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tony

Millennials Want To Retire Early But Save Little

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A recent Bankrate.com survey asked millennials, classified as Americans ages 18 to 37, what the perfect time to retire would be. Their answer: 61 years old. 

Of those millennials already saving, the median retirement account balance is about $19,100. But overall, roughly two-thirds of millennials have nothing saved so far, according to a February report by the National Institute on Retirement Security. Read more here:

https://www.cnbc.com/2018/07/17/ideal-retirement-age-for-millennials.html

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These types of reports tell me nothing! For example, quoting in the executive summary: "However, this generation is viewed as less financially savvy than previous generations when it comes to saving for retirement, budgeting, and establishing and maintaining a financial plan.3 Specifically, Millennials are characterized as spending too much money on unnecessary expenses."

Are they suggesting that my generation is more financially savvy? You have got to be kidding! Boomers are the biggest borrow and spend generation in history! We are not role models, and we elected politicians to do the same thing with the government. 

Just like any generation, some get it right. I like to think that some Millennials also get it right. For example, some do not use the word "Retirement" as they opt for "Financial Independence (FI)." Get used to it, as the FI community is a growing powerhouse. As I have mentioned before, one of their rock stars Vicky Robbins who wrote the best selling book "Your Money or Your Life" was on the front cover of Money Magazine last spring and has been on many TV shows, magazines, podcasts, blogs over the years including Oprah. Vicky and her late hubby started in the late 60s, they are the "grandparents" of the FI community. They ABSOLUTELY LOVE HER WORK. 

I hope some of our younger teachers find out about this wonderful community. BTW, I am told there are still openings for the Joshua Tree CampFI right here in Southern California: https://www.eventbrite.com/e/campfi-southwest-2018-aug-03-06-2018-tickets-43465342008 . 

Our educational colleagues have something that many of in the FI community do not have, a Pension Plan. So technically, our young teachers started saving right out of the gate (thanks to the mandatory pension plan contributions from the teacher and their employer). Of course, they cannot tap into it until they accrue so many years of service and they need to be old enough but it is still an ASSET!  So if our young teachers also start saving in a 403b they can get to FI a lot sooner than the usual 65 years old. School boards are always looking for ways of getting older teachers to retire, so they can hire young teachers at starting salaries. Yeah, its cold, but what is wrong with retiring earlier than usual NOTHING.

My pension plan says any teacher with five years of service or more can get a retirement benefit (five years service will be a small benefit, but it is an ASSET that lasts a lifetime!). 

Steve

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3 hours ago, sschullo said:

Are they suggesting that my generation is more financially savvy? You have got to be kidding! Boomers are the biggest borrow and spend generation in history! We are not role models, and we elected politicians to do the same thing with the government. 

 

I guess they assumed we have learn from our mistakes and millennials are just starting to make the same mistakes.  It just sounds to me like they are following in our footsteps LOL.

 

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4 hours ago, sschullo said:

"However, this generation is viewed as less financially savvy than previous generations when it comes to saving for retirement, budgeting, and establishing and maintaining a financial plan.3 Specifically, Millennials are characterized as spending too much money on unnecessary expenses."

You left out the next few lines, "Yet, as Bank of America details in their 2018 report, these perceptions may be as outdated. Millennials are saving at the same rates as Generation (“GenX”), more Millennials have a savings goal than other generations, and Millennials feel more financially secure than GenX."

Older generations like to trash Millennials, often based on second/third hand anecdotes, without any statistical data, and with inaccurate hindsight of their own generation.

When it comes to financial matters, I think Millennials are increasingly coming to the conclusion that the economy is built to perpetuate and exacerbate income inequality, meritocracy is a myth, and companies view them as nothing more than a line in a spreadsheet. Everybody I know who is striving for financial independence buys into these ideas with varying levels of conviction.

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Ed,

I guess you are referring to me. As you probably know, but others may miss, while it says "sschullo said", I did NOT say or write that quote that Ed highlighted. I copied the article from the biased article. And yes I did see the other part of the report from BoA. I hope BoA is more accurate. I am very fond of Millennials for the reasons you state. I am going to one of their CampFI conferences. 

Steve

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1 hour ago, tony said:

I guess they assumed we have learn from our mistakes and millennials are just starting to make the same mistakes.  It just sounds to me like they are following in our footsteps LOL.

 

I hope not because our generation has backtracked on some many social issues that should have been settled fifty years ago. While society is better, we should be a lot further developed IMOH. Only time will tell how the Millennials will turn out. 

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1 hour ago, sschullo said:

I am very fond of Millennials for the reasons you state.

Oh I know that and we appreciate it 🙂. I was just speaking generally.

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