A Millennial’s Vision of Retirement

Are you a Millennial? If not you, are your children? The answer is yes, if born between 1981 and 1997. The experiences of the Millennial generation are and will be vastly different from the Boomer’s, with one exception. Will this generation prepare better for retirement?

Millennials: The first generation who cannot fathom life without Google searching for an answer. They’ll never wait by the mailbox in anticipation of their favorite magazine, newspaper, or letter from a pen-pal, or wait at home by the phone for their loved one to call. In the morning, they won’t read the Wall Street Journal, with coffee in-hand, to review their favorite stock quotes. Instead, they will wake-up, check their email, review their Twitter feed, and shoot a 5-hour energy drink all before brushing their teeth. They are different. They are millennials.

Imagine, by age 10, having seen pictures and video of the most beautiful places in the world and knowing exactly where you want to vacation. The internet has allowed this generation to see, connect, and communicate with the world in the palm of their hands. We shame them for being impatient and demanding immediate knowledge of information, but can we blame them? That’s all they know. They are millennials.

Retirement Reality and Concerns

So as you could expect, the Millennial’s idea of “retirement” is much different than previous generations, but their lack of planning and preparation creates the same cause for concern.

Millennials want work/life balance, location independence, and a love-what-you-do job. The utilization of technology has allowed them not to be tied down to an office desk when working. Having multiple jobs at one-time is not seen as an unfortunate circumstance, but instead viewed as a talented, innovative person with flexibility in their lives. The idea of working a stable job for thirty years does not excite them.

However, there is a problem, a big problem, they might not understand today. With a mountain of student loan debt and a post-recession, lower paying, love-what-you-do job(s), many are (happily) sacrificing and living paycheck-to-paycheck. But, with Social Security in question, no pensions, and often no employer retirement plan match due to job independence, their ability to save can be difficult. Oh, and yes, they are going to live longer as well.

In fact, JP Morgan’s new report on Millennials and money noted that many will have to finance retirements that are longer than the number of years they work. Right now, young Millennials are open to working later in life, but what happens when their skills diminish or a younger generation, or software, can replace them? If Baby Boomers thought job skills diminished from technology advancements, imagine where “unimaginable” technology might be thirty years from now and how that may impact aging Millennials!

Fear and Advice

My fear for Millennials: For them, saving money is correlated to the stock market. And as a generation who watched their parent’s retirement savings decline through the Great Recession, their excuse for not saving will be due to stock market instability. And the one’s who do save money may invest too conservatively.

My advice to Millennials: You should always have a Plan B. Not everything works as planned. Save for retirement even though you want to invest everything in yourself. Don’t be afraid of the stock market, as the money you are saving isn’t meant to be spent for forty years. The good news, it’s certainly not too late to save and time is on your side.