My sister-in-law, Malu, is the baby of the family. We love her to death, but she’s a walking stereotype of a millennial.
Well, sort of. She has no face tattoos or stretched earlobes, and I don’t believe she subsists on a diet of avocado toast and LaCroix.
But she’s just now finishing college – at the age of 26 – and is so wrapped up in social media, I’m nearly certain she would go through the cold sweats and seizures of withdrawal if you took her iPhone away.
This is nothing new. We’re used to it. But what I saw last week took even me by surprise.
Malu had an appointment to get her wisdom teeth removed, and my wife was busy at a kiddie birthday party. So, I volunteered to drive her to the dentist.
Midway through the surgery, I decided to peep through the window to make sure everything was under control. I didn’t understand at first what I was seeing. She was awake and had her arm outstretched with her iPhone in hand.
She was live streaming her dental surgery on Instagram.
There are so many questions here that begged to be asked.
Why would you broadcast that? Who would want to watch it? And why on earth didn’t the dentist crank up the nitrous oxide to knock her out and stop that nonsense?
We may never have answers to these questions.
But this incident does remind me of a relevant study I saw published last month.
TD Ameritrade commissioned a survey of 1,500 American millennials aged 21 to 37. More than half (53%) expected to be millionaires someday, and the median expected age at retirement was just 56.
Among the millennial men surveyed, the expected age of retirement was 53. TD Ameritrade didn’t specify whether males with their hair pulled back into manbuns qualified as “men.”
Oh, and it gets better.
The average age at which they expected to start saving was 36. So, apparently, they intend to hoard a lot of cash in a 17- to 20-year window in early middle age.
Good luck with that.
That particular stage of life also corresponds to your child rearing years, and every parent knows your expenses go through the roof when children come along.
So, unless you become an overnight YouTube millionaire (from streaming your wisdom tooth extraction, of course), reaching those financial goals is going to be a challenge.
It’s easy to poke fun at the unrealistic expectations of young(ish) people, though we’ve all been there.
I was in high school and college during the dot-com bubble years and fully expected to be a millionaire long before 30. That didn’t happen. (When I was 10, I also expected to be the started point guard for the Los Angeles Lakers, taking over for Magic Johnson once he retired. That, alas, also didn’t happen.)
Not all millennials are delusional. Fully 28% admitted that they don’t expect to retire at all.
Unfortunately, this is a lot more likely to be realistic.
A different study published earlier this year by the National Institute of Retirement Security found that 95% of millennials were not saving adequately for retirement and that 66% had not saved anything. And roughly half of the millennials with access to a 401(k) or similar plan at work don’t currently contribute to it.
It’s not completely their fault. Millennials really have had a rougher start in life than most of us due to the exploding cost of education, low starting salaries at the beginnings of their careers due to the lingering effects of the 2008 meltdown, and ridiculously expensive housing costs relative to incomes.
If you’re reading this, you’re probably not a millennial. We know the demographics our readers, and chances are good that you’re a baby boomer or a gen-Xer.
But it’s likely that you have millennial kids, grandkids or even younger siblings that are struggling to save and accumulate wealth.
Here are a few things you can do to help:
- Encourage them – in fact, nag them incessantly – to stuff as much money as they can into their 401(k) plans. At a bare minimum, they should be contributing enough to get the full employer match (generally 3% to 5% of their pay). Ideally, they will get close to maxing out their contributions at $18,500.
- If you have the means to do so, incentive them to save by offering to match. For example, for every $5 they put into a savings account, you kick in an extra dollar. This is obviously more appropriate for teenagers or college kids than young adults with careers, but you get the idea.
- Teach them the importance of diversified income streams. Yes, the market “always” goes up over the long-term (or at least it has thus far). But if you really do want to retire at 56, you need to have the income to pay your bills.