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Most Millennials are not on track when it comes to saving for retirement (cnn.com)
78 points by knuththetruth 7 months ago | hide | past | web | favorite | 137 comments

> 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.

> 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?

Keep in mind ridiculous house prices are only in a handful of cities. The rest of the country exists and is doing just fine, thank you very much.

I live in Houston and made $75k right out of school as an IT consultant. I lived in the cheapest apartment I could find in my favorite Houston neighborhood -- a place with a lot of art and nightlife. Despite it being a happening place, it only cost $700/mo in 2012.

I was a big fan of the finance blogger Mr. Money Mustache and lived cheaply, on about $30k/yr. The rest of my salary went towards paying off my relatively low school debt, then I funneled it all to my Roth IRA, 401(k), and ESPP. After maxing that out, I bought taxable investments too.

My goal was to retire in my mid-30s after making an average developer salary. From 2012-2015, my net worth went from -$30k to $150k. It's still rising, but not as quickly because my fiance doesn't have the same crazy ideas about money that I do.

I bought a 3-bedroom townhouse in a nice neighborhood right near downtown. I can easily afford it and I'm not even making 6 figures yet.

Good reminder about home prices around the country — my perspective is certainly skewed by my background in biglaw, where top salaries only exist in expensive markets. In tech, things are different — especially for those who can work remotely.

Not sure about the US but in Europe most of the cities where good jobs are have daft house prices.

I'm assuming those are IB, Consulting grads at top undergrad business schools along with top undergrad engineers from the top 20. All three are raking in 100k+ starting at 22. Some of us also have parents who live close enough to major cities so saving on 1-2k a month on rent. There's a massive split in the millennial. There's a 0.1% who have parents rich enough that nothing matters, the 9.9% who are snapping up the competitive professional jobs and the 90% who are just trying to survive and start a career.

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.

> 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.

Wow, that is brutal. I'm guessing common law state? Even then, shouldn't you have 50%? Was it attorney expenses?

Please see my response above, I wasn't clear in my original post, my apologies.

Well, another obvious takeaway is that even if you're "very good at saving" a divorce can still wipe it all up... or an illness or accident, and several other such emergencies...

True, true. I mention divorce since marriage is a risky behavior which leads to terminal conditions in more than 50% of the cases contracted. ;)

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?

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)

>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.

Why? Standard of livings can be preposterous and dependent on previous economic status (which might not be the same post divorce -- and in many cases it isn't).

The court doesn't care for the millions of kids who fall on standard of living without a divorce (or even while having been had out of wedlock), or who start and end on a low standard of living to begin with. Why should it care for the "same standard of living" in the case of divorce?

A decent standard of living (housing, food, etc) yes. But "maintain" the pre-divorce standard of living is BS.

Take a look at the site that was posted in some of the comments[0]. A choice quote:

"Should the guy have to pay that much as a result of a casual encounter? Wagner says emphatically yes: "The child had nothing to say about being born or the wisdom of a one-night stand. That child should be supported exactly as if those parties had married and stayed married forever." Is he worried about an incentive structure where a one-night stand is more lucrative than going to college and working? "A judge would slap you silly if you pointed out that a plaintiff would be earning more from child support than from attending college and working," Wagner says. "Put yourself in the diaper of the child. Public policy says that he or she has a human right to be raised in the lifestyle of the two parents. If you don't like that philosophy get the hell out of California." Wagner explains that the current law came about because "California was ranked 45th in nation in late 1980s in the amount of child support obtainable. The legislature was astounded and created the current system. It is public policy that California will always be ranked among the top 5 states [in potential profits from child support]."


>"A judge would slap you silly if you pointed out that a plaintiff would be earning more from child support than from attending college and working," Wagner says.

They might "slap you silly", but they would still be wrong. And not everybody "attends college" or works cushy enough jobs...

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.

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.

You can set it up different ways, but you will definitely have to get a QDRO for splitting up any retirement accounts into two new accounts.

You can try to do the same thing with stocks, where you pay when you vest or sell, or sell on behalf of the other party, but in my case, and I suspect many others, I wanted the cleanest break possible and I settled on a payout amount simply to reduce the amount of communication with my ex-wife that would be necessary to pull this off.

That last part seems highly illogical given the elimination of many of the cost of living reducing factors of having a functional single household with multiple individuals living there.

If you are expecting logic to rule in this domain, you're in for some disappointment.

Edit: I'll give you a concrete example - let's say my ex-wife decides to marry the systems engineer she is dating, who is also a high-earner. In that case, she can sue for more child support because it will move her up a tax bracket.

> Edit: I'll give you a concrete example - let's say my ex-wife decides to marry the systems engineer she is dating, who is also a high-earner. In that case, she can sue for more child support because it will move her up a tax bracket.

This is just incredible. What a naive legal system!

I’m surprised he ended up with anything. Divorces can be financially brutal on men. Even more so if kids are involved :(

I hear that online, but from what I read is that you just split half of your community property. Where's the disconnect?

Also, in my state you don't split assets people had before going into the marriage. Maybe that's just here though.

Those all applied in my case, and I simplified my original statement too much (I lost more than half because that's where I had saved funds that I had to use in the divorce to "offset" the other party's interest). My apologies.

I guess the point I am trying to make is that I don't know if everyone realizes that if you are the only one in the household saving away for the future, that those savings are not "yours" if the marriage ends, even if your ex-spouse was absolutely frivolous with money, they will get half of anything you saved, and speaking from experience, that feeling absolutely sucks and was one that I am still trying to recover from years later.

I'm scared. I'm a big saver and it's always been my goal to retire early, but I'm constantly having to push my fiancee not to throw away money frivolously.

She also makes far less than me because she wants to work in a field where she makes a difference. She could make twice as much, but she chooses not to. We're not going to have kids, and we split chores equally.

It seems messed up that the relationship is going to put me in worse state financially by subsidizing my partner, and on top of that the laws are structured to give her more money (even though she's fully capable of making more herself).

I love her a great deal and our relationship is otherwise healthy, but I'm scared for a hypothetical situation where things go south. Expect the best, prepare for the worst, right?

Look, I'm bitter and angry about my situation, so take this with a grain of salt...

I feel like the incompatibility we had in regards to savings, financial discipline, etc., should have been a much bigger red flag to me. If you are having these sorts of doubts, I would think long and hard before making the commitment that goes along with marriage. If you do get married, and it doesn't work out, just make sure you divorce before the 10 year mark, or you will have no set end to spousal support. If you divorce before 10 years, you will normally pay spousal support for half the length of the marriage (about 4 years in my case). If you have kids, all bets are off and you will likely be on the hook for spousal, child support,(plus half of medical expenses, extra-curricular activities, and child care costs while your ex-spouse works - this is on top of monthly child support), you will be required to maintain health insurance for the children, you may get your wages garnished, you may get Smith-Ostler riders for 12% of any bonus or unexpected income towards more child support, legal fees, therapist fees (very easy to have a therapy order in place for children and/or the parent(s)), etc.

That said, anything you have saved before marriage is yours to keep if you divorce, so there's that aspect to keep in mind.


I did the homemaker thing. The ex was career military, we had special needs kids and I had serious health problems. It was the right thing to do, but I am still trying to get on my feet financially post divorce.

We had a 1950s style marriage where he was the breadwinner. I come from a much more financially savvy and financially conservative family than he did. His idea of what to do with a pay raise: Finance more debt!

I found it completely crazy making.

I never want to be financially dependent on a man again. At some point, I decided the best thing I could do to make a damn difference in the world would be to leave behind my Pink Collar Ghetto aspirations and do any damn thing I want with my life instead of continuing to care about the world while the world doesn't give a flying fuck about me and my bills.

I sometimes wish I could talk some sense into other women. If you need to express some need to care, get a pet.

(No offense intended. I am trying to be sympathetic.)

No offense taken! Divorce is a shit sandwich, no matter which end you are on.

If I may ask, were attorneys involved on either side in your case? I suspect that is the main differentiator between my experience and others that I have talked with that were able to settle on a sane number with their ex.

My ex-wife and I did the homemaker thing too. A lot of my peer group did. I don't think it works these days. No offense intended, but just like you never hope to be financially dependent on a man, I hope to never have a woman that is financially dependent on me again.

were attorneys involved?

No, we had a DIY divorce.

I'm actually a rather skilled negotiator in some sense, though I don't usually say so because I think that gives people a completely different idea than what I really mean. I mean more like diplomat or like the guy in the movie The Negotiator. [1]

We kept lawyers out of it and that meant there was more pie to go around because we weren't giving tens of thousands of dollars to lawyers. That made it easier for both of us to give a little here and there.

My divorce was surprisingly amicable, more so than my marriage. We agreed ahead of time that we were not going to leave either party in a shithole of financial mess. (I sometimes joke that if we hated each other and wanted to make each other miserable, we could have just stayed together. :-P)

I have been to his house once post divorce and met his new wife. His life seems to be pretty okay these days.

[1] https://www.imdb.com/title/tt0120768/

Yeah, I was pretty skilled too, and we had it all agreed to, and then the night before the appearance she decided she wanted $20K for my unvested RSUs and $5K for a house with no community property value because we had used some money from an inheritance she got to replace the AC two years before we split. That's when the attorneys got called, and the rest is history.

Your story sounds like most I have heard where no lawyers got involved. Hell hath no fury like a partner scorned (with a retainer).

Glad to hear that you made it out without exercising Mutually Assured Destruction. :)

You don't need to marry, right? I mean, what is your reason to do so? In your case, I don't see a whole lot of pros and a number of cons.

In the US, there's a ton of variation between states.

Related reading: http://realworlddivorce.com

Thanks for posting this, it's incredibly informative and interesting. If you look at "Scenario 1: Professional Wife and Slacker Husband" in the California section, you'll see a situation very similar to the one I am in, just that the dollar amounts involved are lower, (I earn around $125K, invested about $10K into ex-wife's part time business), the child were both from one parent, and the genders are swapped. In my case the monthly combined spousal and child support that Dissomaster spit out was $3,300.

It's almost three years out, and I still feel hopeless about being able to salvage my life financially.

You have to consider that you are an outlier. I think the problem with most millennials is that they don't have jobs that can afford them to save anything or are constantly in between jobs where by the time you find something you have to pay off additional accumulated debt.

I honestly doubt I am that far off an outlier based on this being HN...

Edit: To be clear, I mean that I suspect that there are a number of high-earning individuals on this forum that have assets like property, retirement accounts, stock options, RSUs, bonuses, etc., and that many in my situation would be paying similar amounts.

Keep in mind that I am talking about divorces involving lawyers on each side. I have no doubt that others make out much better if they have a sane ex-spouse that just wants to move on with their life.

Out of curiosity, where did you live? Did you buy a home?

San Diego, and yes, bought a home in 2006 (smart move!) before we got married. The mortgage, deed, title, everything was in my name only, as my ex-wife (girlfriend at the time) had shitty credit, and zero savings. The house was deeply underwater the entire marriage, up until we split in 2016, when it would maaaaybe break even money if I sold it. I was renting a tiny studio apartment at the time, while still paying the mortgage, plus child and spousal support. I decided to try to stay in the house, since I didn't have the $3000-$5000 it takes for security deposits to rent, and I was hoping that if I could hold onto it, the value would increase to a point where I might come out with some money. I can't afford it at all, but so far I have been able to piece together payments before going into foreclosure, so I guess that's a win.

The thing about divorce that I didn't realize is that making the decision to get divorced in the first place is the easiest and least painful of many choices you will need to make as a result.

Engineer graduates from a Big Ten school can make a solid salary and have a very nice cost of living if they stay in the midwest. If you and your spouse bring in a combined >$150k a year and buy a house that costs <$400k, you can have a good amount saved away by the time you are 32 (10 years of working).

I think you're right. About half my social circle is friends from work (other millennial in the high tech sector) and for the most part they are doing fine. Took a few years to knock out student loans but folks are saving well and buying houses now. The other half are those who had other degrees / no college and probably don't have a job that provides a 401k and I wouldn't be surprised if a majority don't know what an IRA is.

Me and my long time girl friend have been really fortunate, no student loans and high paying jobs for the first 5 years out college. Our retirement portfolios are in a pretty good place right now.

Seems that at all levels of American society inequality is rampant.

The average/median salary for millenials is between $25-40k (the statistics I see vary significantly). I imagine that this article is basically a proxy for the poor wages millenials typically have.

I'm a young millenial in a low cost city in Texas with a retirement account balance over the average by quite a bit. If you have the money to max your accounts every year, its very easy. And I've already bought and sold a house while I maxed out my accounts.

It's interesting to see how folks can live in other areas. Because retirement accounts have so many restrictions, people who anticipate spending $1M-$2M on a house in the next 10 years pretty much ignore them. Of course, these homes (at least ones near Palo Alto) are themselves a good investment, and carry tax benefits similar to (but smaller than) retirement accounts.

Hearing the stories here makes me want to leave!

They may also have employers that match generously, probably uncool companies that actually have to pay people to compensate for their relative lack of hipness.

1:1 matching is almost unheard of now but was normal twenty years ago.

Contemporary jobs provide for "unlimited" (translation: uncompensated) vacation time...no 401k matching...sometimes even a huge copay for health insurance.

I turn 25 in several weeks and my net worth just crossed $150k a month back. I currently make just shy of $80k in Minneapolis.

The biggest recommendations I can give for trying to save more money:

Make yourself work a bit – sock away more than what you would deem “comfortable” and live off the rest. You’ll be forced to really think about what’s worth spending on.

Get a roommate. I save probably $3,000 a year from this alone, and a big plus is that I get along just fine with him.

Spend frivolously on things that really let you have fun or relax – to a point. I like Mexican food, a good gym membership, and quality groceries. I don’t worry about what I spent on these items because I spend next-to-nothing elsewhere.

Start young. I opened my Roth when I was 17 and have maxed it out each year, in addition to maxing our my work retirement accounts the last few years.

Not necessarily. Those statistics would imply that there is a huge number with little to no savings at all which is what the article speaks to. Medians will move towards zero more quickly than means when as more zeros are added to the data set.

A 32 year old has been working for about 10 years. S&P500 has been growing at 10.5% with dividends reinvested for the last 10 years. That means about $3500/yr in 401k contributions would get you to the average account balance. Take into account employer matches and that's honestly not as much as you expect it to be. Traditional wisdom is to put away 10% and employers have started to implement the auto-incrementing auto-enrollment features into their 401k plans that Richard Thaler has been promoting for the last several years.

All good points. My only comment would be that the average age of the people in the study was not 32. That was the maximum age.

Keep in mind compound growth. Over the last 5 years, S&P 500 is up almost 100%.

But don't forget that past performance is not a predictor of future results. It may crash 50% in a month. Don't take growth for granted.

I think GP was making the point that the retirement account balance may be largely due to the recent run-up. You're right of course that it can (and will) go down in the future!

Of course, but that isn't related to the current discussion

My wife's situation may serve as a useful example. She started with her current university employer about 3.5 years ago. In that time, her balance there has grown from zero to about $90k. This is from 401a/403b contributions and employer-matching based on a $125-150k salary and substantial market gains. She even used one of the Vanguard retirement funds targeted at millenial investors.

We're actually gen x and have other retirement assets I'm ignoring here. But, this account illustrates real world performance that any number of tech workers could have reproduced in the same short time period. Not only that, but many are at an age where they could have been making contributions for 10-15 years now, rather than just 3-4...

I save at least 15% of my salary and I live in a moderately priced city(Minneapolis). For me the biggest reasons for having a large 401K is starting early, the employer match, the S&P 500 performing well and the lowish cost of living, and of course a solid salary.

Roughly $700K between my wife (ex-bond-trader) and me. We are a couple years past 32 but had about $600K then, at which age I'd already quit my Google job and she'd quit her finance job.

I'm probably pretty unusual, but I'm 25, living in a high cost of living city (Boston), and have right around 200k saved right now between retirement and taxable accounts. Started at -15k out of college. High salaries around here definitely help, as does being relatively careful with money (though I don't limit myself much). I do plan to buy a house in 5-10 years, most likely in a lower cost of living area, ideally in cash.

Is Zuckerberg a millenial?

He's now 34, though the study was released earlier this year and carried out sometime before then. But it would be very unlikely that he would have been one of the respondents in the study :)

Edit: apparently based of census data from 2014, so yeah he could be in there!

I had saved up $100k at 23yrs old while living and working in Detroit and I started working at 19yrs old. Tons of folks in SF today with over a million saved at 32yrs old.

So over 85% of millenials saved less than $20,000 for retirement?

The majority of workers under 32 have not worked through a bear market yet, let alone lost a significant chunk of savings to one.

In in the UK my pension deposit is 24.5% of my pre tax salary that said this isn’t money I can touch for an emergency.

That's always been my objection to pension arrangements in the UK. It's a cushy deal between the Government and financial institutions to lock-away money for 30+ years, and then tax the contributor when he becomes eligible to access it.

Pensions should be tax-exempt at withdrawal, or else be accessible. Otherwise what's the incentive, other than when pre-tax contributions are possible?

I agree, luckily I'm not a British citizen but as there is a tax agreement between the 2 countries I can move all my pension contributions outside of the UK without any tax.

The pension tax deduction is also pretty poor and for every pound you earn above 100K you are losing your allowance which also infuriates me.

Or they have trust funds, inheritances, profited from dead parents home sales, etc.

>> 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.

I am 30 and I have about $140k in 401k.

EDIT: Why the downvotes? I'm just affirming with a datapoint. There is an extreme inequality in America and I'm willingly acknowledging that.

I didn't downvote, but assume it's because one datapoint is not meaningful, and it comes across as immodest.

CNN really loves to write about Millennials and retirement: https://duckduckgo.com/?q=millennials+retirement+site%3Acnn....

My favorites are: https://money.cnn.com/2014/05/02/retirement/retirement-mille... https://money.cnn.com/2015/05/06/retirement/retirement-savin...

written almost exactly a year apart and contradicting the other articles

> "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.

At 32, I would have had very little saved. I was finishing my second Master's degree about then and had worked for a few years but most savings from that first job were burned in grad school and I had gained a bit of debt in the process.

I bought a house 10 years later and have generally done a decent job of saving money but, depending upon your priorities, education choices, etc., I'm not sure that not having saved money for retirement in your 20s (except perhaps to the degree that you're forsaking 401k matching, etc.) is automatically a sign of poor money management.

And what do you suppose is the real issue?

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".

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.

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.

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.

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.

>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.

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.

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

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.

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.

Yup. Late 30s here, pretty decent chunk of savings, and still don’t expect to ever be able to retire in anything approaching comfort.

Social security and Medicare will be gutted by the time our generation reaches what was once considered retirement age. There’s no longer such a thing as a pension unless you belong to a public sector union. Agism makes me concerned about being able to stay employed past the next 10 years.

And that’s all still assuming that automation-related unemployment and growing inequality don’t result in extremely destructive social unrest that tears the economy to pieces. (Or that it doesn’t collapse in on itself due to inequality leaving the masses without the disposable income needed to sustain a consumption-based economy.)

It doesn't matter if you choose retirement, retirement will choose you. Do you honestly think you are going to be applying for jobs when you are 70? They'll give you a lollypop and send you on your way. Its bad enough in tech when you are over 40.

Mid 30s my self, I have cash in the bank of more than a year's worth of my current salary BUT, zero saved for retirement.

I do not own a home, but expect to convert most of that liquid savings if the opportunity does arise.

I do not make enough to qualify for owing a home in the area I live.

I also don't anticipate growth in the markets long term over the period of my life to retirement; I fully expect the unfinished recession will need to show a bug ugly period again with an ACTUAL market correction and I foolishly hope we'll finally stop chasing bubbles after that because it will be politically untenable to not FULLY socialize retirement and (at least basic) health-care costs.

> I have cash in the bank of more than a year's worth of my current salary BUT, zero saved for retirement

Just out of curiosity, what's the difference between money in the bank and money for retirement? Should the retirement money go into a dedicated (investment? pension?) fund? Can't they be your savings that you manage by yourself?

I'm asking since I was raised with a different background with pension in Europe being a very different concept from the US.

I imagine they mean not in a retirement account that has restrictions (penalties for drawing money out early) but also has tax benefits

Precisely that, as far as I am aware* (and I am not a financial adviser) the tax code in the US does not understand a mostly or easily liquid account that will only be touched for major life "investments" (such as a house) or during 'crisis' such as medical or employment hardships.

IRAs do have exceptions to the early-withdrawal penalty for just the sort of reasons you note: https://www.irs.gov/retirement-plans/plan-participant-employ...

With limitations on the contributions at once and also on the withdrawal (first time home buyers (semi-ok), 10K USD limit - you call that a down-payment?)...

Yeah this is just some silliness and I don't understand why there are so many different types of vehicles.

It seems like there should be a given list of things that are OK for any tax exempt or deferred use, and I don't see why artificially limiting the case of that use is a good thing for society.

The exception should be based around one of two concepts. Either "investing" pre-tax, and being taxed when pulling from the pool, or post-tax and being allowed to spend for allowed uses without any tax. Any profits should be forced to go back in to the same type of pool. Given the fact that taxes are assessed at some point, transferring (at current taxes) from the not-yet-taxed pool type to the already-taxed type should be allowed.

Risk/rewards. Banks implies low risk investments that also have low reward. You need some of this as emergency backup - if a big bill comes in. (Big bill could be unexpected like a job loss where you have to buy food from savings, or could expected like where you are putting a little extra away for a vacation)

Investment/retirement implies long time, you can afford to take a large risk because the reward is worth it long term. Stocks historically average 10% any 20 year time, but in that 20 years there are some years where they drop 20%. It works out in the long run, but you better not have near term savings in there because you can't know for sure that your money will be there.

If the market does crash the way you think it will you can make a killing betting that it will crash. I almost bought a bunch of puts during the last recession but did not pull the trigger cause i did not know enough then.

Only if I predict the timing exactly right. I don't trust my self to do that.

I admit if you want to get mega rich you need timing and a big risky bet, but during the last recession there was a decent period of time when the writing was on the wall and there was plenty of time to get into profitable short positions. I very clearly remember oil being very high even after lehman collapsed etc.

If i remember correctly you had 6 months before the crash.

Would you consider the writing to be on the wall today?

No not even close to like it was back then. Literally every major media story was in total panic (not just the financial websites). Layoffs at almost every company were already taking place. Massive banks were on the brink of failure and still there were plenty of short opportunities in the market.

I quickly looked at the oil chart and looks like oil was still above $100 when lehman failed. It dropped way down to like 20's.

This is a dangerous attitude, you should still cut 1-2% from somewhere, and put that away. It will compound up and cover you some day.

I’m much older in my mid 40s and because of $poor_life_choices, I don’t see retirement on the horizon anytime soon. Luckily, as a software developer, I make a good salary, I like what I do, and I’m okay with a life of semi-retirement where I would do consulting/contract work part of the year. I would get family benefits through my wife even after she retired from her government job.

Slimey technique to drive traffic to their ad riddled site. Just keep rehashing bs and out a clickbait title on it. Profit.

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?

> 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?

The problem is the way social security is funded is a ponzi scheme. The numbers don't add up, which means something will be done in the future. A part of the national debt it social security.

What the something is I don't know. There are lots of options. It is entirely possible that the younger generation realizing that the money isn't there will decide to scrap it. It is possible that taxes will be raised to pay it off. Maybe the government will borrow money to pay for it. Maybe benefits will be cut (this is already happening via inflation, but the effect is small). Maybe the retirement age will be raised. I don't know what will be done, but something will have to happen.

As you said, anything can happen in 30 years.

> And people want to tell me they know what's going to happen with Social Security?

No, they are telling the exact opposite, that they do not know what is going to happen to social security. So they are not confidant that they will receive it because they do not know what will happen to it.

Right. But that's not saying anything. You could apply that statement to literally any aspect of government, but nobody does. They apply it specifically to Social Security. That's no accident. That's the result of a direct, targeted FUD campaign against Social Security.

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?

> 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.

>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.

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.

Any politician who even hints at getting rid of Social Security will find them self unelected quickly. Old people disproportionately vote. It won’t go away.

The real question is: will I be able to retire on what little SS will provide, and the answer is likely no, given how little it is nominally, plus inflation.

> The real question is: will I be able to retire on what little SS will provide

SS is a safety-net pension, not intended to be a good retirement on its own, only to mitigate (not even eliminate) poverty should other retirement arrangements fail.

So, yeah, unless your standards are really low, you don't be able to retire on it alone. But that's pretty much by design. It wasn't designed to replace employer pensions.

The form of this argument is very popular wrt to the minimum wage, too. But setting aside the claim's veracity -- obviously, people had conflicting desires and intentions even at the time -- it's not a very convincing style of argument. We can make these programs whatever we want them to be. I'm not sure why I'm supposed to care very much about the intentions of the people who happened to write the original law.

Even if it happens to be true (and, again, it's not clearly true), it's not a very interesting discussion (outside of a history course) and certainly not one that helps us navigate the best path forward at the present time. Your own references to employer pensions demonstrate how totally irrelevant the original intentions now are, since such pensions have waned in influence significantly in the intervening years.

> The form of this argument is very popular wrt to the minimum wage, too.

I've never seen it; it's pretty clear that minimum wage isn't a fallback in case of private arrangement failure (that's welfare, not minimum wage.)

> We can make these programs whatever we want them to be.

Sure, we could make a general universal first-resort pension. SS has never be designed to be or marketed as that, so you shouldn't expect it to be. (That's orthogonal to whether you should reform it to be one, or replace it with one; a portable, universal, public, actuarially sound defined benefit pensions is, IMO, a great idea.)

> I'm not sure why I'm supposed to care very much about the intentions of the people who happened to write the original law.

I don't particularly care what you care about. The discussion was over various perspectives of the decline of social security, starting with whether it would fail to be there—it was then suggested that it would for political reasons, but the real question was whether it would be an adequate retirement. I was pointing out that the fact that it was perceived as unlikely to be should be unsurprising and not a sign of decline, since it never had been in the past and was never deisgned to serve that purpose.

Re: your last paragraph, I'd say fair enough :)

Re: the form of the argument as it applies to minimum wage, it works like this:

Argument: "Minimum wage isn't enough for a family to live on!"

Response: "It was never intended to be enough to live on. It's for teenagers, etc, etc."

Note that this path leads us away from all the interesting questions about the minimum wage and into an argument about what lived in the hearts of the people who wrote the original law. That's the inevitable result of this kind of argument and the thing I'm objecting to.

I feel basically the same way. I think I'm saving a bit more than average for my generation, but that doesn't mean much since the average is so low. My wife and I are both making decent salaries, but we started late and both have heavy student debt, and when it comes to deciding to start a family, we're feeling stressed from the conflict between advancing age and not yet being financially comfortable.

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

Just to provide a reference...


It’s about $45K for a 35 year old.

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.

I, too, pretty much had nothing at that age. I hadn't had the sort of life that actually allowed for such things - between lowish paying jobs and a severely mentally ill spouse who gave me a gift of weird financial insecurity (no telling if I would have money one day to the next), my 20's weren't the best for that sort of saving.

Heh. I don't have anything now either, but to be fair, I'm now a seasonally working spouse in a different country than I lived then :D I'm not so worried about it. Even if I'm poor, I'll be OK.

I hope you mean the stock.

No, take a loan and buy the Apple.

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.

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!

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?

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.

>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.

My impression is other generations at this age also hadn't exactly been saving a lot.

I would have fallen into that bucket when I was that age. Hey, I wasn't always a highly-paid software tech. I expect to retire comfortably with a couple million, and I didn't hit the startup lottery. (One or two that paid off very modest five figures, and late-90s MSFT options.) After a point, it's time to start putting some money away, and after 35 you can pull it off if you're aggressive. We haven't always maxed our 401Ks out, and missed other opportunities, and we'll still come out okay.

But that's for you tech bros and sis's making bank. I don't know what Mr. and Ms. Median-US-Wage are supposed to do.

Supposed to die quietly without disturbing others.

Previous generations were much less likely to have crippling student loans, for one thing. So they weren’t starting in the hole.

Which, if you're a Baby Boomer, is a rather more serious issue. It's one thing not to have saved much of anything for retirement in your 20s. It's another not to have saved anything by your 50s or--for that matter--if you're already retired.

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.

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.

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.

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

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.

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?

This thread is a wake up call for me.

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

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

From the sale of my company.

Realize that you're one of the lucky few.

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