I’m Gen Z: Here’s My Biggest Fear About Retirement (and an Expert Solution)
Written by
Jordan Rosenfeld
Edited by
Gabrielle Olya
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Retirement is a long way off for Gen Zers, born between 1997 and 2012, but some of them are already thinking about it. With threats of Social Security going bankrupt and the potential for vast economic changes to occur between now and then, it’s not unusual for Gen Zers to experience fears around future retirement plans.
For Roger Q, a college student studying biology and history in Minnesota, watching his mother grapple with the challenges and expenses related to an autoimmune disease diagnosis has inspired concerns about his own future healthcare and its related costs.
“My family has a history of autoimmune diseases, so that can be a very big one if we get another random COVID or other fun disease pandemic,” Roger said.
Additionally, some of the medicines used to treat autoimmune disease are hard to get approved by insurance. When Roger is old enough to qualify for Medicare, he’s concerned about whether he’d still qualify for any medications he might need.
In his biology classes, he’s also learned about other types of diseases that can affect you when older. “There’s that lingering fear of something like dementia or Alzheimer’s, a type of disease where it doesn’t really matter what financial layout you have, it’s hard to be prepared,” Roger said.
To help Roger figure out how he might address his fears around healthcare costs in retirement, GOBankingRates spoke with Brian Kuhn, CFP, senior vice president and financial advisor with Wealth Enhancement Group.
Think in 10-Year Increments
While such fears are natural, for Gen Zers like Roger who are looking at a 40-plus-year time frame to retirement, Kuhn urged him not to overly stress because “we don’t know what our world will look like by then. Things like Medicare were an invention of the middle of the last century,” he pointed out.
He recommended thinking in 10-year increments, or even just one step forward, to prepare for the unknown future. “Then you can take more immediate actions. Regardless of how the system of healthcare works in the future, we’re still going to need money. So we still need to save. And whether we’re saving because we’re doing so for a trip or for retirement or just the unknowns of life, the action is the same.”
Hide Money for Your Future Self
Kuhn said that saving for your future retirement is “sort of hiding money from ourselves for the future” and that Gen Zers “can do that in retirement plans or through cash flow, if income allows for it.”
While he acknowledged that saving money, especially if you’re just starting out in your career, can be difficult, even 10 years can make a huge difference in where you are financially.
Work To Maintain Your Health
While some health conditions can change out of a person’s control, Kuhn pointed out that since Roger knows his family’s history, he can at least take steps to maintain his health, thus potentially reducing the costs of healthcare co-pays and out-of-pocket expenses as long as possible.
Research Healthcare Insurance Options
Another step for Roger or other Gen Zers with similar fears is to research the type of healthcare you can access based on employers. For instance, Kuhn said, “Some industries like federal employment or public sector employment allow your health insurance to be carried with you into retirement as opposed to other employment industries.”
In general, learning more about how people obtain health insurance in different industries, especially if you haven’t chosen your career field yet, might provide more options for obtaining healthcare at a reasonable cost.
Don’t Panic About Social Security
While every generation has concerns about Social Security’s viability, and Kuhn said he imagines Gen Z fears that the safety net won’t even exist by the time they retire, he does not think it’s worth panicking about.
“It’s a very popular program, so both sides of the aisle support it. In some form we do believe it will continue to exist,” Kuhn said, adding, “Knowing that or believing that there’s going to be some form of income plus what they’re able to save perhaps can give them some confidence to look out that far into the future.”
However, at the end of the day, Kuhn said, “It’s mostly done by saving a little bit at a time.”
Additionally, Kuhn said that any Gen Zer already thinking about these topics “is ahead of the game.”
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