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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.
Millennials are doomed. They will never retire. Socialism Security and Medicare will both be long gone for them. Pensions at all level (private and public) will be a think of the past (almost there already, except for govmint workers). Automation will have destroyed their livelihoods. And the interest payments on the national debt will have long since forced an austerity program the likes of which would make the Greek blush. Either that or a default.
And climate change, if it's real, will just be the cherry on top.
The Wall Street Journal had a recent article about people who are least concerned about outliving their retirement savings are most likely to be a financial risk. The days of retiring at 65 and dropping dead at 70, which was the reality when Social Security got set up in the 1930's, are long gone..
https://blogs.wsj.com/experts/2017/02/17/the-people-least-concerned-about-outliving-their-savings-may-be-most-at-risk-financially/
The average person will see major recessions and a depression in their lifetime. My late father, who was born in the middle of the Great Depression and seen more than a few recessions, regarded the Great Recession as the Second Great Depression. I've been through the Dot Com Bust and the Great Recession, and I'm preparing for the Trump Recession that will happen in the next few years. This is not as bad as the 19th century where a depression took place every 25 years.
Generation Z (the generation that comes after the Millennials (who were formerly called Generation Y)) is shaping up to be one of the most alert and sensible yet.
Many of them were born after the events of 9/11, so they didn't experience the upbeat times of the 1990s.
Being the children of Generation X, a generation that suffered long and hard thanks to the Boomers and Millennials, they have also been raised with a more realistic and negative outlook on the world.
They're nowhere near as naive and idealistic as the Millennials and the Baby Boomers are.
The Internet has given Generation Z a much broader and realistic perspective of the world around them.
Generation Z is far more grounded than earlier generations, at a much younger age.
They show a conservatism that has only typically developed much, much later on in the lifespan of other generations.
Generation Z doesn't care about political correctness.
They think that the Millennials' emphasis on tolerance, acceptance, and being inclusive is a load of sissy bunk.
They say what they want, and they don't give a damn who it offends. Just look at YouTube comments as an example of this.
They know that paying huge sums of money for useless college degrees is dumb, and they refuse to do it.
The oldest ones are opting to become apprentices instead of going to college, and are learning valuable trades instead of learning about gender studies and leftist nonsense like that.
They see the existing system for what it is, and they feel no need to abide by its conventions.
They don't consider debts racked up by the Boomers and Millennials to be valid. They won't inherit them. They'll just default on them when the time comes.
They don't hold third-worlders in high esteem like the Boomers and Millennials do. They don't want to waste money on foreign aid, and they sure don't want to let any more of them into Western nations.
They aren't idealists like the Baby Boomers are, and they aren't petty snowflakes like the Millennials are.
They're their own generation, and they're not going to put up with the disaster that the Boomers, and to a lesser extent the Millennials, have created.
Generation Z is going to sweep it all into the trash.
While that's all well and good I don't think millennials would be broadly characterized as being personally responsible. That's not to say that they're all irresponsible idiots, but in many ways the rapid scientific and technological process made in the decades prior to their existence have made life much, much easier in the United States and other Western democracies. Life didn't present as much of a demand to be responsible and society didn't go out of its way to realize that we needed to instill those virtues artificially due to their growing absence, so we can hardly be surprised.
I expect that we'll eventually see the pendulum swing the other way. Eventually this is going to start catching up to people and when enough of them start screaming bloody murder we'll collectively figure out what we should have been doing decades ago and start working towards it. Humanity tends not to make smart decisions at the highest levels, and looking back at history we only tend to do things better after having our previous and catastrophic actions blow up in our face so to speak. For example, the way we treated the Axis powers after WWII was markedly different from how Germany was treated after WWI, only because we came to realize that it was a terrible idea and would lead to future war. Now Germany and Japan are economic powerhouses that contribute greatly to the world economy because humanity realized that its better to build the defeated enemies back up instead of leaving hatred to fester.
Healthcare is always going to be tricky though just because at the end of your life (assuming it doesn't abruptly end in such a way that makes medical intervention impossible) everyone is going to wind up ill, run-down, or broken in a way that requires a lot of resources to fix. Historically, people were just okay with that, but modern technology has made it a lot easier to prolong the life of people with conditions that would have left them dead before age 2 in any other time period, and so there's a societal demand to keep on living. Maybe science will figure out a way to make that so cheap that it's no longer a problem to provide it so freely, but right now it's not an easy problem.
In the U.S. it's a particularly large one because as a country we've decided we want a huge military, whereas if we scaled that back we could provide better health coverage, even as unhealthy as we are as a population. But that ties back into the problem of responsibility and we have a society that doesn't view their health as their own concern, but rather someone else's responsibility to fix when it invariably fails. I'm sure a government system could be created to incentivize people to take better care of their own health, but I'm not sure the people would collectively vote for it. Humanity hasn't quite hit the necessary rock bottom in terms of what modernization does to health yet in order for us to go down the right path.
I was thinking that I won't be able to retire the way things are.
Nor I. But when I was 25 I thought I would retire at 55 (and actually all things remaining equal, my plan and habits would have enabled it). But all things do not remain equal. Unexpected, previously undesirable and sometimes unforeseeable things happen in life: wives, children, crashing economies, jobs constantly being shifted overseas, etc.
I guess this aspect of millennial thinking isn't new or scary. As with all of us, life will grind away hopes and dreams, no action is required from us.
I just retired at age 57. I bought my own home and even though I'm not rolling in dough I don't have to work to live. No house payment and if I make it to 62 I can expect around 2K more per month which will set me up pretty nice. I spent a lifetime working in avionics with a 60K yearly income at retirement. I still expect to work but no longer at a daily grind kind of pace. I look to do projects and temp work just to make play money. Not bad for a high school education.
Exactly.
I'm a gen X'er and I *know* I won't have a pension. Even if I retire, the government or the pension providers will default on me - either through inflation, or just because the damn pension providers will flatly announce they just don't have anything left in their coffers. I know this because they've already done it to my dad, who was born in the silent generation. So it's nothing new, but it sure won't get no better.
So, I'm not putting any money in a system that'll shaft me and I'm not saving anything for old age - most likely I'll be working until I die anyway.
What I do instead is, I enjoy as much free time now while I'm still young: I found me one of the last "old-style" jobs still available that lets me work 36 hrs/week with unreasonably great pay, in a heavily unionized old company that does business in a market that doesn't know the word recession.
In other words, I've maximized my salary/work ratio and I do as little work as possible to enjoy life the the fullest while I'm still in a condition to enjoy it. Time enough when I'm old and decrepit to kill myself at work for a living.
"A door is what a dog is perpetually on the wrong side of" - Ogden Nash
Granted those happen- but buying too much house, eating out too much, buying too much car, traveling too much, buying clothing that's too nice, drinking after work, starbucks, and many other activities enjoyed by the young do not help.
I lived on half I made and saved the rest from 1987 onwards. I retired 16 years early.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
unless they were very, very wealthy. Also, google the phrase "infant mortality" sometime while you're at it. Or spare a thought to the 45,000 people who die unnecessarily every year because they don't have access to health care. Health care that we could easily afford if but choose not to because freedom. The freedom to die sounds great when you're not the one doing the dying.
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Ho hum, that old line of reasoning.
Nobody is suggesting that the military go away. GP said "scaled ... back" Heck, before WWII we had a much smaller military. The Constitution doesn't require military spending to be 1%, 3% or 10% of GDP. Specifically it says "provide for the common defense." BTW, in the very same sentence it also says "promote the general welfare." So far we have interpreted "common defense" to mean "have a standing army." But you know what? Excluding WWI and WWII, up until WWII our military spending was < 1% of gross GDP[1]. Now it's over 3%, and Twitler wants to double it. Do we really need to double it? Opinions are nice, but objectivity is better.
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?
And if we the people want it, it seems to me that the government can solve the affordable health care problem. No Constitutional Amendment required/ We already do lots of other things under the banner of promoting the general welfare, e.g. seatbelt and airbags in cars, safe food, clean air and water, etc., etc. (and Science, bitches.)
OTOH you know what isn't in the Constitution? There's nothing in it that guarantees that every business will succeed. While Conservitards everywhere are obsessing over the possibility that some theoretical welfare queens somewhere (that typically don't actually exist) are bilking the government for millions, Corporate Welfare Queens are getting tax breaks and using bookkeeping tricks to avoid paying taxes they owe on billions in income. Talk about not seeing the forest for the trees. Oh, and those Corporate Welfare Queens are people too, thanks to Citizens United, so they can donate huge sums of money to the very same Congress Critters who give them those tax cuts, bookkeeping dodges, and "people" status. Something's fishy in Denmark if you ask me. (And hey, I'm a person too, I want that same 15% tax rate that Twitler wants to give them.)
But yeah, keep whining about health care not being in the Constitution. The ACA didn't give health care to anyone. It required the freeloaders who weren't buying insurance and driving the rest of our rates up to be adults and finally buy insurance. Maybe you didn't like the subsidies that the poor got, is that what your gripe was? Let me ask you, do you call yourself a Christian? Ask yourself, would Jesus have helped the poor? Should he have helped the poor? Would he have wanted you to help the poor? Is there a reason you don't think the poor should get help with buying the insurance they need? And want to buy?
[1] http://www.usgovernmentspendin...
Name a generation that wasn't fucked in some way. Stop being so fucking spiteful just because someone might have had it a little better/different than you.
Name a single generation that didn't have to worry about economics.
God forbid after the worst war humans have ever seen there was relative peace and prosperity. Damn their parents for making kids after coming back from war. Damn those kids for daring to be born and having different life circumstances that molded their outlook, just like you.
What the fuck is with the spite these days for prior generations? Your life isn't perfect? Big deal, no one has a perfect life.
Student debt is correlated to higher availability to university education. Are you saying that college education shouldn't be available to everyone to reduce costs via supply restrictions? Just because there are different ideas to fund it doesn't mean it was for the sole purpose of fucking over a generation. Hell I am one of those fucked by student loans. Yet, I am not going to blame the boomers or any other generation for my life circumstances and choices. Because student loan debt is a choice.
How does being spiteful help you get a job? Get a retirement? Get a house? Be fiscally responsible?.
I am sure you have all the answers how to solve all the economic problems while able to convince everyone you have those answers. Name a generation that didn't have to try and solve these kind of problems.
The stage is the same with different actors. Big fucking deal.
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.
The plan you're criticizing depends upon saving a percentage of income. It doesn't require an above-average salary. If you save 10% of income, you're buying a year of spending every 9 years (assuming 0% inflation and 0% rate of return). If you save 25%, you're buying 1 year of spending every 3 years. Percentages don't care if you're bringing in $100k or $50k.
Savings rate is the most important number. A lot of people chase the income number, not accounting for the cost of attaining that income. This includes commute time and stress, which translates into health cost.
Most middle class people won't retire in their 50s not because it's impossible, but because their savings rate is out-of-whack. If you optimize for Problem A, don't expect a solution to Problem B.
Couldn't agree more, except I'd say don't get married ever. I married someone that I'd literally grown up with and we'd been dating for 8+ years. If ever I thought I knew and could trust someone it was her. Plus, she was a fellow engineer and made roughly the same, if not a bit more.
She had a midlife crises, flipped out and we split. Even with a relatively amicable split, I still had to write her the $100k check on my thirtieth birthday because I kept the house. Nevermind it was largely my reserves that paid for it in the first place...
That said, I made a couple very cool career and investment moves in my thirties and have recovered nicely. I'm now in my forties, financially comfy and on track to retire before I hit fifty. I have a girlfriend who has her own life, place, and income, and we're quite happy not placing each other's financial future at risk.
Just don't get married. Ever. It's a racket and a scam and statistically, you're not going to come out a winner.