What is the endgame for Millennials?

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Darth Xanadu
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What is the endgame for Millennials?

Post by Darth Xanadu »

This recent study (https://www.nirsonline.org/reports/mill ... ing-short/) offers sobering (but not necessarily "new") insight into the lack of early/active participation in retirement saving for the Millennial generation. Two-thirds of this cohort have nothing...zero...saved for retirement. I think we can all fathom some of the reasons why, and some are also discussed in the linked study.

But with pensions vanishing as an option, life expectancy approaching 90, and grandparents/parents assets possibly being consumed by long-term care and general living ... how will this generation pay for living expenses after working? Social Security is likely to be available. Working longer is certainly in the cards. Perhaps as Gen Xers retire, better (higher-paying) opportunities will open up and allow for ramped-up savings during peak earning years.

I'm curious what you all think of this. What do you think the financial/retirement landscape will look like for Millennials when they hit their 60s and 70s?
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Re: What is the endgame for Millennials?

Post by smitcat »

Simple - they will continue to work until the time that they have enough to retire.
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Re: What is the endgame for Millennials?

Post by livesoft »

I think that pensions vanishing is good for Millennials. The reason is that pensions die with their parents, but if their parents had 401(k)s, 403(b)s, IRAs, then they will inherit quite a bit of money.
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Re: What is the endgame for Millennials?

Post by pokebowl »

Not sure how recent this study really was. Looking at the study samples, unless I am mistaken they used pre 2014 up to 2014 data for this study? While no real year limit is officially defined for what makes up a "millennial", using pew research in 2014 the oldest millennial per pew's definition would be a little over 33 years of age. Given the young age of millennials when this data was pulled, tends in my opinion to shine some light on the findings. With a majority in their teens to twenty something, it would make sense for these findings. If they slide the glide path forward half a decade (2018-2019) when careers are established it may tell a different story and one not as dire. :beer

Source: Not broke millennial
Last edited by pokebowl on Thu Mar 29, 2018 2:01 pm, edited 1 time in total.
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Re: What is the endgame for Millennials?

Post by TigerNest »

The end game is that we’ll all die out in 2070-2090. :shock:
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Re: What is the endgame for Millennials?

Post by Texanbybirth »

I always thought Gen Xers were doing worse than millennials in a lot of ways (credit card debt, mortgage debt, retirement savings) so I don't plan on taking their jobs.
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Re: What is the endgame for Millennials?

Post by Pajamas »

It is worth noting in this context that the millennial generation has a greater inequality in wealth than previous generations.
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Re: What is the endgame for Millennials?

Post by KlangFool »

OP,

People that care about their personal finance will take action to do something about that. Meanwhile, other hope that they get lucky. Nothing changes. It is always the same. It is the difference between "Do Something" and "Hope and Pray".

Do you need to guess which group has a better shot to improve their lives?

This is the lesson that I observed from my families across 30+ countries of the world.

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Last edited by KlangFool on Thu Mar 29, 2018 2:18 pm, edited 1 time in total.
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Re: What is the endgame for Millennials?

Post by Darth Xanadu »

pokebowl wrote: Thu Mar 29, 2018 2:00 pm Not sure how recent this study really was. Looking at the study samples, unless I am mistaken they used pre 2014 up to 2014 data for this study? While no real year limit is officially defined for what makes up a "millennial", using pew research in 2014 the oldest millennial per pew's definition would be a little over 33 years of age. Given the young age of millennials when this data was pulled, tends in my opinion to shine some light on the findings. With a majority in their teens to twenty something, it would make sense for these findings. If they slide the glide path forward half a decade (2018-2019) when careers are established it may tell a different story and one not as dire. :beer

Source: Not broke millennial
Great point. It does look like the study (while conducted recently) used census data from several years ago.
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Re: What is the endgame for Millennials?

Post by finite_difference »

livesoft wrote: Thu Mar 29, 2018 1:57 pm I think that pensions vanishing is good for Millennials. The reason is that pensions die with their parents, but if their parents had 401(k)s, 403(b)s, IRAs, then they will inherit quite a bit of money.
The best news I’ve heard all week and it also proves how researchers are good at wasting time making up problems that don’t exist in real life.

We millennials don’t actually even need to save for retirement!!
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Re: What is the endgame for Millennials?

Post by Texanbybirth »

livesoft wrote: Thu Mar 29, 2018 1:57 pm I think that pensions vanishing is good for Millennials. The reason is that pensions die with their parents, but if their parents had 401(k)s, 403(b)s, IRAs, then they will inherit quite a bit of money.
Personally I'd love to see my parents blow their nest egg on themselves. I think it'd take a while, but I can think of some fun ways for them to spend it on themselves. :D
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Re: What is the endgame for Millennials?

Post by wolf359 »

livesoft wrote: Thu Mar 29, 2018 1:57 pm I think that pensions vanishing is good for Millennials. The reason is that pensions die with their parents, but if their parents had 401(k)s, 403(b)s, IRAs, then they will inherit quite a bit of money.
Their parents aren't saving, either. At retirement (for 65 year olds and higher), the average 401k balance is slightly under $200,000. That number is skewed upwards by max savers like us. The median 401k balance (also for age 65+) is only $61K.

Your kids might inherit a bit, but most Millennials probably won't.
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Re: What is the endgame for Millennials?

Post by Hoglebed »

As a millenial (28 years old), with many millenial friends and acquaintances, there is no end game. Retirement couldn’t be further off the radar for 90-95% of my generation. There are some factors, which the article details, that certainly make it hard for many millenials to save (student loans, useless degrees, low paying entey level jobs, etc). With that said, my generation needs to bear some responsibility in their own choices, blaming all of our woes on boomers and X-ers does nothing to help the problem.

I see insane amounts of money being spent on travel, bar tabs, clothing, ‘experiences’ etc without so much as a thought towards saving or investing. These are the same people complaining about the economy, the political climate, and a host of other reasons, with very few taking it into their own hands. The days of working hard, sacrificing wants for needs, delayed gratification and financial prioretizing are gone.

I have a very bleak outlook for all but the top few percentile of my generation. Even high earners with all the privilege are forgoing neccessary saving for their own here-and-now enjoyment. There is of course a healthy balance to be found between living life now and saving for the future, but many have not come close to finding it.

Realisitically, my generation will be working until their mid 70’s on average with very little to show for it. The likely hood of reduced SS benefits, dwindling and insolvent pension funds, increased life expectancy, increased population age, exponentially increasing healthcare costs, and the imminence of AI/computer learning making a lot of jobs irrelavent... all of these factors further exaserbate the eventual plight of Millenials nearing a woefully underfunded retirement. I think when I reach 65 I’m going long on cat food... my generation will surely need to eat.
Last edited by Hoglebed on Thu Mar 29, 2018 2:21 pm, edited 2 times in total.
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Re: What is the endgame for Millennials?

Post by Iridium »

Looking at the report, the end game for millennials is that they find full time, stable employment. 90% of millennials who were eligible to participate did. The top reason they were not eligible was that their employer did not offer a plan (effects all generations nearly equally), were part time, or did not have enough of a tenure at their company (both reasons that should have less impact as the generation ages).

If a millennial never finds full by time employment, then chances are they are probably earning low enough amounts that social security will replace a substantial percentage of their income. As a generation, they are also mucked up by the amount of student loan debt. Once they start paying it off in their late thirties to early forties, a lot of money is freed up for retirement savings.

Report also does not seem to include anything other than employer sponsored plan as retirement savings, which is probably inaccurate, especially among millennials who do not qualify for an employer retirement plan.
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Re: What is the endgame for Millennials?

Post by cusetownusa »

smitcat wrote: Thu Mar 29, 2018 1:54 pm Simple - they will continue to work until the time that they have enough to retire.
This...same as every generation. I am not sure what generation label i fall into, maybe GenX (born 1979), but I don't remember any of my friends, including me, saving much during our 20's.
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Re: What is the endgame for Millennials?

Post by triceratop »

Lots of ink is spilled about my generation, but from what I see in my perch due to the long-term implications of automation and longer life expectancies, an even higher premium will be paid for those with substantial higher education. It's already been shown that much of the income gains have gone to highly skilled workers. That seems likely to continue, I see no reason why it will not. So right now, it may be hard to tell how my generation or who in my generation fares well: the people who will end up in the best position may currently have quite low net worths but high expected lifetime earnings.

My personal endgame goal: financial independence. Using reasonable (5%) growth assumptions my current nest egg will provide me $23k (in 2018 dollars) in withdrawals at a 4% rate when I am 65. This is more than I currently spend per year. So I guess I am done saving? Uh, no.
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Re: What is the endgame for Millennials?

Post by Watty »

livesoft wrote: Thu Mar 29, 2018 1:57 pm I think that pensions vanishing is good for Millennials. The reason is that pensions die with their parents, but if their parents had 401(k)s, 403(b)s, IRAs, then they will inherit quite a bit of money.
Pensions from private companies were often not all that good for most people anyway because they were not indexed for inflation. Even at their peak only around a third of private employers had pension plans so they never really covered as many people as you might have thought either.

Government pensions are a lot different.
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Re: What is the endgame for Millennials?

Post by livesoft »

Hoglebed wrote: Thu Mar 29, 2018 2:18 pm As a millennial (28 years old), with many millennial friends and acquaintances, there is no end game. Retirement couldn’t be further off the radar for 90-95% of my generation.
Same as it ever was.

When I was 28 years old, I was just finishing up a post-doc stint and had travelled quite a bit. We didn't have any money at all. Then, I got a "real job" and took 10 years before we had kids and bought a house.

But now, This Must Be The Place
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Re: What is the endgame for Millennials?

Post by triceratop »

Never mind, according to this report, I am too young to be a millenial. :shock: 8-)

I retract my previous comment.
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Re: What is the endgame for Millennials?

Post by EnjoyIt »

They will live on whatever social security gives them. It is no different than all the other people who have retired over the last few decades with minimal to no savings. Most people care only about the here and now and don't concern themselves to much about the future until it is too late. Nothing has changed.
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Re: What is the endgame for Millennials?

Post by FPS_dapdap »

Hoglebed wrote: Thu Mar 29, 2018 2:18 pm As a millenial (28 years old), with many millenial friends and acquaintances, there is no end game. Retirement couldn’t be further off the radar for 90-95% of my generation. There are some factors, which the article details, that certainly make it hard for many millenials to save (student loans, useless degrees, low paying entey level jobs, etc). With that said, my generation needs to bear some responsibility in their own choices, blaming all of our woes on boomers and X-ers does nothing to help the problem.

I see insane amounts of money being spent on travel, bar tabs, clothing, ‘experiences’ etc without so much as a thought towards saving or investing. These are the same people complaining about the economy, the political climate, and a host of other reasons, with very few taking it into their own hands. The days of working hard, sacrificing wants for needs, delayed gratification and financial prioretizing are gone.

I have a very bleak outlook for all but the top few percentile of my generation. Even high earners with all the privilege are forgoing neccessary saving for their own here-and-now enjoyment. There is of course a healthy balance to be found between living life now and saving for the future, but many have not come close to finding it.

Realisitically, my generation will be working until their mid 70’s on average with very little to show for it. The likely hood of reduced SS benefits, dwindling and insolvent pension funds, increased life expectancy, increased population age, exponentially increasing healthcare costs, and the imminence of AI/computer learning making a lot of jobs irrelavent... all of these factors further exaserbate the eventual plight of Millenials nearing a woefully underfunded retirement. I think when I reach 65 I’m going long on cat food... my generation will surely need to eat.
+1 could not have said this better myself.
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Re: What is the endgame for Millennials?

Post by pokebowl »

triceratop wrote: Thu Mar 29, 2018 2:29 pm Never mind, according to this report, I am too young to be a millenial. :shock: 8-)

I retract my previous comment.
Get off my lawn generation Z. I kid, but honestly what is the cut off?
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Re: What is the endgame for Millennials?

Post by simplesimon »

What did the greatest generation say about the baby boomers in the 1970's and 1980's?
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Re: What is the endgame for Millennials?

Post by Darth Xanadu »

pokebowl wrote: Thu Mar 29, 2018 2:33 pm
triceratop wrote: Thu Mar 29, 2018 2:29 pm Never mind, according to this report, I am too young to be a millenial. :shock: 8-)

I retract my previous comment.
Get off my lawn generation Z. I kid, but honestly what is the cut off?
It's vague. I guess if you were born after (1990-1995) you're in the Post-Millennial group...Gen Z or whatever other labels exist.
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Re: What is the endgame for Millennials?

Post by LiterallyIronic »

pokebowl wrote: Thu Mar 29, 2018 2:33 pm
triceratop wrote: Thu Mar 29, 2018 2:29 pm Never mind, according to this report, I am too young to be a millenial. :shock: 8-)

I retract my previous comment.
Get off my lawn generation Z. I kid, but honestly what is the cut off?
And what's the start, for that matter? I'm early 80s and so I'm Xennial: https://www.merriam-webster.com/words-a ... ng-xennial
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Re: What is the endgame for Millennials?

Post by triceratop »

Darth Xanadu wrote: Thu Mar 29, 2018 2:41 pm
pokebowl wrote: Thu Mar 29, 2018 2:33 pm
triceratop wrote: Thu Mar 29, 2018 2:29 pm Never mind, according to this report, I am too young to be a millenial. :shock: 8-)

I retract my previous comment.
Get off my lawn generation Z. I kid, but honestly what is the cut off?
It's vague. I guess if you were born after (1990-1995) you're in the Post-Millennial group...Gen Z or whatever other labels exist.
According to the study, anyone born after 1991 is not a Millennial.
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Re: What is the endgame for Millennials?

Post by Darth Xanadu »

triceratop wrote: Thu Mar 29, 2018 2:45 pm
Darth Xanadu wrote: Thu Mar 29, 2018 2:41 pm
pokebowl wrote: Thu Mar 29, 2018 2:33 pm
triceratop wrote: Thu Mar 29, 2018 2:29 pm Never mind, according to this report, I am too young to be a millenial. :shock: 8-)

I retract my previous comment.
Get off my lawn generation Z. I kid, but honestly what is the cut off?
It's vague. I guess if you were born after (1990-1995) you're in the Post-Millennial group...Gen Z or whatever other labels exist.
According to the study, anyone born after 1991 is not a Millenial.

True, but I don't know if this study is the authority on defining generational cohorts. I've seen different (and even overlapping) ranges for all the generations. Maybe there is a "defined" range somewhere but I don't know where.
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Re: What is the endgame for Millennials?

Post by TIAX »

wolf359 wrote: Thu Mar 29, 2018 2:16 pm
livesoft wrote: Thu Mar 29, 2018 1:57 pm I think that pensions vanishing is good for Millennials. The reason is that pensions die with their parents, but if their parents had 401(k)s, 403(b)s, IRAs, then they will inherit quite a bit of money.
Their parents aren't saving, either. At retirement (for 65 year olds and higher), the average 401k balance is slightly under $200,000. That number is skewed upwards by max savers like us. The median 401k balance (also for age 65+) is only $61K.

Your kids might inherit a bit, but most Millennials probably won't.
A bit? Livesoft's kids will be inheriting a little more than a bit :greedy
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Re: What is the endgame for Millennials?

Post by Conch55 »

One of the problems with labels is they are divisive. I am a boomer retired tech worker with a small, non cola, pension and whatever we saved via 401k/IRA. When I was 28 I was a surfer living the beach life with no goals. After returning to school I did a life reset at 30, started a tech career and now am retired at 63. I was/am a disciplined investor and saver so that helped but I think the same could be said of the current generation. I didn't have a helpful community such as the BH to provide guidance. I think you can get it done with the new normal.
Hoglebed wrote: ↑Thu Mar 29, 2018 3:18 pm
As a millenial (28 years old), with many millenial friends and acquaintances, there is no end game. Retirement couldn’t be further off the radar for 90-95% of my generation. There are some factors, which the article details, that certainly make it hard for many millenials to save (student loans, useless degrees, low paying entey level jobs, etc). With that said, my generation needs to bear some responsibility in their own choices, blaming all of our woes on boomers and X-ers does nothing to help the problem.

I see insane amounts of money being spent on travel, bar tabs, clothing, ‘experiences’ etc without so much as a thought towards saving or investing. These are the same people complaining about the economy, the political climate, and a host of other reasons, with very few taking it into their own hands. The days of working hard, sacrificing wants for needs, delayed gratification and financial prioretizing are gone.

I have a very bleak outlook for all but the top few percentile of my generation. Even high earners with all the privilege are forgoing neccessary saving for their own here-and-now enjoyment. There is of course a healthy balance to be found between living life now and saving for the future, but many have not come close to finding it.

Realisitically, my generation will be working until their mid 70’s on average with very little to show for it. The likely hood of reduced SS benefits, dwindling and insolvent pension funds, increased life expectancy, increased population age, exponentially increasing healthcare costs, and the imminence of AI/computer learning making a lot of jobs irrelavent... all of these factors further exaserbate the eventual plight of Millenials nearing a woefully underfunded retirement. I think when I reach 65 I’m going long on cat food... my generation will surely need to eat.
+1 could not have said this better myself.
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Re: What is the endgame for Millennials?

Post by Shallowpockets »

When I was 28 I did not have a pot to p### in. I did not even start saving until 41 when I finally got a real job.
Now I am 67, retired two years with under 1M, now member of the 2 comma club. And I did not have a job that made any more than 75K a year at highest.
No one my age group then had much thought to retirement money. There were no 401/403/IRA/Roth, etc. And at 28 it was not on the radar.
This millenial savings emphasis is a big nothingburger (as they might say). Sure we older BHs know "now", but when you are 28 you still have time. It is not a lost cause.
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Re: What is the endgame for Millennials?

Post by triceratop »

I enjoyed the section discussing the saver's credit: the authors bemoan its low rate of usage. However it's not so simple for a millennial to qualify: anyone in full time graduate or professional school is ineligible to claim it (I have never claimed it). The authors do not mention this important exception. We are encouraged to have higher educational attainment, then while pursuing that we hear from study authors that we are not educated enough about the credit to claim it. Maybe study authors should do their own research before blaming others.
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Re: What is the endgame for Millennials?

Post by LiterallyIronic »

triceratop wrote: Thu Mar 29, 2018 3:00 pm I enjoyed the section discussing the saver's credit: the authors bemoan its low rate of usage. However it's not so simple for a millennial to qualify: anyone in full time graduate or professional school is ineligible to claim it (I have never claimed it). The authors do not mention this important exception. We are encouraged to have higher educational attainment, then while pursuing that we hear from study authors that we are not educated enough about the credit to claim it. Maybe study authors should do their own research before blaming others.
If you can't get the Saver's Credit because you're in school, you should be able to get the Lifetime Learning Credit. My understanding is that both are a $2,000 (max) credit.
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Re: What is the endgame for Millennials?

Post by triceratop »

LiterallyIronic wrote: Thu Mar 29, 2018 3:09 pm
triceratop wrote: Thu Mar 29, 2018 3:00 pm I enjoyed the section discussing the saver's credit: the authors bemoan its low rate of usage. However it's not so simple for a millennial to qualify: anyone in full time graduate or professional school is ineligible to claim it (I have never claimed it). The authors do not mention this important exception. We are encouraged to have higher educational attainment, then while pursuing that we hear from study authors that we are not educated enough about the credit to claim it. Maybe study authors should do their own research before blaming others.
If you can't get the Saver's Credit because you're in school, you should be able to get the Lifetime Learning Credit. My understanding is that both are a $2,000 (max) credit.
No, not if the student pays no tuition or fees.
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Re: What is the endgame for Millennials?

Post by Raryn »

pokebowl wrote: Thu Mar 29, 2018 2:00 pm Not sure how recent this study really was. Looking at the study samples, unless I am mistaken they used pre 2014 up to 2014 data for this study? While no real year limit is officially defined for what makes up a "millennial", using pew research in 2014 the oldest millennial per pew's definition would be a little over 33 years of age. Given the young age of millennials when this data was pulled, tends in my opinion to shine some light on the findings. With a majority in their teens to twenty something, it would make sense for these findings. If they slide the glide path forward half a decade (2018-2019) when careers are established it may tell a different story and one not as dire. :beer

Source: Not broke millennial
This. In 2014, by their definition, the "millenials" (myself included) were 23-33. And even in that cohort, 1/3 had already begun saving for retirement. That's actually a lot higher than I expected. I'd be curious what the numbers are today, after everyone is 3 years older and more people have stable employment.

What percentage of baby boomers had significant retirement savings in 1980?
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Re: What is the endgame for Millennials?

Post by LiterallyIronic »

triceratop wrote: Thu Mar 29, 2018 3:12 pm
LiterallyIronic wrote: Thu Mar 29, 2018 3:09 pm
triceratop wrote: Thu Mar 29, 2018 3:00 pm I enjoyed the section discussing the saver's credit: the authors bemoan its low rate of usage. However it's not so simple for a millennial to qualify: anyone in full time graduate or professional school is ineligible to claim it (I have never claimed it). The authors do not mention this important exception. We are encouraged to have higher educational attainment, then while pursuing that we hear from study authors that we are not educated enough about the credit to claim it. Maybe study authors should do their own research before blaming others.
If you can't get the Saver's Credit because you're in school, you should be able to get the Lifetime Learning Credit. My understanding is that both are a $2,000 (max) credit.
No, not if the student pays no tuition or fees.
I don't know what student doesn't pay tuition or fees, but I imagine that student's free tuition and fees are worth more than the $2,000 tax credit. :happy
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Re: What is the endgame for Millennials?

Post by caffeinefree »

Hoglebed wrote: Thu Mar 29, 2018 2:18 pm As a millenial (28 years old), with many millenial friends and acquaintances, there is no end game. Retirement couldn’t be further off the radar for 90-95% of my generation. There are some factors, which the article details, that certainly make it hard for many millenials to save (student loans, useless degrees, low paying entey level jobs, etc). With that said, my generation needs to bear some responsibility in their own choices, blaming all of our woes on boomers and X-ers does nothing to help the problem.

I see insane amounts of money being spent on travel, bar tabs, clothing, ‘experiences’ etc without so much as a thought towards saving or investing. These are the same people complaining about the economy, the political climate, and a host of other reasons, with very few taking it into their own hands. The days of working hard, sacrificing wants for needs, delayed gratification and financial prioretizing are gone.

I have a very bleak outlook for all but the top few percentile of my generation. Even high earners with all the privilege are forgoing neccessary saving for their own here-and-now enjoyment. There is of course a healthy balance to be found between living life now and saving for the future, but many have not come close to finding it.

Realisitically, my generation will be working until their mid 70’s on average with very little to show for it. The likely hood of reduced SS benefits, dwindling and insolvent pension funds, increased life expectancy, increased population age, exponentially increasing healthcare costs, and the imminence of AI/computer learning making a lot of jobs irrelavent... all of these factors further exaserbate the eventual plight of Millenials nearing a woefully underfunded retirement. I think when I reach 65 I’m going long on cat food... my generation will surely need to eat.
Hi, I'm a millennial (33 years old), and I think you take a very judgmental outlook on this generation (as do most of the posters on this topic).

One thing folks need to consider is that a good portion of this generation graduated in the height of the financial crisis. I myself graduated in August 2008, possibly the WORST time to graduate, period. I did not have a job lined up when I graduated, despite having a 3.95 GPA and a BS in Mechanical Engineering. I worked two part-time jobs until I finally got a job in my field in October 2008, for a pittance salary, with a promise of no raises and a layoff forecast to happen within the following 2 years (they were very upfront about all of this, at least).

I will probably never make up for the low earnings that I had my first few years working, BUT I am fortunate to have had a job at all - many of my peers were not so fortunate. So it does not surprise me at all to hear that the lion's share of my generation (as of 2014) had almost nothing saved. I also think that watching the stock market plunge like that has created some mistrust of placing savings in stocks. I can't tell you how many people under 30 that I've talked to who told me they had all of their savings in bonds, because they feel it's "safe." :(

I don't think the low savings rates are a result of poor choices, so much as a poor financial climate. And as for those insane amounts of money being spent on "experiences?" Well, I'm probably one of those people you're talking about, I spend almost as much on travel annually as I do on rent. So do many of my peers. But we also all contribute to our 401(k)s, have modest cars, have roommates well into our 30s, etc. Just because people prioritize spending differently doesn't mean that they are irresponsible. Lose the judgment, kid!
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Re: What is the endgame for Millennials?

Post by triceratop »

LiterallyIronic wrote: Thu Mar 29, 2018 3:18 pm
triceratop wrote: Thu Mar 29, 2018 3:12 pm No, not if the student pays no tuition or fees.
I don't know what student doesn't pay tuition or fees, but I imagine that student's free tuition and fees are worth more than the $2,000 tax credit. :happy
Almost all PhD students and many MS students. Medical students who don't have tuition expenses for whatever reasons. Probably others. And while you're correct and such people should be thankful (or not, in some cases they're accepting below market wages), that isn't related to the study author's point.
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Re: What is the endgame for Millennials?

Post by LiterallyIronic »

caffeinefree wrote: Thu Mar 29, 2018 3:18 pm Hi, I'm a millennial (33 years old), and I think you take a very judgmental outlook on this generation (as do most of the posters on this topic).

One thing folks need to consider is that a good portion of this generation graduated in the height of the financial crisis. I myself graduated in August 2008, possibly the WORST time to graduate, period. I did not have a job lined up when I graduated, despite having a 3.95 GPA and a BS in Mechanical Engineering. I worked two part-time jobs until I finally got a job in my field in October 2008, for a pittance salary, with a promise of no raises and a layoff forecast to happen within the following 2 years (they were very upfront about all of this, at least).

I will probably never make up for the low earnings that I had my first few years working, BUT I am fortunate to have had a job at all - many of my peers were not so fortunate. So it does not surprise me at all to hear that the lion's share of my generation (as of 2014) had almost nothing saved. I also think that watching the stock market plunge like that has created some mistrust of placing savings in stocks. I can't tell you how many people under 30 that I've talked to who told me they had all of their savings in bonds, because they feel it's "safe." :(
This is the same pickle I ran into. I graduated in December 2008 with a BS in Business Management and couldn't find anything so I took a job in a call center two months later for $9.50/hour. Worked my way up to managing a small call center for $11/hour in 2010. In 2011, though, I managed to snag a rudimentary programming job for $13/hour and by 2013 had worked my way up to $16/hour. At that point I'm 29 and have never had a job with any benefits (no 401k, health insurance, or paid time off). At that point, 2013, I went back to school to study Computer Science. During 2015, my junior year of classes, since all my GEs were done from my previous degree, I grabbed an internship that paid me $16/hour. During 2016, my senior year, I got a full-time job that paid $48k and had benefits. I enjoyed my first paid holiday at age 33, the same age where I got my first paycheck that had a comma in it. Two years later, I've worked my way up to $63,500.

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Re: What is the endgame for Millennials?

Post by ddurrett896 »

Darth Xanadu wrote: Thu Mar 29, 2018 1:43 pm I'm curious what you all think of this. What do you think the financial/retirement landscape will look like for Millennials when they hit their 60s and 70s?
I'm in my 30's and have thought...

Boomers are retiring and selling off stocks today, and with Genx/Millenials not buying at the same rate, they can be purchased cheaper. More sellers than buyers.

When I retire in 30 years, those GenX/Millenials will be scrambling to save, making them more expensive. More buyers than sellers.

Obviously the example above can adjust if a generation changing their savings habits or government regulation changes, etc.
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Re: What is the endgame for Millennials?

Post by ThriftyPhD »

triceratop wrote: Thu Mar 29, 2018 3:23 pm
LiterallyIronic wrote: Thu Mar 29, 2018 3:18 pm
triceratop wrote: Thu Mar 29, 2018 3:12 pm No, not if the student pays no tuition or fees.
I don't know what student doesn't pay tuition or fees, but I imagine that student's free tuition and fees are worth more than the $2,000 tax credit. :happy
Almost all PhD students and many MS students. Medical students who don't have tuition expenses for whatever reasons. Probably others. And while you're correct and such people should be thankful (or not, in some cases they're accepting below market wages), that isn't related to the study author's point.
This. I think the term graduate 'students' or graduate 'school' gives people who haven't gone to graduate school a very skewed idea of what it is. I've had many friends/family who just could not understand that no, I was not taking any classes (I was teaching them), nor was I getting the summer off.

It varies from school to school or between departments, but often the expectation is that you're working 80+ hours a week, which given the size of the stipend, it can put you below minimum wage. However, you're often not considered an employee so you do not qualify for certain tax benefits or other protections that employment can bring.
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Re: What is the endgame for Millennials?

Post by topofthebellcurve »

Tail-end millennial (32 y/o) checking in, albeit an extremely fortunate one: viewtopic.php?f=2&t=243243

This is something I think about a lot, particularly through the lens of housing affordability. I work in commercial real estate, and there's real anxiety among investors in multifamily (rental) assets that we're hitting peak rents in top metro areas, as anything higher (or even where are right now) will be a strengthening headwind for overall economic growth. If your talent can't afford to live in your city, job growth (and rents) will suffer. It's hard to see how spending 50%+ of take-home pay on income is viable long term, particularly in light of the other factors mentioned in this thread (vanishing pensions, de-unionization, insolvency of social security, automation/AI, etc.).

It is clear that some combination of the following will need to happen over the next 30 years as my generation ages towards retirement (likely in some combination):

1) Shift in expectations to working to a later age than previous generations. This is not necessarily a bad thing given increased life expectancy and particularly increased functionality in those later years. Productive work is an important part of psychological/social health, and retirement seems to kill you (quite literally).

2) Structural changes in entitlements and taxation. We're at/near historic lows in terms of tax burden on the top percentiles. As my generation becomes more politically active, I expect to see material increases in marginal top rates, cap gains, etc. Given our democratic system, it does not seem plausible that tens of millions of Millennials will age peacefully into retirement having saved little and expecting little back from the government. While implausible in the current political environment, we may very well see some sort of guaranteed minimum income established, thought this will of course require a huge step-up in tax revenues.

3) A lot of poverty and suffering. #s 1 and 2 probably will not happen fast enough to deter the continuation (and perhaps exacerbation) of wealth inequality, and we're going to see a lot of English Lit B.A.s (of which I am one) living in conditions that are the antithesis of the American dream and what we were "promised" as we started this path through higher education.

While some of the financial pain of our generation is clearly self-inflicted, I have a hard time pointing to this as a prime mover. For one, Americans as a group are one of the most individualistic of all nations and so are strongly biased towards seeing things through the lens of individual responsibility ("pull yourself up by your bootstraps") vs. larger macro/societal forces. Are they not saving because of avocado toast or because the primary cost drivers (housing, education, healthcare) have all skyrocketed compared to wage growth vs. our parent's generation?

The previous generation created a financial minefield for the present one, and I doubt we will live in it without resistance or action.
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Re: What is the endgame for Millennials?

Post by ThriftyPhD »

caffeinefree wrote: Thu Mar 29, 2018 3:18 pm Hi, I'm a millennial (33 years old), and I think you take a very judgmental outlook on this generation (as do most of the posters on this topic).
+1

I was reading an article a couple years ago about all of the moral shortcomings and inadequacies of the millennial generation, written by a trust fund boomer, and found it interesting that he spilled so much ink complaining about millennials and their avocado toast. "How are you going to save for that house when you're wasting all of your money on avocado toast?"

When fruit spread on bread is a sign of conspicuous consumption, you know things have gone downhill.

Millennials are also very spoiled. Why, when they rent an apartment, they expect it to have 4 walls AND a roof. I bet they even pay to heat it during the winter. Shameless how they throw their money away instead of buying the overpriced homes the boomers are trying to offload.
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Re: What is the endgame for Millennials?

Post by ddurrett896 »

caffeinefree wrote: Thu Mar 29, 2018 3:18 pm I will probably never make up for the low earnings that I had my first few years working,
Why? I'm a 31 year old Millennial that identifies as GenXer and it's just a few years. It's all about time in the market, not to mention those are likely your lowest grossing years. Think from 25-65 you work 40 years - waste 4 years and you're still looking at 36 years or 90% of what someone who started at 25 would have. Don't over think it. Save...period!
caffeinefree wrote: Thu Mar 29, 2018 3:18 pm I don't think the low savings rates are a result of poor choices, so much as a poor financial climate. And as for those insane amounts of money being spent on "experiences?" Well, I'm probably one of those people you're talking about, I spend almost as much on travel annually as I do on rent. So do many of my peers. But we also all contribute to our 401(k)s, have modest cars, have roommates well into our 30s, etc. Just because people prioritize spending differently doesn't mean that they are irresponsible. Lose the judgment, kid!
You can't say the low savings rate is a result of a poor financial climate, not poor choices, then say people prioritize spending differently (which is why they haven't saved a sufficient amount). That's exactly what it is!

Everyone was in the same boat in 2008 and honestly not getting a job was probably low on the fear scale. If you think college graduates had it bad, imagine those people who were laid off with a mortgage, kids, car payment, day care, etc....

If any of your friends are still in dead end job making nothing, tell them to go learn a trade. I have a couple friend that didn't finish high school, spent months in jail, had no direction from family bust their ass doing trade work, moved up and either running jobs now and working for themselves. It's that simple.

I've made more $/hr pulling concrete and working construction on side jobs than I have working for a Fortune 100 company with an executive level job.
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Re: What is the endgame for Millennials?

Post by Alexa9 »

No one is going to starve in the USA. Homelessness is certainly on the rise though among millenials and they seem to take pride in it as an "alternative lifestyle" euphemism. More power to them for not slaving away at a job their entire life just to live in a swanky retirement home.
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Re: What is the endgame for Millennials?

Post by keinodoggy »

Hoglebed wrote: Thu Mar 29, 2018 2:18 pm As a millenial (28 years old), with many millenial friends and acquaintances, there is no end game. Retirement couldn’t be further off the radar for 90-95% of my generation. There are some factors, which the article details, that certainly make it hard for many millenials to save (student loans, useless degrees, low paying entey level jobs, etc). With that said, my generation needs to bear some responsibility in their own choices, blaming all of our woes on boomers and X-ers does nothing to help the problem.

I see insane amounts of money being spent on travel, bar tabs, clothing, ‘experiences’ etc without so much as a thought towards saving or investing. These are the same people complaining about the economy, the political climate, and a host of other reasons, with very few taking it into their own hands. The days of working hard, sacrificing wants for needs, delayed gratification and financial prioretizing are gone.

I have a very bleak outlook for all but the top few percentile of my generation. Even high earners with all the privilege are forgoing neccessary saving for their own here-and-now enjoyment. There is of course a healthy balance to be found between living life now and saving for the future, but many have not come close to finding it.

Realisitically, my generation will be working until their mid 70’s on average with very little to show for it. The likely hood of reduced SS benefits, dwindling and insolvent pension funds, increased life expectancy, increased population age, exponentially increasing healthcare costs, and the imminence of AI/computer learning making a lot of jobs irrelavent... all of these factors further exaserbate the eventual plight of Millenials nearing a woefully underfunded retirement. I think when I reach 65 I’m going long on cat food... my generation will surely need to eat.
+1
Well said...
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Re: What is the endgame for Millennials?

Post by bligh »

ThriftyPhD wrote: Thu Mar 29, 2018 3:49 pm
When fruit spread on bread is a sign of conspicuous consumption, you know things have gone downhill.
The point is, if you were to just save the extra $6 you spent on that avocado toast every day. You would be able to set aside a $180 MORE each month! Assuming the current 3% rate of interest on long term treasuries, You'll have a Whopping $100,000 in just 30 years!! Assuming absolutely no growth in real estate prices over that period you would finally be able to put 10% down on that starter home in the bay area! Absolutely game changing. If only those millennials would cut back on that avocado toast.
Last edited by bligh on Thu Mar 29, 2018 4:08 pm, edited 2 times in total.
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Re: What is the endgame for Millennials?

Post by peppers »

simplesimon wrote: Thu Mar 29, 2018 2:39 pm What did the greatest generation say about the baby boomers in the 1970's and 1980's?
Speaking as a boomer, we were viewed as a bunch of lazy, self-centered, long haired hippies. :)

P.S. Having long hair or any hair for that matter is no longer an issue for this boomer.
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Re: What is the endgame for Millennials?

Post by LiterallyIronic »

ddurrett896 wrote: Thu Mar 29, 2018 3:56 pm
caffeinefree wrote: Thu Mar 29, 2018 3:18 pm I will probably never make up for the low earnings that I had my first few years working,
Why? I'm a 31 year old Millennial that identifies as GenXer and it's just a few years. It's all about time in the market, not to mention those are likely your lowest grossing years. Think from 25-65 you work 40 years - waste 4 years and you're still looking at 36 years or 90% of what someone who started at 25 would have. Don't over think it. Save...period!
I think they meant their income will never make up for it - that it will always be lower than it otherwise would've been.
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Re: What is the endgame for Millennials?

Post by triceratop »

bligh wrote: Thu Mar 29, 2018 4:06 pm
ThriftyPhD wrote: Thu Mar 29, 2018 3:49 pm
When fruit spread on bread is a sign of conspicuous consumption, you know things have gone downhill.
The point is, if you were to just save the extra $6 you spent on that avocado toast every day. You would be able to set aside a $180 MORE each month! Assuming the current 3% rate of interest on long term treasuries, You'll have a Whopping $100,000 in just 30 years!! Assuming absolutely no growth in real estate prices over that period you would finally be able to put 10% down on that starter home in the bay area! Absolutely game changing. If only those millennials would cut back on that avocado toast.
Why stop there? That's it, I'm giving up food for Lent. Next time. :wink:

I'm really going to be ahead of the game. In fact if I give up food even more then I'll need even less real estate, maybe 6 cubic feet!
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Re: What is the endgame for Millennials?

Post by athan »

livesoft wrote: Thu Mar 29, 2018 1:57 pm I think that pensions vanishing is good for Millennials. The reason is that pensions die with their parents, but if their parents had 401(k)s, 403(b)s, IRAs, then they will inherit quite a bit of money.
Agreed
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