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Millennials want to retire by 61, but most have nothing saved

clapclapclap

By clapclapclap
in Business and Markets

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Who do you blame it on?  

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  1. 1. Who do you blame it on?

    • The sunshine
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    • The good times
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    • The boogie
      6
    • No one
      4
    • Rio
      9
    • The rain
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    • Boomers
      36
    • Boomer Sooners
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    • Themselves
      41

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Celery Man
Celery Man

That's cool, I get it.  I have a bachelor's degree in History and I'm software engineering manager.  I don't really care about specific crybabies who went off and got a phd in gender studies or shit h

Mole
Mole

Uncle Sam has a great plan to get some work and life experience, college money (the Post 9/11 G.I. Bill is fantastic), and get the travel bug out of you. You'll get lots of exercise too. I think

CooterBrown
CooterBrown

So millennial are the new baby boomers. Does Gen X have to do fucking everything in here?!?!?

Okie State

Okie State 3821

Posted
Posted


Well, after another 16 years of payments, the balance will be forgiven. Of course, then I’ll have to figure out a way to pay the taxes on that.
That's what I figured.

Can you explain how you ended up upside down though? Was there no set payment schedule?
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DanRydell

DanRydell 799

Posted
Posted
That's what I figured.

Can you explain how you ended up upside down though? Was there no set payment schedule?


There are different repayment options.

There’s the standard 10-year payment schedule. That wasn’t gonna work because the monthly payment exceeded my post-tax income my first few years out.

So I instead did an income-contingent plan. The gist of which is that you pay 15% of your income above the poverty line. It has to be renewed every 12 months and payments are re-calculated based on your most recent income tax filing.

At this point, I’m making enough where I could stretch myself a bit to revert to the standard plan (at $2100/mo for the next 10 years) but I think that would ultimately cost me more than to just ride out the income-contingent plan for the next 16 years (payment is $600/mo at the moment).
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'stache

'stache 21825

Posted
Posted (edited)
2 hours ago, Brisketexan said:

But a headline of "a generation that has to spend 50% of its income on things that the prior generation only had to spend 30% of its income on is not saving as much as the prior generation" doesn't really grab ya, or play into the "stupid lazy entitled millenials" trope.

Spot on.  Except the disparity is much wider than this, and add in wage stagnation.  

Edited by 'stache
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Dahobbs

Dahobbs 17627

Posted
Posted (edited)
1 hour ago, TwiceHorn said:

Why is it that "socially revolutionary" generations are really bad with money?  Viz:  Baby boomers and apparently, millienials.  Somewhat rhetorical question.

If you read the actual report the article is based on (I literally quoted the summary of it in the second post of the thread), millennials being bad with money has nothing to do with it. Milliennials have had relatively poor wages in adjusted comparison to prior generations despite being more educated. Despite that fact, millennials have saved a similar rate to Generation X, but are saddled by increased health and education costs. Further, millennials will live longer than prior generations and things like social security will be diminished or non-existent, meaning that millennials will have to save a HIGHER percentage of their income than prior generations in order to retire. 

In sum:

(1) less wages;

(2) higher costs; 

(3) less access to social safety nets;

(4) longer expected average life-time; and

(5) a large portion of their early adult life occurred during a recession, delaying typical asset acquisitions like houses;

= millennials not prepared for retirement. 

But =/ millennials bad with money.

In fact, the article says that 9 of 10 millennials that are eligible for retirement plans at work contribute to those plans. That's pretty fucking good. 

1 hour ago, ABSR said:

What recession are we talking about?  Last one ended in 2009.   

 

Have they been holding out for management positions?

Is this a serious post? That recession. You know, the one that coincided with when millennials would have started getting jobs and earning income. The one that delayed their ability to do things like, I don't know, save for retirement.  

 

 

Edited by Dahobbs
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Rusty Shackelford

Rusty Shackelford 414

Posted
Posted
4 hours ago, clapclapclap said:

The median retirement savings among millennials is about $19,100 — and roughly two-thirds have nothing saved so far, according to a February report by the National Institute on Retirement Security.

Uhh, if 2/3rds of all millennials have a savings balance of $0.00, then I'm pretty sure that also makes the median account balance = $0.00

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UTPhil2006

UTPhil2006 3807

Posted
Posted
2 hours ago, Aqua Buddha said:

Yeah, financial planners will tell you that millennials surprisingly like some face to face interaction when it comes to money and financial planning.  They''re not depositing checks all old school and such but they're reassured by some interaction on large transactions.

Wait I have to meet you guys face to face now for Mortgages?

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Dahobbs

Dahobbs 17627

Posted
Posted (edited)
8 minutes ago, Rusty Shackelford said:

Uhh, if 2/3rds of all millennials have a savings balance of $0.00, then I'm pretty sure that also makes the median account balance = $0.00

If you read the report, that number is actually the median retirement account balance of millennials with retirement accounts, not all millennials and not all savings. 

 

Edited by Dahobbs
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Guest

Guest

Posted
Posted
4 hours ago, Skipper said:

18 to 37 is a pretty wide range. Pretty disingenuous to include 18-25 year olds in analysis of retirement savings.   A median for those between the age of 30-37 would be more interesting and would probably still support the position that they aren't on pace to retire by 6.

Yep.  The vast majority of people I encounter in their early 30’s identify culturally more with me (I’m 40). Those under 30 are what I think of when I think millennial. 

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Dahobbs

Dahobbs 17627

Posted
Posted
1 minute ago, Anastasis said:

Holy shit at you guys talking about standard payments on student loans that are larger than my house payment. 

I had $800 a month payments after law school, and that was comparatively cheap. I know plenty that were well over $2,000 a month on a 10-year pay back period. 

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Anastasis

Anastasis 23480

Posted
Posted
3 minutes ago, Dahobbs said:

I had $800 a month payments after law school, and that was comparatively cheap. I know plenty that were well over $2,000 a month on a 10-year pay back period. 

Mine's about $200 a month, after pay off one of my consolidated bundles that had the highest interest rate (I think it was 3.25% or something). All the remaining are @1.625%.  IIRC, I consolidated most of those ca. 2004 or 2005 timeframe. I could pay them off if I wanted, but I just can't bring myself to do it at that interest rate.

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Whitman

Whitman 694

Posted
Posted
2 hours ago, Okie State said:
2 hours ago, DanRydell said:
Despite 9 years of monthly payments, my students loan balance is almost 50% larger today then it was when I graduated. So yeah, can’t say I’m putting away much for retirement.

What's the long term plan here?

BtGVuBLCAAE78Og.jpg

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Okie State

Okie State 3821

Posted
Posted


There are different repayment options.

There’s the standard 10-year payment schedule. That wasn’t gonna work because the monthly payment exceeded my post-tax income my first few years out.

So I instead did an income-contingent plan. The gist of which is that you pay 15% of your income above the poverty line. It has to be renewed every 12 months and payments are re-calculated based on your most recent income tax filing.

At this point, I’m making enough where I could stretch myself a bit to revert to the standard plan (at $2100/mo for the next 10 years) but I think that would ultimately cost me more than to just ride out the income-contingent plan for the next 16 years (payment is $600/mo at the moment).
Gotcha. Tough spot to be in. At least put away that extra $1500/month though.
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Guest

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Posted
Posted
27 minutes ago, Anastasis said:

Mine's about $200 a month, after pay off one of my consolidated bundles that had the highest interest rate (I think it was 3.25% or something). All the remaining are @1.625%.  IIRC, I consolidated most of those ca. 2004 or 2005 timeframe. I could pay them off if I wanted, but I just can't bring myself to do it at that interest rate.

Absolutely don’t pay that shit off. That'd be the dumbest thing you could do. 

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Superhero

Superhero 8832

Posted
Posted
5 hours ago, Captainant said:

It's pretty fucking absurd to try and save much for retirement right now. I'm chucking away nearly $2k a month in student debt payments for going to UT for five years. College is fucking absurdly expensive, and if you don't get many scholarships then you get to get deep dicked by 4-6% interest rate loans. I'm glad I get to pay off a house before I get to buy a house. 

Yup, this.

This is a big factor as to why millenials are saving at a lower rate.

In 1992, I only paid $2,000/year for out-of-state tuition. By the time I graduated, I paid $6500/year (300% increase ZOMG!) for a CE degree from a renowned university known for their top notch Civil Engineering program.

I don't want to know what college tuition is these days. I just assume that I will pay out the nose by the time my kids go to college 13 years from now.

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Spaulding Smails

Spaulding Smails 1555

Posted
Posted
2 hours ago, DanRydell said:

 


There are different repayment options.

There’s the standard 10-year payment schedule. That wasn’t gonna work because the monthly payment exceeded my post-tax income my first few years out.

So I instead did an income-contingent plan. The gist of which is that you pay 15% of your income above the poverty line. It has to be renewed every 12 months and payments are re-calculated based on your most recent income tax filing.

At this point, I’m making enough where I could stretch myself a bit to revert to the standard plan (at $2100/mo for the next 10 years) but I think that would ultimately cost me more than to just ride out the income-contingent plan for the next 16 years (payment is $600/mo at the moment).

 

Thanks for the clarification.  I had no idea that there was an income contingent plan.  I just assumed you were paying it off in a traditional fashion.  Sounds like your income contingent plan wasn't even covering interest.  That sucks, but you did what you had to do.

At this point, it certainly sounds like you are correct to just ride it out for seven more years.  It also sucks that, to a certain degree, it's in your best interest to have a lower income during that timeframe.

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Spaulding Smails

Spaulding Smails 1555

Posted
Posted
1 hour ago, Dahobbs said:

If you read the actual report the article is based on (I literally quoted the summary of it in the second post of the thread), millennials being bad with money has nothing to do with it. Milliennials have had relatively poor wages in adjusted comparison to prior generations despite being more educated. Despite that fact, millennials have saved a similar rate to Generation X, but are saddled by increased health and education costs. Further, millennials will live longer than prior generations and things like social security will be diminished or non-existent, meaning that millennials will have to save a HIGHER percentage of their income than prior generations in order to retire. 

In sum:

(1) less wages;

(2) higher costs; 

(3) less access to social safety nets;

(4) longer expected average life-time; and

(5) a large portion of their early adult life occurred during a recession, delaying typical asset acquisitions like houses;

= millennials not prepared for retirement. 

 

 

This is well summarized.  In a vacuum, it's easy to look ignore those factors as a whole and attribute it to entirely too much avocado toast and lattes, but each of those factors absolutely contribute to the inability to contribute effectively to a retirement plan.  Heck, I'm 38 and I've seen my own preparedness for retirement change due to a number of factors.  I went from ahead of the curve to behind the curve to trying to catch up with the curve in the last 10 years.  Add to the fact the obligation to pay for higher tuition for my own kids and that $ number for retirement gets tougher to achieve.  

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Spankytoes

Spankytoes 1742

Posted
Posted
1 hour ago, Superhero said:

Yup, this.

This is a big factor as to why millenials are saving at a lower rate.

In 1992, I only paid $2,000/year for out-of-state tuition. By the time I graduated, I paid $6500/year (300% increase ZOMG!) for a CE degree from a renowned university known for their top notch Civil Engineering program.

I don't want to know what college tuition is these days. I just assume that I will pay out the nose by the time my kids go to college 13 years from now.

We paid $23,487.24 in OOS tuition for our son to attend UTD last year as a freshman. And he lived at our personal house, not a dorm.

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Spankytoes

Spankytoes 1742

Posted
Posted
Just now, Judge Roybeanbag said:

Just curious but will he qualify as a resident this next year ?  

As of July 1, he is officially a resident again. The quota is 12 continuous months of living in Texas and working an average of 20 hours a week. As our youngest in now a Senior in HS, who also wants to go back to Texas, we are pleased.

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ShaggyBevo RIP

ShaggyBevo RIP 3868

Posted
Posted
5 hours ago, NotActuallyALonghorn said:

While states may have decreased funding, colleges have greatly expanded their bureaucracy and force students to pay for much more. In addition to much nicer dorms and stuff that cost much much more.

This. Deregulation was a huge backfire.  Academia no longer had to stick to a budget and there are now colleges up north with indoor lazy rivers.

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Judge Roybeanbag

Judge Roybeanbag 11819

Posted
Posted
3 minutes ago, Spankytoes said:

As of July 1, he is officially a resident again. The quota is 12 continuous months of living in Texas and working an average of 20 hours a week. As our youngest in now a Senior in HS, who also wants to go back to Texas, we are pleased.

Well that’s good. Even if it isn’t YOUR primary residence you’re still paying taxes so I figured after a certain time period they would count as a resident. With some out of state school rather it might actually be a good investment to buy a property there ahead of time and have the kid live there for a year before starting school.  Some cases it would save you well over $100k over a couple of years. 

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TwiceHorn

TwiceHorn 31512

Posted
Posted (edited)
1 hour ago, Spaulding Smails said:

This is well summarized.  In a vacuum, it's easy to look ignore those factors as a whole and attribute it to entirely too much avocado toast and lattes, but each of those factors absolutely contribute to the inability to contribute effectively to a retirement plan.  Heck, I'm 38 and I've seen my own preparedness for retirement change due to a number of factors.  I went from ahead of the curve to behind the curve to trying to catch up with the curve in the last 10 years.  Add to the fact the obligation to pay for higher tuition for my own kids and that $ number for retirement gets tougher to achieve.  

I think, after having done some research, that the income-contingent repayment plan is available to those on track for a public-service forgiveness program, which DR also indicated being part of.

 

I'm not going to criticize anyone here, even a millennial, for complying with the conventional wisdom and getting a college/post-grad education, even though financed to the gills.  But I have to ask, do you consider it worth it?  Would you advise your children to do the same?  Would you seek lower-cost education (community college, the local commuter school, etc.)?

Edited by TwiceHorn
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Dahobbs

Dahobbs 17627

Posted
Posted (edited)
6 minutes ago, TwiceHorn said:

I think, after having done some research, that the income-contingent repayment plan is available to those on track for a public-service forgiveness program, which DR also indicated being part of.

 

I'm not going to blame anyone here, even a millenial, for complying with the conventional wisdom and getting a college/post-grad education, even though financed to the gills.  But I have to ask, do you consider it worth it?  Would you advise your children to do the same?

I think the statistics still show that it is one the best things you can do, even with the inflated costs. And for me personally it has been worth it. But, I am generally of the belief that not everyone should go to a full time university. Most people would be better served by learning a trade and/or going through community college. If my child shows he is academically inclined or dedicated to learning, I'll fully support him going to college/graduate programs. If not, I'll encourage him to research other options to see if anything catches his interest. 

Edited by Dahobbs
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Deej

Deej 76858

Posted
Posted
31 minutes ago, thestud said:

 

 


That’s not my point. What I’m saying is this: Fuck the establishment and their saying you need a masters degree and six figures worth of debt to be successful. I was free of student debt by age 23, a homeowner at 26, and a quasi cattle baron at 29 ( I have 51 head and 52 acres that I own outright). Then at 30 I built a 3700sq custom home on 33 acres. Oh and I payed cash for IVF in the same year. It’s not hard to not be broke; you just can’t be a dumbass.

 

 

Trust me, I understand your point.

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clapclapclap

clapclapclap 9000

Posted
  • Author
Posted (edited)
46 minutes ago, thestud said:

That’s not my point. What I’m saying is this: Fuck the establishment and their saying you need a masters degree and six figures worth of debt to be successful. I was free of student debt by age 23, a homeowner at 26, and a quasi cattle baron at 29 ( I have 51 head and 52 acres that I own outright). Then at 30 I built a 3700sq custom home on 33 acres. Oh and I payed cash for IVF in the same year.  

 

 

 

Edited by clapclapclap
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Newdoc

Newdoc 3448

Posted
Posted
6 hours ago, FondrenRoad said:

Gen X were bigger on abandoning community and human interaction during business transactions.

Well, we’re also not real big on spending $7.00 on a dozen free range eggs to go with our $5.00 toast with half an ounce of guacamole on it.

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Newdoc

Newdoc 3448

Posted
Posted
1 minute ago, Anastasis said:

I like free range eggs. 

Yes, me too. Got a free source.  

On one hand I think millennials do bang up job of supporting the local community. On the other, they don’t usually think past their current phase in life, in my experience.

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Celery Man

Celery Man 20981

Posted
Posted

Just to follow up on the thing about the recession - there was an interesting article a while back that showed the gap between people who graduated in 2009ish and those who graduated a few years later.  Employers didn't come back and scoop up the grads they weren't hiring when the economy came back, they scooped up new grads.

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