic will in part be written off to how poorly prepared the dropouts were by their high school.

We're ostensibly preparing high school students for college, which is less expensive than preparing them for an equally important aspect of their post-high school lives, i.e. getting them ready to deal with life in a global-centric world and, lo and behold, for their retirement. Both goals should be a part of the curriculum, but truly preparing kids for life in the real world is clearly not as important (at least where I'm at), maybe because there's no immediate metric for measuring it (if it's accountable per NCLB why bother, right?) and far too many parents don't think that such prep is necessary because their little gem is going onto college with the 90% of the rest of his or her graduating class, and will go to an Ivy league school they actually graduate from, and will somehow be taken care of through the high-powered job they finagle after graduating from Harvard Business School, or maybe it's the medical school, or ... well, something like that. But then maybe it's not just cost-effectiveness and parental self-deception, indeed, how many of us are really in a position to teach personal fiscal responsibility and preparedness? We're a society with an extraordinary debt load and one that loves to live on its credit card, which is paid off by and large in expensive installments, but then that may be due to the fact most of today's teachers never got any real fiscal education either.

It's a harsh world out there, and it's becoming increasingly uncertain and user-unfriendly. Job stability is not something to be counted on as it once was, and expecting that somehow you'll be taken care of in retirement, while it was likely never true for the overwhelming majority, whatever truth to it there may have been is greatly diminished now. And what it comes down to is that it definitely seems that we're not preparing kids for what's out there and how to deal with it, but then I have to wonder if we ever really did.