Slashdot Mirror

← Back to Stories (view on slashdot.org)

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

Posted by msmash on from the troubling-pattern dept.

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.

29 of 557 comments (clear)

  1. Opposite by Anonymous Coward · · Score: 5, Insightful

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

    1. Re:Opposite by Austerity+Empowers · · Score: 4, Interesting

      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.

    2. Re:Opposite by Rosco+P.+Coltrane · · Score: 5, Interesting

      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
    3. Re:Opposite by butchersong · · Score: 4, Funny

      I plan on having several kids -like 6 or so. If I influence each of their malleable little minds just right for the first 18 yrs I'll be able to guilt em into providing me 15% of their monthly income. I might even luck out and one of them will actually land a cushy job giving me a nice bump in lifestyle.

    4. Re:Opposite by Quirkz · · Score: 4, Insightful

      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.

      --
      The Quirkz Handbook of Self-Improvement for People Who Are Already Pretty Okay
  2. Unrealistic for you, maybe by Anonymous Coward · · Score: 5, Funny

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

    1. Re:Unrealistic for you, maybe by Anonymous Coward · · Score: 5, Informative

      The US Govt (at least on the Federal level) is mandated by the US Constitution to provide for defense...that is one of its few enumerated responsibilities and powers.

      I don't really think it is anywhere in the constitution for the government (at least on the federal level) to provide healthcare for the citizens, at least not without a constitutional amendment.

      I find it interesting you say that. Comments about providing for/promoting the "general Welfare" literally appears in the same sentence as "provide for the common defence" in the taxing and spending clause, and in the preamble of the Constitution.

    2. Re:Unrealistic for you, maybe by Altus · · Score: 5, Insightful

      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.

      --

      "In America, first you get the sugar, then you get the power, then you get the women..." -H. Simpson

    3. Re:Unrealistic for you, maybe by darthsilun · · Score: 4, Interesting

      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...

    4. Re:Unrealistic for you, maybe by XXongo · · Score: 5, Insightful

      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.

    5. Re:Unrealistic for you, maybe by darthsilun · · Score: 4, Informative

      You have to take that as it was meant when written...it means more of the welfare of the UNION of the states

      SCOTUS doesn't agree with you, AFAICT
      See U.S. v Butler, 1936

      But it doesn't mean "welfare" in the same way that people in this century try to translate it.

      If by "welfare" you mean the (((Entitlement))) part of Social Security? No, I I'm not aware that anyone in this exchange is translating it that way. Excepting perhaps you?

    6. Re:Unrealistic for you, maybe by dywolf · · Score: 5, Insightful

      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.

      --
      The guy who said the election was rigged won the presidency with the second-most votes.
  3. The view fails to account getting &*#@ed by sinij · · Score: 4, Insightful

    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.

    1. Re:The view fails to account getting &*#@ed by Maxo-Texas · · Score: 5, Insightful

      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.

      --
      She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
    2. Re:The view fails to account getting &*#@ed by Maxo-Texas · · Score: 5, Insightful

      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.

      --
      She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
    3. Re:The view fails to account getting &*#@ed by monkeyxpress · · Score: 4, Insightful

      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.

    4. Re:The view fails to account getting &*#@ed by Solandri · · Score: 4, Informative

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

      Here's a chart of historical tuitions (inflation-adjusted). The change in student loan bankruptcy law was in 2005.

      • From 1994-95 to 2004-05, the average tuition rose from $13,069 to $17,030. An increase of 30.3%, or an annual average of 2.68%.
      • From 2004-05 to 2014-15, the average tuition rose from $17,030 to $21,728. An increase ot 27.6%, or an annual average of 2.47%.
      • Even if you remove the transition years (2004-05 and 2005-06), the increase was 2.34% per year before 2005, 1.93% per year after 2005.

      So contrary to your claim, the rate at which tuitions were climbing actually slowed down after it was made virtually impossible to discharge student loan debt via bankruptcy.

      It was the widespread availability of loans and grants, starting way back after WWII with the GI Bill, which led to high tuitions. The schools simply sopped up that extra money by increasing their tuition. The change to bankruptcy law, while a cute theory, had nothing to do with it, according to numerical evidence.

  4. I don't think they actually talked to any of them. by bistromath007 · · Score: 5, Insightful

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

  5. Who did they talk to? by Anonymous Coward · · Score: 5, Insightful

    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.

    1. Re:Who did they talk to? by amiga3D · · Score: 4, Interesting

      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.

  6. Retirement is unreealistic, period by damn_registrars · · Score: 4, Insightful

    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.

    --
    Damn_registrars has no butt-hole. Damn_registrars has no use for a butt-hole.
  7. So they're only very slightly optomistic? by rhazz · · Score: 5, Insightful

    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.

  8. Re:X has unrealistic expectations about Y by bistromath007 · · Score: 4, Insightful

    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.

  9. And HSBC is a honest broker here by voislav98 · · Score: 5, Informative

    The "research" comes from the bank that would like you to be more "responsible" with your money, like giving it to them. This is a bank that has paid billions of dollars in fines over the last five years for money laundering and interest rate rigging. The key statement form the report: "Despite the apparent ‘reality gap’ in Millennials’ retirement expectations, most (68%) have started saving for retirement, at an average age of 26. Millennials are also more likely than other generations to take investment risks to boost their retirement saving..."

    So it's not that the millennials are unrealistic, they are saving a plenty, it's that the Fed and other national banks are keeping the interest rates artificially low to boost asset prices and prop up failing mega-banks including HSBC. So please HSBC, tell me more about how I need to "save" more for the retirement so that the government can bail you and your ilk out again when you blow up the economy with asset bubbles.

  10. Re:jail / prison has better healthcare then the ER by ColdWetDog · · Score: 4, Insightful

    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.

    --
    Faster! Faster! Faster would be better!
  11. Re:Save 30%, retire early by Anonymous Coward · · Score: 4, Insightful

    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.

  12. Re:Save 30%, retire early by ColdWetDog · · Score: 5, Insightful

    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.

    --
    Faster! Faster! Faster would be better!
  13. Re:Save 30%, retire early by jeff4747 · · Score: 5, Insightful

    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.

  14. Re:Save 30%, retire early by virtig01 · · Score: 4, Interesting

    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.