3 Things 2-2-26

Thing One

To Save or Not to Save (When You’re Young)

There’s an old saying often attributed to former British Prime Minister Harold Macmillan:

"There’s no fool like an old fool—except a young fool. The young fool just hasn’t lived long enough yet to realize it."

It’s blunt, but it’s also remarkably accurate—especially when it comes to money.

Every generation seems to rediscover the same idea: that youth is for living, not planning. Saving can wait. Retirement is decades away. Life is happening now. And to be fair, there’s some truth there. Your 20s should be enjoyed. Experiences matter. Memories matter.

What usually gets left out of the conversation is math.

From time to time, an article or viral post pops up arguing that young people shouldn’t worry about saving yet—that focusing on retirement too early somehow cheapens life. The underlying message is simple: spend freely now, because you’ll have plenty of time later to get serious.

That logic feels good in your 20s. It feels much different in your 50s.

Many people in midlife can tell you exactly when they first brushed off the idea of saving. The first job. The first paycheck. The first opportunity to open a retirement account—and the instant decision not to. Retirement felt abstract. Rent, travel, food, and fun felt real.

Fast-forward a few decades, and that “later” everyone assumed would be easy suddenly arrives with urgency. Saving becomes harder. Life is more expensive. Time—your most valuable financial asset—is suddenly in short supply.

This isn’t about regret. It’s about understanding trade-offs.

Here’s where the math becomes impossible to ignore.

If someone starts working at age 22 and saves $3,000 per year until age 65, earning a reasonable long-term average return of 7%, they would end up with roughly $826,000. Over those 43 years, they would have contributed just $129,000 of their own money. The rest comes from compounding—money earning money, year after year.

Now change only one thing: delay saving for 10 years.

Start at age 32 instead, save the same $3,000 per year, and the total at age 65 drops to about $388,000—less than half the result. To catch up and reach the same $826,000, that person would need to save roughly $6,400 per year, every year, for the rest of their working life.

Wait until age 42? The required annual savings jumps to roughly $14,500 per year just to land in the same place.

Same destination. Very different journeys.

The takeaway isn’t that young people should stop having fun or live like monks. It’s that saving early doesn’t require huge sacrifices—and waiting later demands them.

There’s also an irony here that only time reveals. The version of “fun” in your 20s is often expensive and fleeting. Over time, people tend to get better at enjoying life in simpler, more meaningful ways—travel that’s intentional, experiences that are richer, moments that don’t require constant spending. That kind of freedom is much easier to enjoy when financial stress isn’t tagging along.

Saving when you’re young isn’t about denying yourself life. It’s about buying flexibility for future you—the ability to work less, worry less, and enjoy more when time actually becomes precious.

Growing older is inevitable. Growing up financially is optional—but the math doesn’t care which you choose.

And that’s the part worth remembering. 

Thing Two  

Planning Around Social Security and Medicare: What Pre-Retirees Should Know

For Americans approaching retirement, Social Security and Medicare remain essential cornerstones of the plan—but the way they fit into retirement is changing. As more people retire and live longer, enrollment continues to rise. Today, about 67 million Americans receive Social Security benefits, and roughly 66 million rely on Medicare for healthcare coverage. Those numbers will continue to grow throughout the next decade.

Current projections suggest Social Security’s trust reserves may be depleted around 2034, with Medicare’s Hospital Insurance Trust Fund facing shortfalls in the early 2030s. These dates can sound alarming, but they don’t mean benefits stop. Even if no legislative changes are made, payroll taxes would continue to fund roughly 75–80% of scheduled benefits.

For pre-retirees, that distinction matters. If you’re planning on $2,200 per month from Social Security, ongoing revenues could support roughly $1,650–$1,760. A projected $3,000 monthly benefit might come in closer to $2,250–$2,400. Social Security would still provide meaningful income—but relying on it for the majority of retirement cash flow could feel very different than expected.

Medicare would continue as well, but likely with gradual changes. Higher premiums for higher-income households, expanded income-related surcharges, and increased out-of-pocket costs are all realistic possibilities. For those nearing retirement, healthcare planning matters just as much as income planning—especially during the years leading up to Medicare eligibility and again once coverage begins.

The driving force behind these shifts is demographics. In 1960, about five workers supported each Social Security beneficiary. Today, that ratio is closer to three-to-one, and by the mid-2030s it is projected to approach two-to-one. At the same time, many retirees will spend 20 to 30 years in retirement, drawing benefits longer than any previous generation.

The encouraging news is that these challenges are manageable. Modest, phased-in adjustments—such as changes to payroll tax caps, benefit formulas for higher earners, or retirement age thresholds for younger workers—can materially improve long-term sustainability. Historically, reforms enacted early have helped protect those closest to retirement from major disruption.

For today’s pre-retirees, the takeaway is preparation, not concern. Social Security and Medicare are likely to remain important foundations, but they work best when paired with personal savings, tax-efficient withdrawal strategies, and flexible retirement timing.

Consider two households with identical Social Security benefits. One plans for Social Security to cover 70% of retirement income; the other plans for 40%. A future benefit adjustment affects both—but only one has meaningful flexibility. The difference isn’t income. It’s planning.

Social Security and Medicare aren’t disappearing—but they are evolving. Thoughtful planning today can turn uncertainty into confidence and help ensure these programs support your retirement rather than define its limits.

If you’re within 10–15 years of retirement, now is a good time to review how Social Security and Medicare fit into your broader plan—and whether your income strategy is flexible enough to adapt as these programs change. 

Thing Three

Just A Thought  

“Dream big. Start small. Act now.” — Robin Sharma