
Most Millennials are not on track when it comes to saving for retirement - knuththetruth
https://money.cnn.com/2018/03/07/retirement/millennial-retirement-savings/index.html
======
gnicholas
> _Most have less than $20,000 but some have much more. The average account
> balance is $67,891_

It is amazing that the median is under $20k and the average is nearly $70k.
This means there are some folks with very large retirement savings that are
pulling the average up a lot. Considering this only includes folks up to age
32, this is really surprising. How much do these savers have socked away?

Even when I worked in a big law firm, I didn't put that much in my retirement
account because I was mostly saving to be able to buy a house (in the Bay
Area). I can't imagine who these millennials are that have so much in a
retirement account — presumably they also live in expensive areas if they are
able to earn so much?

Edit: Glad to see all the responses, including from folks who have healthy
retirement accounts. It would be great if you could share where you live and
whether you have bought or are planning to buy a home.

~~~
dsnuh
It was 10 years ago that I was 32, but at that point in time I had over $100K
easily in my 401K. By the time I divorced three years ago, I had over $200K in
there.

After the divorce, I have about $20K left after having to split it with my ex-
wife, who had saved a grand total of $2.00 during our marriage.

I don't really have a point, except that some people are very good at saving,
even from a young age, and some people will never save a penny. The key is
starting young. As soon as you are able to contribute anything, even 1%, you
get the advantage of compounding interest over time, which is the key.

~~~
asdfman123
How does that math work out? Why didn't you get at least half of it? Did you
get full ownership of the house or something?

~~~
dsnuh
Sorry, I was sort of vague here. Basically, I had to give $105,000 (half) of
the 401K to my ex-wife, I had to pay her out for potential values of my stock
options and RSU's (have fun valuing those!), I had Smith-Ostler riders
attached to any bonus income, I had three more years of spousal support ($1800
per month), legal fees to pay, etc. I used the 401K to pay these things, so
technically, I did get half, I just had to immediately use it to pay it all to
my ex-wife.

Yes, I kept the house, which was my separate property with a community
property interest, since it was purchased in my name only before we were
married. I cannot afford the house, so I am trying to play the foreclosure
avoidance game and give my kids a nice place to live that provides them with
some continuity.

I also had $1700 in child support (this is two kids, with a 60/40 custody
share) that I offered to give her more money in the settlement if she would
agree to $1400 instead. She agreed to that, and then before that judgment had
even been processed, had me back in court to get $1700 per month, which she
did, since the court will use whatever Disso-Master spits out. She owns her
own business, and of course her personal and business accounts are mingled, so
there is no way to pinpoint what she actually makes, but it was at least
$3,500 per month part time when we were married.

But none of that matters if you earned a lot more than your spouse. Divorce is
no joke, especially if you are the high earner in the relationship. A lot of
people are under the assumption that if you split custody, you don't pay
support or the support is a nominal amount. This is absolutely not the case.
The court (in CA, at least) looks to maintain the children's standard of
living DURING THE MARRIAGE until the child is 18 or emancipated. This is the
case even if your divorce left you in very different circumstances.

That's just child support, which is only one of the many costs associated with
divorce.

(I want to make it clear that I have no problem with paying _reasonable_ child
support, but I'm sorry, the current child support calculations can leave you
with an egregious amount of support payments)

~~~
closeparen
Divorce entitles you to immediate liquidity on illiquid assets? That’s crazy.
I’d understand 50% on vesting. Unicorn employees tend to have more than twice
as much illiquid stock as they have cash.

~~~
dsnuh
How it works (unless you settle for some amount, which I did, which ended up
biting me in the ass when our stock took a 30% haircut, but I digress...) is
that there is a community property interest in all assets earned during the
marriage, regardless of future vesting schedule. It's all based on when the
options were granted, when they vest, how long you worked there, etc.

If you have RSUs, you get to go through the fun process of either giving some
value to these RSUs and paying off the other party's community interest in
that valuation, or you can try to argue that RSUs have a zero dollars value
until granted. Good luck with RSUs and stock options either way, as it can
become a complicated mess of laws and formulas.

------
blang
CNN really loves to write about Millennials and retirement:
[https://duckduckgo.com/?q=millennials+retirement+site%3Acnn....](https://duckduckgo.com/?q=millennials+retirement+site%3Acnn.com&t=hi&ia=web)

My favorites are: [https://money.cnn.com/2014/05/02/retirement/retirement-
mille...](https://money.cnn.com/2014/05/02/retirement/retirement-
millennials/index.html)
[https://money.cnn.com/2015/05/06/retirement/retirement-
savin...](https://money.cnn.com/2015/05/06/retirement/retirement-savings-
millennials/index.html)

written almost exactly a year apart and contradicting the other articles

------
kcorbitt
> "I see in practice that a lot of us are putting retirement down the goal
> priority list, in favor of paying off student debt or buying homes,"

If that's the actual reason why retirement savings are low, then this sounds
more like a paper crisis than a real one. If you're putting $30k a year
towards paying down student loans or home equity, then – assuming nothing
changes – eventually you're going to "fill" those buckets and start saving
$30k a year for retirement, which over the course of a normal career should be
plenty to retire.

That said, I have my doubts that millenials' low retirement savings as a group
is really because they're saving in another bucket.

~~~
mrhappyunhappy
And what do you suppose is the real issue?

~~~
seangrogg
Not the parent, but I'd imagine that the real worry is less "they're just
paying down loans" and more "once those loans are paid they still won't be
contributing towards retirement".

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sigfubar
I'm 32 and have enough cash on hand to last ~3 months in case of unexpected
job loss, but that's all. "Retirement" isn't something I expect to be able to
do.

~~~
prolikewh0a
I am exactly the same @ age 27. I have an emergency fund, but living in USA in
2018, retirement isn't something I expect. I expect nothing like what my
grandparents experienced (all unionized, large pensions, SSI). I fully expect
to be working until I die (not by choice) unless some massive union push
happens, and I'm very skeptical that it ever will.

I'll probably never own a home.

My future is pretty bleak, but I feel like that's the general millennial view.

~~~
2trill2spill
Why so pessimistic? I'm about your age and I very much expect to retire and to
retire well and to make sure that happens I have short, medium and long term
financial plans and goals set for my self.

~~~
prolikewh0a
I see workers rights being crushed even further every year, and a new Lochner
era is probably about to begin with the Republican majority Supreme Court.

I haven't seen anything get better economically since I was born. I watched my
grandparents lose their home & lose all economic security because their
pensions and union payouts were crushed, their social security hasn't seen any
reasonable increase in a long time.

I just see things going downhill and never getting better because that's all
I've ever experienced.

~~~
2trill2spill
>I see workers rights being crushed even further every year, and a new Lochner
era is probably about to begin with the Republican majority Supreme Court.

That's vague and doesn't have any specifics so can't really comment on that.

> I haven't seen anything get better economically since I was born. I watched
> my grandparents lose their home & lose all economic security because their
> pensions and union payouts were crushed, their social security hasn't seen
> any reasonable increase in a long time.

So your grandparents had it tough in their retirement years so you and
everyone else has to have it tough economically?

> I just see things going downhill and never getting better because that's all
> I've ever experienced.

So your 27, still early in your adult life and you have given up completely?
Sounds like your setting your self up for a tough life. Do you not have plans?
A career you want to excel in? Goals? Besides, being a union member or having
a pension is not needed to retire comfortably. The S&P 500 index is up over
1000% since you were born if you were to reinvest the dividends. Prudent
saving and investing will give you a comfortable retirement. Plus your young
enough that even if you started now you could retire well off.

~~~
prolikewh0a
I do have plans, but I can't carry any of it out because I can't afford it.
College prices are so high now that it's out of my reach, and debt of any sort
scares me. I would like to get out of tech (corporate has ruined this for me)
and peruse Meteorology, but Meteorology presents another problem, there aren't
many jobs and they don't really pay well.

S&P doesn't really help me since I've always been low income.

My grandparents are an example, but with 80% of the country living paycheck to
paycheck, 50% deemed poor or in poverty, 1/5 children in poverty, 60% of the
country hasn't seen a pay raise since the 70's when adjusted for inflation,
and workers rights being crushed daily, it's not just my grandparents, the
majority of the country is feeling it. There's a reason most Millennials are
"not on track", and it's because they have no money.

What do I have to look forward to? I don't have money to invest in my future,
and I'm a very frugal person. Cutting 2-5% to put into some sort of savings
would crush me monthly. I feel like this is how most Millennials feel too.

~~~
2trill2spill
Your in tech, are debt shy but don't have any money? Doesn't add up, or am I
misreading your reply?

~~~
prolikewh0a
I'm not a software engineer, so wages are abysmal. I also live outside of
Seattle to be able to have this job in the first place, so rent is 1/2 my pay.

~~~
2trill2spill
Move, you could find a tech job in many other cities that don't have
ridiculous rental prices. Whats the point of living in an awesome city like
Seattle if you can't afford to do anything? If you had a place here in
Minneapolis you could live in a nice neighborhood and save anywhere from $600
to $1000 a month just on rent based on the average Seattle metro rents. That
doesn't even factor in other cost savings from not being in an extremely
expensive metro area. That would be more then enough money to have fun and
save.

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cix_pkez
In spite of all the statistics that suggest I'm doing pretty well toward
retirement compared to most of my generation, I feel quite a bit of anxiety
about how much I'm saving.

I'm not confident that I'll receive social security. Huge health expenses may
come up.

How do others feel? You're not all billionaire unicorns on this site, are you?

~~~
dionidium
> I'm not confident that I'll receive social security.

This is a common sentiment, but it's a strange one to me. I think it's
_extremely_ unlikely that a program as popular as Social Security is going to
just disappear. Entitlements have alligator blood. They're going to be
_really_ hard to get rid of.

And, anyway, it's pretty foolish to think you can predict what's going to
happen in politics _30 years from now_. 30 years ago the Soviet Union still
existed and nobody had heard of the Internet. And people want to tell me they
know what's going to happen with Social Security?

~~~
peterwwillis
Why would you expect it to continue existing just because it's popular now?
Lots of things that were popular were eventually changed or removed.

The consequences are serious and the time it takes to determine whether it's
worth worrying about is in decades. It's like global warming. If you wait to
find out what happens, it's too late.

In South Korea, suicide rates are high because there is no social safety net.
Old people just kill themselves. If SS gets made effectively defunct, what
recourse will 2/3 of the aging population with no retirement have?

~~~
dionidium
> _Why would you expect it to continue existing just because it 's popular
> now?_

I'd like to turn this on its head: why are you _particularly_ worried about
Social Security? Any government program could disappear in the next 30 years.
So why is your focus on Social Security? Why is this subthread so predictable?

It's because of a deliberate, targeted, FUD-campaign against Social Security
by people who are ideologically opposed to it. Their fears are not genuine.
They oppose the program in _principle_ and benefit by sowing doubt. That's why
you're making this comment in this thread and not in some other thread about
some other government program.

> _It 's like global warming. If you wait to find out what happens, it's too
> late._

I don't think it's generally useful to pick holes in analogies, but this one
is too big to ignore. Social Security is a _man-made_ program. If we want to
change it, we can just change it. At any time. For any reason. I'm not sure it
could actually be any less like climate.

~~~
Avshalom
>why are you particularly worried about Social Security?

because the 1 of the 2 political parties in the USA, the one currently holding
all three branches of the federal government, has been quite publicly trying
to cut it for decades. Even if they don't get it accomplished _today_ they
have another 40-50 years worth of trying before "millennials" hit retirement
age.

~~~
dionidium
Oh, right, so we have to distinguish two things:

1\. One party wants to cut Social Security. This is obviously true.

2\. That same party wants to convince you that it _has to be_ cut or otherwise
changed in significant ways or it will fail entirely -- which brings us back
to #1.

In other words, #1 is driving #2, not the other way around. If you're worried
about #1, then I'm with you. You should be. But this is generally presented as
a worry about #2, which is really just a cynical ploy to get back to #1.

They want to cut Social Security for _ideological_ reasons. But their plan is
to convince you that it needs to be done for _practical_ reasons. It's a
pretty good plan that seems to be working quite well, because a whole bunch of
regular folks who don't know what the word "insolvent" means are sure it
applies to Social Security.

------
bbg215
Everyone viewing this thread is likely an extreme outlier. The majority of
millennials are prob making less than 50K until their 30s/40s.

~~~
scarface74
Just to provide a reference...

[https://dqydj.com/income-percentile-by-age-
calculator/](https://dqydj.com/income-percentile-by-age-calculator/)

It’s about $45K for a 35 year old.

------
Finnucane
I remember how much I had saved for retirement when I was 32. It was pretty
much nothing. Also: note to past self, when it occurs to you that you should
buy Apple at 16, yes, you should, even though you have no money, and hold it
forever.

~~~
deepGem
I hope you mean the stock.

~~~
gnicholas
or the first-gen iPhone, new in box.

[https://www.cultofmac.com/284247/rare-original-4gb-iphone-
la...](https://www.cultofmac.com/284247/rare-original-4gb-iphone-lands-
ebay-15k/)

------
NZThrowaway
This thread got me thinking and thought I'd post. Made a throw away for this
as my real account can be linked to me far too easily... $ are in NZD.

32, living in down south in New Zealand. Working for clients around the world,
mostly in the UK.

Making $150-180K per year.

Bank accounts $15K in NZ ~$50K in the UK account from client payments over the
last few months

Own the house we built for $580K in 2016, it has recently been valued at
$650K. Have a mortgage on that of $320K.

Have another mortgage of $180K on a $260K house split with a friend when we
brought a rental property at the start of this year.

Have about $10K worth of crypto, down from dizzying heights at the start of
the year :D, from a $4k gamble just over a year ago.

I think we have ~$20K in a superannuation accounts, which we haven't put
anything into since I've been working for myself.

Interest rates on the mortgages are 4.19% p.a.

Other than the mortgages we have no other debts. We being my partner and I,
our 1 year old, a dog and 2 cats.

On one hand I feel like we're doing OK. But for the amount I'm making I feel
like we should be saving / investing more.

~~~
nealdt
I have a few kiwi friends and it seems like most of them (and most of their
friends over there) are financially very successful regardless of their
profession and background. Appears to be a very good time to be in NZ!

------
gregrata
So it would be nice if they contrasted this again other generations - "About
66% of people between the ages of 21 and 32 have absolutely nothing saved for
retirement". So? My impression is other generations at this age also hadn't
exactly been saving a lot. Is this just saying the millennial general is just
the same as others? Or way out wack?

~~~
nostromo95
Well, to be fair an equivalent statistic for baby boomers wouldn’t be as
alarming as it is for millenials:

1\. A higher percentage of the population back then were working towards a
pension and didn’t necessarily have to save.

2\. The long-term health of social security wasn’t as much in question back
then. Contrast that to today’s conventional wisdom of “plan like your SS
payout will be $0.”

And there are probably several other factors that suggest millenials should be
_more_ eager to save than their parents—rising costs of college for children,
rising costs of end of life care, ever-increasing lifespans suggesting longer
retirements, etc.

~~~
ghaff
>Contrast that to today’s conventional wisdom of “plan like your SS payout
will be $0.”

In all fairness, people have been saying that for decades.

You're right though that a lot more people used to have defined-benefit
pensions. I'll even have a modest one from a long gone tech employer.
Certainly don't see that much these days.

------
bcheung
I never liked the accumulate and pray you have enough to last model. If you
don't die before you money runs out your plan fails.

Any plan that has death as a pre-requisite to be successful is not a very good
plan in my book.

Acquiring income producing assets seems like a much better plan.

~~~
jpetso
In response of retirement savings, "accumulate" generally does mean acquiring
income producing assets. That's what stocks and bonds are. They just have a
lower risk/reward profile than putting all your eggs into a single owned
company.

~~~
bcheung
Those a generally considered appreciation assets not income producing assets.
You can't extract any value from them without disposing of them.

Income producing assets produce income while you still own them without you
having to sell them.

Dividend paying stocks would be an exception.

Not suggesting putting all your eggs into a single owned company. That's a
separate issue.

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chadlavi
A lot of us aren't even on track when it comes to saving for just normal life.

------
purplezooey
Millennials need to get off their duff and vote. 18% voting rate. One
millennial I recently talked to said, "yeah, I just don't know anything other
than the signs people put up in their yard.". Wtf.

------
gnicholas
I wonder how stats like these will impact home prices in 20 years. Will it be
a buyer's market because there will be lots of boomers downsizing/deceasing,
and not nearly as many buyers flush with cash?

------
sh_123
This thread is a wake up call for me.

What are good resources to learn more about saving for retirement? IRAs,
401Ks, etc.

------
tribesman
I've saved roughly 15 million and gave away 10 million to my girlfriend.

From the sale of my company.

~~~
Grangar
Realize that you're one of the lucky few.

