Millennials (aka Generation Y) are famous for breaking the rules. Most of them don’t plan to hold a lifetime career, own a house and become parents. The latest statistics show that the majority of millennials don’t believe they will ever retire. According to the National Institute on Retirement Security, approximately 66% of people between the ages of 20 and 30 have nothing saved for retirement. Experts are worried that in 30 years millions of seniors will not be able to support themselves financially. Meanwhile, Millennials stay optimistic and don’t see the problem.
Nowadays investing for retirement in the UK or the US seems more like a dream. These are the reasons that can bring down the whole generation:
Financial insecurity is the major factor that doesn’t allow millennials to save money for retirement. Crazy levels of student loans handcuff people in their twenties. Nowadays the average debt for graduates is over $36.000 in the US, and over 34,000 GBP in the UK. Let’s not forget about 1.1. million Americans who struggle with student loans that have topped six figures.
No wonder, millennials delay marriage. In fact, one-third of people in their late twenties don’t plan to be parents, according to the Casandra Report: Ages and Stages in 2017.
The student debt feels like an albatross around the neck, so millennials try to pay it off as soon as possible. However, 73% of college graduates struggle to find a job related to their degree, according to the data published by the Washington Post.
Furthermore, the cost of living has gone up. Instead of improving financial literacy, young people increase their credit card debt. According to GenForward report, 46% of people under 30 will not be able to pay off their credit card debts within the next two years. It’s not only about lifestyle creep that empties their pockets. The recent Bankrate study found that Millenials spend more on bills than previous generations, let alone vacations. It is difficult to rely on one primary income nowadays, so they use credit cards for paying bills. To start saving for retirement, young people need to overcome their financial burden in the first place.
Millennials drastically differ from Generation X (people born from 1960 to 1980). The world became faster due to technological progress. We can get tons of information by one click, transfer money internationally and travel to another continent in less than a day. Basically, Generation Y is not used to waiting. They want to have it all and now. That’s why they don’t want to wait for the magical day in the future when they will be able to stop working and enjoy themselves.
Despite the number of mils who can barely make ends meet, 76% of young people nowadays are pretty optimistic about their future, according to research from Charles Schwab. 21 century is full of examples of successful start-ups run by millennials. The advent of the Internet took capitalism to a whole new level. It is not a problem to find your customers because now they are all online. Millennials are aware of this and secretly hope that one day they will build their own businesses and become financially free.
There is a lot of relentless pressure put on young people. From one side, they need to save money, pay bills and debts. From another side, they value experiences, flexibility and virtual collaboration. That’s why there are so many freelancers of all kinds, Youtube vloggers and Instagram travellers. Millennials are eager to learn and work, but they want to do it on their own terms.
As you can understand, it is difficult to force young people to stay in the same company, apartment, or city for more than two years. It also explains why everyone rents apartments instead of buying their own. So, how can millennials plan their retirement if it runs counter to their ‘beliefs of living today’?
Millennials can’t plan ten years ahead because the future of the job market and the economic world situation is uncertain. For instance, estimations are suggesting that Social Security will run out in 30 years.
Generation X didn’t have jobs such as app developer, social media manager, youtube vlogger, or user experience designer etc. We already live in the sci-fi realm; we just haven’t realized it. The main task of millennials is to adapt and learn quickly so that they will not be replaced by artificial intelligence.