Web Wealth:
Retirement could be dicey for debt-laden and risk-averse millennials - the generation that started coming of age around the turn of the century. But there's some hope.
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Retirement could be dicey for debt-laden and risk-averse millennials - the generation that started coming of age around the turn of the century. But there's some hope.
"Retirement coach" Jacob Gold writes in this USNews.com post that millennials looking at retirement - three decades away or more - know they won't arrive at that distant horizon with a safe company pension. They need to be putting money in 401(k)s, taking advantage of any matching funds their employers put on the table, and investing the savings aggressively. "Millennials are saddled with more debt, more uncertainty and more rules and regulations than their parents ever faced. It is important for millennials to remember that retirement planning is a process, not a prize at the end of a 30-year career."
Coming of age through financial crises made young people risk-averse and conservative with their money, writes portfolio manager Patrick O'Shaughnessy in this MarketWatch.com opinion piece. "Surveys suggest that millennials who have investment accounts prefer the apparent safety of cash to the apparent risk of stocks. But cash isn't going to get anyone to a secure retirement," says O'Shaughnessy. What will? "Double-digit savings" and investing in the global stock market. With real estate and Social Security looking shaky, younger workers need to realize there's nothing more risky than depending on a future funded by cash under the mattress.
Some millennials are saving early and often. Forbes.com reports that one survey shows a subset of young adults - those "working full- or part-time in a for-profit company of 10 or more people"- is socking it away, "with 74 percent starting to save for retirement at an 'unprecedented' median age of 22, or 5 years sooner than Gen Xers and a staggering 13 years sooner than Baby Boomers."
The survey noted in the Forbes post is titled "Millennial Workers: An Emerging Generation of Super Savers." It was published this summer by the Transamerica Center for Retirement Studies:
How will retirement look for millennials? Another study, by the personal-finance site NerdWallet.com, says college debt will push millennials' average retirement age to 73, giving them a decade or so of leisure before death. The post says the current average retirement age is 61. "Each generation is afflicted with distinctive financial ills, but the challenge of college debt is unique to Millennials," it says. The NerdWallet study assumes workers will put 6 percent of income into a 401(k). Increasing that to 10 percent would drop the expected retirement age to 69.