25; 43,800; 93; 65; $117,000; 10; 75-85%; $263,000; 85; 67

During one of our most recent financial aid conferences, there were a variety of sessions and speakers who spoke on different topics and one session’s topic was the what, when and how about retirement. He stated this quote, “The 65 year old you will thank the 25 year old you”. It is NEVER too early to start to save for retirement, no matter how much is set aside. Now is the perfect time to start thinking about it. Look at what the FUTURE payoff would be 30-40 years from now (seems like forever but think about how fast your time here at Yale Law is moving).

What do you think when you hear “retirement”? Are you thinking it is way too far off in the future (regardless of how many years away)? Are you currently planning for it? If not, why? Or when you hear “retirement”, do you picture yourself lying on a beach and watching the waves? Traveling across the country or maybe the world? Buying a vacation home? Regardless of the cost of these things, your retirement funds must be 75-85% of your current salary (at the time of retirement) to continue the life style you were accustomed to.

Would you like to retire at a young age? What age is young to you? Age is really just a number but if one retires at the expected age of 65 and lives to the age of 85, during that twenty year retirement period, that one person will consume 43,800 meals which at today’s prices (2014) would cost $263,000. That is just for food! The average age people are living to is 93.

There are different types of retirement plans to choose from, Individual Retirement Arrangements (IRA) Roth IRAs, 401(k) plans, 403(b) plans, etc., too many list but if interested in the different types and want more clarification, description and rules on each, please go to: http://www.irs.gov/Retirement-Plans/Plan-Sponsor/Types-of-Retirement-Plans-1

For those who were born after 1960 and later, 67 is retirement age and this when you can start the application process to receive social security benefits. Benefits can be applied for at an earlier age, but because you are not at “retirement age” a deduction would be calculated to the benefit. Why would you accept a reduced amount after all of the years of hard work you dedicated to your career? If curious, view the information on the Social Security Administration’s website: www.ssa.gov

The average loan debt of a student who graduated from Yale Law in 2014 was $117,000…hopefully with the help of COAP and your salary…the debt would have long been paid off at retirement, but what if, for whatever reason, it was not? This would be an additional debt taken out of your expected monthly retirement funds.

The Standard 10 Year Repayment Plan…you have heard of this term, correct? If not, at repayment time, this is the most aggressive, standard repayment plan all federal direct loans are automatically placed in (different for private loans). The federal loans have many repayment plans to choose from and it would be best to contact your servicer well in-advance of repayment to discuss the ideal plan that best suits your needs and budget.

It is so much information (and lots more that has not been inputted), so where do you start? Well…..this spring, the Financial Aid Office is holding five information sessions that cover loan repayment, COAP, Consolidating & Refinancing and new this spring, a session focused on financial protection strategies (aka “insurance”) for everyday living (cannot be missed). All very informative and if you learn one thing from each session or just one thing from all five sessions combined, then you will be that much more prepared for the future!

February 11th – Loan Repayment Strategies: Pick Your Plan
March 9th – Coping through COAP – Part I
March 11th – COAP in Action – Part II
March 25th – Let’s Make a Deal…Consolidating and Refinancing of Student Loans
April 1st – The Model for Financial Success with John Caserta

Reminders will be sent before each scheduled session…please stay tuned.