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Retirement Chat with Eric Medrano

Young Invincibles recognizes the importance of planning for the future and having a retirement savings account. In California, for example, we’re supportive of programs like CalSavers that make it easy and accessible for young people to have access to a workplace retirement savings program and the peace of mind of feeling financially prepared for the future. We asked some young Californians what they thought of retirement and what their plans looked like. Here’s what the Bay Area’s Eric Medrano had to say:

Have you thought about retirement yet?

Yeah, I started thinking about retirement because of my family’s circumstance. I looked at my father a few years ago and saw that he’s already in retirement age but has nothing to fall back on. He has worked as an independent contractor, meaning he does not receive any benefits nor has he received any benefits for the past 10 plus years or so. This, along with the culture he grew up with, of working hard and spending it, not saving it, has led to his current circumstance, and by default, my family’s circumstance. That made me think about my own retirement plan. I don’t want to end up without any retirement funds to fall back on or having to rely on my family for financial support.

In my family of six, we’ve had to talk about who’s able to work and support others. I know since I’m about to work full time, I’ll probably have to step up and support my father financially. It feels like a lot to take on, but I want to contribute because I love my father. 

I also have to start paying back my student loans and deal with issues like flooding in our basement and other expenses. Our home in Oakland has undergone a few floods in the basement during heavy rains, caused in part by next door city development of a storm drain running alongside our basement. This has racked up the already high cost of living in the Bay Area for my family and me. We’ve had to deal with the floods while my father has struggled to provide for the family with an unstable source of income as a private contractor. All these concerns and responsibilities have made me think about retirement. That’s why a year and a half ago, I opened a 10-year CD with my older sister. It’s our back-up plan and I refer to it as part of my retirement fund because I had to use my previous retirement fund for an emergency, namely the flooding in our basement.

When you hear “retirement,” what comes to mind?

The first thought that comes to mind is my father and his situation. The reality that he does not have a retirement fund, or any funds at all, to sustain himself. I also think of my mother who does have a retirement fund because she’s been working for over 25 years as a housekeeper.

When you hear “planning for the future,” what comes to mind?

I think about how I’m going to create more than one source of income for myself. Also, how I’m going to create multiple savings accounts for different purposes. For example, I know I’ll need a rainy-day fund, but also a fund dedicated to buying a house or paying off my loans. Moreover, I just never think of only me — I also think of my family and what I’ll need to do to plan for them too. 

What are your thoughts on Cal Savers?

When I think about Cal Savers and remember what they provide to people without a retirement plan, I definitely feel supportive about the program. I like the idea that there can be several retirement plans to pick and choose from and that’s one of the advantages of Cal Savers. Essentially, I think to offer several different retirement plans to choose from makes the market competitive which can provide consumers with better products. 

What advice would you give young people about planning for the future?

Start saving now. The sooner you start the better you’ll be off. Think of the concept of compound interest with savings accounts – the earlier you start saving the more you’ll have saved up in the future regardless of your income. For example, putting in $5,000 into a savings account now could make that compounded sum very useful in the next 20 years. 

Any last thoughts?

From my experience as someone in the Latino community and being raised in a Latino family, I would say planning for the future is hard for our community. The way our culture operates is sort of like work hard, make money, and pay for what needs to be paid now, we didn’t necessarily think about planning for the next 10, 15, or 20 years. It’s a lot harder for us to save with the little left over after paying other necessary expenses. Lastly, the concepts of retirement and savings intersect with student debt and health care because they all affect each other one way or another and that’s something to consider as you plan for the future.

Eric Medrano is the son of Salvadoran immigrants, who fled their home country during the Salvadoran Civil War and is now working in economic and business development in the Bay Area in hopes of providing a thriving future his parents envisioned for him.