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With the new class in the US (the buried in student debt class) there will be no savings whatsoever. Baby boomers are probably the last generation that saved money. Generation X'ers will inherit the baby boomer wealth and pay off debt and spend it frivolously. Generation Y'ers will never make enough to invest. We're moving more and more towards complete reliance upon the government.
Maybe true for people with a huge amount of PRIVATE student debt, but with federal loans they can go on IBR and have enough income left after bills to put it into retirement plan(s)
Median earnings for full-time workers for my age group is $40k per year. At $40k per year personal income, it's not that difficult to be saving money. It's not that we're buried in debt and can't get jobs. It's that most people choose not to save what I would consider enough for retirement. That's not unique to millenials.
I have pretty high student loans, borrowed close to $40k between bachelor's and post-graduate certifications. My earnings aren't out of the range of normal. My net worth is that of someone ten years older than I am because of how I manage what I bring in better than most. As far as absolute earnings, I've probably earned less since graduating than most college graduates. I've been out of work completely for over a year, worked part-time for another year, and worked very low paying jobs for a year and a half. I've worked full-time for close to typical salaries for less than half the time since I've graduated. If I'd been making what I make now consistently (which again, isn't out of the range of normal), I would be at six figures for net worth by 30 easily.
Median earnings for a new graduate is roughly $45k/year.
Save 20%, $9,000 a year.
Assume 7% return on investments, not outlandish.
$92k at eight years, $107k at 9 years.
Add in moderate income growth and that I save more than 20%.
baby boomers as a group are one of the wealthiest generations .
the buried in student debt generation has not paid their dues yet . they have many decades to go.
I got out of school in debt right in the middle of the 1970's.
gas lines , high unemployment ,inflation and vietnam were wrecking the country.
the picture looked as bleak as could be.
well 40 years later many of us did just fine and the kids today may turn out just as fine. it is far to early in the game to make any judgment.
Exactly. 40 years ago, if you could get a job, making $10-15k was big money -- and you might have $8k in student loans. I had a lot of scholarships and then got an assistantship for grad school, but I still had like $5k. My first FT job out of college paid $9600 a year.
Quote:
Originally Posted by StAcKhOuSe
24 year old millenial here
i started saving for retirement. got a 401K and an IRA. my goal is to save 5-7K a year. yes, i still have student loan debt(13K). i am also saddled with dental bills this year. how do i do it? i know how to budget unlike most americans, especially people my age. they are too concerned with instagram and expensive smartphones and data plans. you can't make ends meet? have a social life? maybe those idiot drinking buddies are costing you too much money. what about that high maintenance girlfriend? dump her and either stay single, find another girl who aint materialistic, or stick to prostitutes(in the long run, they're cheaper) get a second job, cut expenses, or both instead of bitching about declining wages and china and republicans and democrats and obamacare and minimum wage. sell drugs if you can't get a job. stop watching the the dumbed down, domesday, fear mongering, partisan-biased news channels.
I agree. I hear all this complaining, but the fact is that most young people I know who graduated from college have jobs -- and I live in an economic backwater where jobs for young college grads are harder to find than in bigger places. Some found jobs locally. Some moved to bigger places like Buffalo, NY or Erie, PA or smaller places like Hamilton, NY. Some moved to Elizabethtown, KY and Kilgore, TX. It's NOT 2009 any more, however much some politicians or segments of the news media want to pretend it is in order to advance their own agendas.
i started saving for retirement. got a 401K and an IRA. my goal is to save 5-7K a year. yes, i still have student loan debt(13K). i am also saddled with dental bills this year. how do i do it? i know how to budget unlike most americans, especially people my age. they are too concerned with instagram and expensive smartphones and data plans. you can't make ends meet? have a social life? maybe those idiot drinking buddies are costing you too much money. what about that high maintenance girlfriend? dump her and either stay single, find another girl who aint materialistic, or stick to prostitutes(in the long run, they're cheaper) get a second job, cut expenses, or both instead of bitching about declining wages and china and republicans and democrats and obamacare and minimum wage. sell drugs if you can't get a job. stop watching the the dumbed down, domesday, fear mongering, partisan-biased news channels.
Kudos to you! I'm a 19 year-old millennial, but I'll be out of school by 2018. I think our generation will bring us back on top.
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Originally Posted by mysticaltyger
As I have said in other threads, the problem is the standard that passes for "average" in America is pretty sad.
--68% of Americans are overweight (and then wonder why health care is so expensive).
--33% are obese.
--Americans only save 5% of income, yet there are lower income countries that save much more (like China).
--The average American gets divorced or has a kid(s) out of wedlock.
--The average American blows money on at least on of the following non-necessities: tattoos, piercings, cigarettes, recreational drugs, alcohol, $4 coffees.
With much of the above behavior passing for average, it's no wonder the average American is not doing well financially.
Thanks for posting this. It definitely puts things into perspective.
i got to tell you when i was on those gas lines 40 years ago the thought that we would still be driving cars and not george jetson vehicles today is beyond belief.
even more beyond belif was the fact of here i was on a gas line again after sandy.
With the new class in the US (the buried in student debt class) there will be no savings whatsoever. Baby boomers are probably the last generation that saved money. Generation X'ers will inherit the baby boomer wealth and pay off debt and spend it frivolously. Generation Y'ers will never make enough to invest. We're moving more and more towards complete reliance upon the government.
Not if you were raised by immigrant parents!
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Originally Posted by jamiecta
Please don't make blanket statements. Maybe some of that is true for an increasing % but there are still LOTS out there that do not meet those descriptions in the slightest.
Yes, thank you.
I'm a Generation Y-er, started a business when I was 15 and saved my profits for several years before deciding to buy a camera. Over the past decade, photography has not only brought me immense pleasure but also exciting opportunities and another revenue stream. I am fortunate enough to be educated and [finally] in a full-time role with a 401K, savings, and a new hobby of investing.
On the downside, I have plenty of friends who meet all the stereotypes; I do not know how they sleep, because I almost lose sleep for them.
Why I think I ended up differently:
1. I grew up observing my family's financial habits, which were very good.
2. I learned to enjoy life but not spend money you don't have. (This idea obviously flexes for things such as a home, but it can still apply - don't bite off more than you can chew).
3. Less relevant, but I'm sure it does not hurt: I love numbers, genuinely get a kick out of seeing results (from any effort - financial or not), and am naturally wired to be a planner. I am actually building out my 2014 budget as we speak, haha.
What is preventing Americans from saving for retirement?
Some things that occured in my life and may have impacted others, as well: unexpected unemployment for my husband, who held the health benefits with his job, unexpected car repairs, house repairs and upgrades, medical expenses, increasing property taxes (when we moved to our house, the taxes were $1,200/yr., 20 years later, when we moved they were $8,000/yr, with the star exemption), increasing utility expenses, student loans, increasing car insurance premiums (3 teenagers, 2 adults) all with stagnant wages.
I worked at a civil servant job, but they didn't offer benefits, or paid time off, or sick time, or allow for full-time hours. Most times, I was self-employed as an independent contractor. Nice tax deductions, but now my social security is based on this.
When I did manage to save a little bit, working part-time (28-32 hours a week) in a school district, doing paperwork for free on the weekends, I had automatic deductions for retirement in NYS retirement system. At some points, something catastrophic would occur, and I would have to cash out the savings, with major tax penalities, or at times using credit cards to make up the shortfall for these emergencies. Some purchases to make life easier or to cut down on long-term expenses (refinancing at a lower interest rate, wood stove, decent car to prevent constant repairs and break-downs and loss of income from not getting to work).
Personally...poor money management, short-sightedness in not seeing how cost of living would increase astronomically.
Moved from NY State to a farm...the best decision ever!
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) get a second job, cut expenses, or both instead of bitching about declining wages and china and republicans and democrats and obamacare and minimum wage. sell drugs if you can't get a job.
stop watching the the dumbed down, domesday, fear mongering, partisan-biased news channels.
