Most Millennials Have an Unrealistic View of Their Retirement Prospects, Analysts Say (hsbc.com)

From a blog post on research firm HSBC: HSBC calls for millennials to wake up to living and working longer, as research finds only 1 in 10 expects to work past 65. Most millennials have an unrealistic view of their retirement prospects according to a new report from HSBC. The latest report in The Future of Retirement series, Shifting sands, finds that on average millennials expect to retire younger than other working age generations. Millennials expect to retire at 59, two years younger than the working age average of 61. The survey of over 18,000 people in 16 countries finds that only 10 percent of millennials expect to continue working after 65 -- even as their generation faces unprecedented financial pressures and state retirement ages continue to rise around the world. This is despite 59 percent of millennials agreeing they will live much longer and will need to support themselves for longer than previous generations.

Comments

Opposite

[Anonymous Coward]

I was thinking that I won't be able to retire the way things are.

Re:Opposite

[Quirkz]

I hear you. Fresh out of college, I figured I was smart and impressive enough to find a way to retire by 50. Preferably by becoming a world-famous novelist in the next few years, or a dot-com millionaire by the turn of the millennium. Basis: nothing but wishful thinking, and the belief that I sure as hell couldn't keep doing this work crud five days a week for half a century. (Oh yeah, I can also distinctly remember telling my brother, "I really think I'm meant to win the lottery. I know the odds are against it, but it should happen to me.")

By 35, married, dual income, no kids, I had a plan, based on actual, mathematical evidence (if with some optimistic assumptions) that I could retire at 60, with a paid-off house and a decent retirement fund.

In my mid-forties with kids and a spouse that stays home, past one really terrible financial mistake with a house, plus several minor financial setbacks at work, I'm now looking at 65, more likely. I still have my doubts about the sanity or feasibility of doing this work crud five days a week for a few decades, but at least I've now worked almost half of the mandatory time, so there's that.

Re:Opposite

[Anonymous Coward]

Do not EVER marry someone who makes less money than you. Doesn't matter your gender. If you marry down, you will pay way more than you expect (or can afford) when the inevitable divorce occurs. Marriage has become little more than a money-stealing scam in the modern day...be the scammer or be gone.

If your spouse stops working, divorce immediately. You will be on the hook for a heaping pile of cash otherwise.

Do not EVER have kids. Yes, I know the human race needs kids in order to survive. Fine, if they are so important, the government can re-arrange things so that child-rearing is affordable. Until then, breeding is a road straight to poverty.

It's cynical, I know. But it's a natural enough response to the reality we face. If you want to retire someday, then look inside for fulfillment and eschew sex and romance.

The view fails to account getting &*#@ed

[sinij]

This view is unrealistic because it fails to account getting &*#@ed by boomers both with national debt, student debt, globalization suppressing wages, and lack of opportunities due to boomers working past retirement.

Re:The view fails to account getting &*#@ed

[Maxo-Texas]

As a boomer, when i went to college, it was $180 a semester. Even adjusted for inflation that's a fraction of the cost today.

Tuitions went up enormously when the law was changed to allow loans not forgiven by bankruptcy.

Boomers are running about 10 years behind my age for every major landmark.

That being said- save hard, don't pamper yourself with eating out and starbucks and you can still retire years earlier.

Re:The view fails to account getting &*#@ed

[msauve]

It's the ready availability of grants and below market student loans which drove the above market increases in tuition. Unintended consequences and all that...

Re:The view fails to account getting &*#@ed

[Rockoon]

Thats not the cause... thats the symptom.

In every place the government has encouraged loans, prices have bubbled drastically, for instance in both housing and education.

The outcome of these things is predictable and indeed has been repeatedly predicted. The reasons that were given for not doing these "progressive" programs have literally come true, but the progressives didnt listen and still will not listen.

Re:The view fails to account getting &*#@ed

[Maxo-Texas]

And the lack of bankruptcy means the banks would loan unreasonable amounts of money to 18 year olds who had no clue how much pain they were signing up for.

If the bankruptcy was removed, loans would drop, and so would tuition.

Grants are a factor but they were tiny amounts of money compared to student loans.

Re:The view fails to account getting &*#@ed

[monkeyxpress]

That being said- save hard, don't pamper yourself with eating out and starbucks and you can still retire years earlier.

That's funny, because I have just spent the last few years learning how not to do that. I worked really hard (graduated at a young age), and just saved for about 10 years. I paid down debt and put my money into what I thought were safe investments, and pretty much did nothing fun for that time. I barely ate out, I had one beer a month on average, I had a $1500 car that I kept going by spending weekends fixing it.

However, the one thing I didn't do was buy a house. So in that time, I saw people who took out what I thought were irresponsible mortgage becoming stupidly wealthy, while drawing down their newfound equity and living life to the full. Meanwhile the purchasing value of my savings has become a joke, rents and expenses went up (regardless of what the govt says inflation is) and I basically just try not to think about all the opportunity cost of squirrelling money for so many years.

I keep enough to live off for about 2 years now, and just try to work my way through a list of life experiences. Part of me still really wants to save, but I beat that part back by reflecting on how much of life I missed out on because I was apparently 'doing all the right things'.

Until the housing bubble sorts itself out, I think saving is a waste of time. You will lose it all anyway when govt needs to bail out all the people who took on too much debt (which is the other side of your savings). Until then, the best 'savings' a millennial can make right now is keeping their career in good order and skills sharp. It will get really tough when the next recession hits, but if you didn't have any money to lose, and can do something useful, history suggests you'll be able to muddle through to better times.

I don't think they actually talked to any of them.

[bistromath007]

Millenials don't expect to work past 65 because they'd be surprised if they make it past 50 without committing suicide.

Who did they talk to?

[Anonymous Coward]

I have never met someone below the age of 30 that thought they had a chance of retiring at all. The majority expects Social Security to be gone, they have never seen a job with a pension, and they just lived the prime of their lives through the economic recession shattering both 401k investments and realestate.

Millenials are keenly aware of how screwed they are.

Re:Who did they talk to?

[Anonymous Coward]

You need to get yourself a better financial advisor.

Save 30%, retire early

[Moof123]

Seriously, the math is not hard. Live a simple life that concentrates on happiness instead of stuff, and make saving a healthy percentage of your income. You will be financially independent and have the option to retire well before 50.

Or you can choose to save 10% or less, inflate your lifestyle at every raise and work until you are 70+. More likely you will get laid off in your 50's and have to "retire" badly when all you can find is low wage jobs.

Re:Save 30%, retire early

[Anonymous Coward]

Your simple plan is dependent on having above average salary, not getting sick and no close family member getting sick. Low salary forces you into simple life and you still wont save all that much. It is kinda hard when cheap rent in bad district eats all money you earn. It is hard to concentrate on happiness when you drive almost hour and half each day to get home after long hours.

Math is easy, it is just that economy does not guarantee everyone well paid job you can easily save from.

Re:Save 30%, retire early

[ColdWetDog]

Actually, it's hardly that simple. While you espouse a perfectly reasonable plan, there are lots of things that can get in your way. That job that concentrates on happiness (whatever that is) just laid you off. You run through your savings in 9 months looking for another job. Then your wife comes down with breast cancer.

I see this stuff all of the time. It's not just American Hedonism that is going to screw the Millenials - it's hedonism, no safety net and an economy run by those nice people that brought you 2008. If you're of the Buddhist persuasion then you can sigh, work some more on your karma and hope next time you get reincarnated as a housefly. The rest of us just get depressed.

Re:Save 30%, retire early

[jeff4747]

You forgot to include a few steps:

-Be lucky enough to never face a serious health issue.
-Be lucky enough to never be unemployed for an extended period of time due to forces beyond your control.
-Have zero family or friends that failed the previous two steps. Or even better, zero family or friends.

Re:Save 30%, retire early

[Moof123]

Saving crap piles of money makes dealing with ALL of those issues much easier, they are not reasons to avoid savings. Money in the bank gives you options if you get sick, or family has a disaster. Living paycheck to paycheck makes minor medical or job problems an instant emergency. Not being able to keep your job because you get sick without large savings can be quickly ruinous.

Becoming financially independent and retiring early gives you more time to cook healthy food and exercise more, not to mention huge reductions health destroying stress. Chances of major illnesses can be reduced greatly as a result.

I've already been through a year long unemployment episode, and never want to be at the whim of an employer for my livelihood again.

Retirement is unreealistic, period

[damn_registrars]

For the overwhelming majority of people in this country, retirement plans will be best summarized as "hope to die at work". Few people are making enough money beyond their needs to be able to save money towards retirement.

X has unrealistic expectations about Y

[imgod2u]

In other news, I hear a bunch of buggy makers expect to be able to pass their trade down to their grandson.

Or coal miners expecting a boom in coal consumption.

Or unskilled laborers expecting those pesky computers and robots to disappear someday.

Or Americans expecting to work less, produce less but get paid more than the other 80% of humanity forever and ever.

Re:X has unrealistic expectations about Y

[bistromath007]

That's a really unfair thing to say about American workers. We certainly produce less, but we work way more than most. We're the undisputed kings of wasting effort.

So they're only very slightly optomistic?

[rhazz]

Millennials expect to retire at 59, two years younger than the working age average of 61

So they're only slightly more optimistic than actual stats would play out? I bet that's par for the course for any generation when they were still 20 years out from retirement.

Re:Unrealistic for you, maybe

[cayenne8]

They don't expect to live past 65, given the state of healthcare in this country.

Sheesh...quit whining.

People lived well past 65 in years past with less healthcare and tech than we have today.

Actually a LOT of health is up to the people themselves.

Eat right...exercise regularly, don't smoke....and only do fun chemicals in moderation if you must, and you'll be well on your way to a long healthy life, barring any catastrophic happenings, like getting hit by a bus.

THAT is actually what insurance is supposed to be, only for catastrophic, unexpected health occurrences. If you lived healthy, and if they would encourage HSA's and the like for the routine medical care you need...insurance for catastrophic events would be MUCH cheaper, and most all health care prices would go down. We used to have a system like that when I was a kid, insurance then was called "Major Medical", and it wasn't sky high. Insurance is for accidents, not routine maintenance. Its that way for your car, it should be that way for you too.

Re:jail / prison has better healthcare then the ER

[ColdWetDog]

No, it doesn't. It's a popular meme around here but completely untrue. In jail, they will offer you some base level of care for serious problems but prison officials get to determine how serious it is and if it gets treated. Jail providers tend not to be on the right side of the bell curve, so even if you get to see the doc or midlevel, you may end wishing you hadn't.

If you need to be treated for a psychiatric illness, your choice of medicine will be significantly limited since many of those drugs can make you feel good (and thus have a marketable value in jail and are heavily restricted. If you hurt, well, too fucking bad. You get a tylenol or, if you're very lucky a tylenol and an ibuprofen.

The major downside of going to the ER for care is that the guy next to you might be strapped down to the gurney and being rather vocal about it. He's the one that got the bill from the last time he was in the ER.

Re:Unrealistic for you, maybe

[Altus]

If "provide for the common defense" can be used to justify spending as much on the military as the next 10 countries combined then perhaps "promote the general Welfare" might be considered to include keeping the citizens of the country healthy.

Re:Unrealistic for you, maybe

[peragrin]

The problem is routine medical not subsidized is several hundred dollars a visit. Times a wife and two kids and you are talking about thousands annually.

Women have been giving birth since the dawn of mankind. Yet now the average child birth costs $30,000.00

Something where the doctors do little but monitor costs more than a car. Now I would rather have a doctor monitoring the situation as a lot can go wrong quickly, but that's a lot of money for just in case.

Health care expenses are so far out of whack it isn't funny. The whole industry is out of whack and keeps pushing itself farther away.

Re:Unrealistic for you, maybe

[cayenne8]

The problem is routine medical not subsidized is several hundred dollars a visit. Times a wife and two kids and you are talking about thousands annually.

Hmm..really?

I mean annual check up for family of 4..say at $200 each would be about $800. Now with kids if they get sick a couple times a year, add another $800 maybe....so, $1600 a year for routine health is too much to expect a family to save for?

And..if we did what I was saying and go back to where insurance is only major medical, catastrophic insurance, people would be shopping around for Dr.s and not have middle men HMO's and the like....medicine was MUCH cheaper for routine care 30-40 years ago, even if you count for inflation. It is all the insurance covers everything and HMO's that drove the prices up.

Right now, one of the things that is trending, is groups of doctors that cover full range of the human anatomy are banding together and selling shares in health club type thing...you pay x annually and you're covered for most of your health needs.

If this type thing were allowed to grow, it might solve a LOT of the problems for routine care.

Re:Unrealistic for you, maybe

[XXongo]

You're all hot to point out that the Constitution requires the government to provide for the common defense. But you seem to want to gloss right over the promote the general welfare part. Why is that, do you suppose?

See my other post in this thread about the General Welfare clause. You have to take that as it was meant when written...it means more of the welfare of the UNION of the states, and the ability of the Feds to lay taxation for that purpose.

No, it doesn't.

Where the hell do you get these bullshit interpretations?

The meaning of the "welfare" in 1787 meant health and prosperity. Of the people. You know, that "we the people" thing? People.

Re:Unrealistic for you, maybe

[dywolf]

Well, that provide for general welfare, has to be taken in the meaning of the day, not as "welfare" as we think of it today. Basically general welfare as used in the constitution was defined as the overall state of wellbeing of the nation as a whole.

Then so does "provide for the defense", which "in the meaning of the day" most certainly DID NOT mean the permanent standing military of the size and scope that we have today.

Basically your argument is shit.