Can millennials even have a retirement? Truth is, yes! Burdened with student debt and the Great Recession, Millennials have been slower than previous generations to put aside money. But they still have time—and some are saving big.
On Tuesday morning, #MillennialRetirementPlans began trending on Twitter. But why? The answer begins with a midnight hashtag roundup game that’s lead by @Radstags—whoever that is. Sometimes, these regular hashtag challenges trend on Twitter. The game only lasted 55 minutes but the responses were still going strong 12 hours later. So, it’s fair to say that #MillennialRetirementPlans hit a nerve.
The tweets range from hilarious to hurtful, but they highlight Millennials’ anxieties about their future and whether they can prepare properly for it. We looked through hundreds, maybe even thousands (we lost count after a while) and picked out some tweets we think you’ll find amusing—and also some myths to debunk.
But before we get to that, let’s make it very clear that Millennials are not today’s high schoolers. Those youths are the start of Generation Z, according to Pew Research. Millennials, also called Generation Y, are adults who were born between 1981 and 1996, so as of 2019 they are 23 (or soon to turn 23) to 38 years old. You may see some research institutes, such as the Center for Retirement Research (CRR) at Boston College, include those born into the end of ‘99. Whichever end point you use, they are adults.
@tzerigawa: “What plans? We’re never going to be able to retire. #millennialretirementplans”
It certainly does seem like most Millennials are having a hard time saving for retirement. Between student loan debt and the catch-up game that the middle-to-oldest Millennials have had to play post-Great Recession, the outlook on retirement seems grim. But some Millennials are beating the odds and showing their peers how to do it.
Here’s the depressing truth: Despite handily outpacing earlier generations when it comes to earning college degrees, both male and female Millennials between the ages of 25 and 35 are behind where late Baby Boomers (those born in 1954 to 1964) and Gen X-ers were at the same age. That’s true by a lot of financial measures, including a comparison of their median earnings to median earnings in the workforce overall, according to CRR’s 2018 report “Will Millennials Be Ready for Retirement?” Put another way, it is taking Millenials longer than previous generations to reach their high earning years. They also lag behind Gen X and Boomers when it comes to participating in employer-sponsored retirement plans. By age 35, only 37% of male Millennials were participating in such plans; compared to 50% for Gen Xers and 51% for late Boomers. Among 35-year-old Millennial women, 38% were in employer sponsored plans, compared to 49% for Gen Xer and 43% for late Boomers.
On the bright side, those Millennials who started participating in 401(k)s right after the Great Recession have seen their account balances balloon with the stock market and their own contributions. Fidelity Investments reported in May that the average account for Millennials who have been invested in one of it’s 401(k)s continuously since 2009 has grown from $7,000 to $129,800. Yeah, we know. Not that many Millennials have been in a 401(k) for 10 years—at age 25, less than 25% had employer provided plans. But still, it’s been a good decade in the market and the growth of automatic enrollment has raised participation among those workers who are offered a 401(k).
So Millennials, burdened by student debt and the Great Recession, are getting a late start on retirement savings, as well as marriage, home buying and kids. But as the CRR report points out, it’s a well educated generation and “retirement is still a long way off” —meaning they’ve still got time to save. And despite their generational handicaps, Millennials are finding ways to make it work. (See: 5 Creative Ways to Pay for a Down Payment on a Home and 5 Key Strategies to Deal With Student Loans.)
Now, back to the hashtag. Here’s some tweets I took special note of—and my personal-finance-writer-advice reactions to them.
@fitch_williams: “Cultivate my kids so they can become successful millionaires and live off them. #millennialretirementplans”
Your children as your retirement plan is a traditional approach to retirement. But, it’s not a guaranteed approach. (And, to state the obvious, you actually have to have kids to make this work.)
If you wanted to enlist your children’s successful careers as a means to fund your retirement, then you’d better ensure that they are as financially literate as possible. Many parents today are even turning to allowance apps to help their child get a start on money management
You children’s success in life is not a guarantee that they are able to take care of you. Children (young and adult) can get sick, they can lose their jobs, they may go through a costly divorce or they may choose a less lucrative career path. Let’s not forget they may have to pay for their own children’s costly education. Even if they can afford to help, there’s still a chance that they will choose–for whatever reason–not to do so. So, please don’t bet your retirement on your children.
@lamegirlblues: “Watch as the environment disintegrates and move to Mars, where we will yet again, destroy another planet. #millennialretirementplans”
Ok. I get it. We have melting ice caps, mounds of garbage in landfills and in the middle of the sea, and deforestation happening at alarming rates. It’s no wonder some Millennials wonder if saving for retirement is even worth it. Will there even be an Earth to live on? But what if the Earth survives?
@AceaLashley: “Sell computer stuff to boomers. #millennialreitrementplans”
Many Millennials have stories of their Boomer grandparents or parents asking them for technology advice. But by retirement, can Millennials be certain they won’t be in those technologically challenged shoes with their own adult children? Cycles have a way of repeating themselves.
Believe it or not, Boomers are the highest number of users on Facebook. Of course, it comes after younger generations have moved on to other social media platforms. But, it still shows that older generations should not be left out of the advancement of tech ever. If they’ve taken over a Facebook, it’s only a matter of time before they’ve taken over other social media platforms. Just ask my Gen-X editor whose mother talks to him more on Twitter than on the phone or in real life.
@jenninjuice1: “Work yourself to death and you won’t have to worry about retirement. #millennialretirementplans”
Once upon a time in America—before the birth of Social Security 84 years ago—this was an actual thing. But if there’s anything Millennials have been known for, it’s recognizing there’s more to life than work. Some are budgeting for frequent sabbaticals, while others are saving big time so they can retire early.
In fact, there’s a community of people (Millennials and Gen Xers) who have chosen to retire early through modest living. Have you ever heard of Financial Independence Retire Early (FIRE)? It’s a group that’s committed to permanently clocking out of the rat race well before the government allows you to tap Social Security. See The Forbes Guide to FIRE for more information.
@sjredmond: “Move to the main floor of their parent’s house. #millennialretirementplans”
The implication here seems to be that Millennials are still living in their parents’ basements and will be moving upstairs when their parents die and they retire. Some, but certainly not all, are. But returning home–despite all those nasty stereotypes–has been a sound financial choice for some Millennials, particularly those who used their time back home to pay off college debt and save money towards a more stable independence from their parents. (See: Why Living With Your Parents Is Not as Bad as You Think)
@mylightinflight: “A van down by the river. #millennialretirementplans”
Why not? It’s your retirement. You can do whatever you want with it. Just make sure you plan for it. Planning for it doesn’t involve just money, it also involves thinking about where you want to be, who you want to be near and what you want to do. Downsizing can not only make for a more affordable retirement, but a freer one, with fewer responsibilities for keeping up a home.