Two-thirds of millennials have nothing saved for retirement

[Sigmapolis]

1) @alarson was also talking about college. That chart is showing data for primary and secondary schools.
2) "Non-teaching staff" does include a lot more than the dreaded administration. I bet a lot of that increase is from schools hiring ELL people and teachers associates. The change in strategy of keeping kids with special needs in the classroom with their peers instead of in their own room necessitates more assistance for teachers

I was not trying to refute his point entirely -- some of that growth, even in college (e.g., adding administrative personnel to professionalize some things that faculty used to do themselves to "pitch in" for the department or college, such as admissions or finance, or adding IT personnel with the rise of personal computers) makes terrific sense.

I do not think there is one answer here. I would imagine reduced state support is probably the largest reason just thinking through the numbers. Increasing "school services" (i.e., for programs and services that did not exist in the university of the 1950s but do now, maybe call it "administrative bloat" depending on who you ask) is probably more of a contributing factor, but one that I imagine has to have some influence.

Then again, you know me, I think we more-or-less over-invest in education as a society anyways, mostly because education is a signaling game.

 

[CysRage]

I've said this before, but I think everyone would be much better off if we required a personal finance course in high school.

It amazes me to this day that this isn't some sort of law. You would think financially responsible Americans would mean more tax revenue. Maybe the credit card companies keep this required course from happening.

 

[Sigmapolis]

It amazes me to this day that this isn't some sort of law. You would think financially responsible Americans would mean more tax revenue. Maybe the credit card companies keep this required course from happening.

Not that people would remember much of anyways.

 

[CyCloned]

Bingo. It scared me the number of times I'd prepare a tax return for someone who would tell me they NEED this money immediately because they needed new tires for their car or to pay for a furnace repair. I'd venture half the returns I did for people with what I would consider "liveable" wages they couldn't afford a $1,000 repair without making significant changes to their lives.

Yes, it is amazing how many people think that filing your taxes is like a savings account that you have to fill out a few pieces of paper for. I realize that whole system is designed to make sure the government has more of your money than they need so you will have incentive to file, but a tax refund should not be part of your financial planning.

 

[drmwevr08]

Hell I'm 42,still have loans and feel like I haven't saved. It's probably only marginally better as you look at older groups. Thank goodness for pension plans that take your money for you.

 

[Cyched]

Hell I'm 42,still have loans and feel like I haven't saved. It's probably only marginally better as you look at older groups. Thank goodness for pension plans that take your money for you.

What's a pension?

 

[drmwevr08]

What's a pension?

The only reason I've saved for retirement! I suppose absent that I might have managed to save it, but who knows.

 

[besserheimerphat]

 

[Sigmapolis]

We had personal finance class in 8th grade. Learned about saving, balancing checkbook, etc.

I have two 401(k)s, a 403(b) for my wife, a mutual fund, multiple credits cards, a few more accounts, two cars, etc., every “adult” thing you can have in personal finances except a mortgage or my own business or something like that.

I have never once balanced a checkbook. Personal finances classes in high school would be fine (and I took one, and it had some good things in it like how to write a CV), but they do need to teach 2018 skills. I have a particular bone to pick with the checkbook balancing.

 

[drmwevr08]

I have a pension that I left several years ago. Over the last three years my cash value has stayed the exact same yet the market is up another 50%. If I cashed out now I should be able to capture those gains. Except I can't. The pension plan is nice, I guess, but since leaving it has done nothing for me. The 401k I started 3 years ago has more in it today than my pension account after a decade of a public job.

I'm not suggesting it's the best, just that it's saved my bacon.

 

[Tailg8er]

I am 30 and already planning that my retirement age will be at least 70. And it should.

I'm 50 and planning on a retirement age
of 70.

I don't really get this thinking, maybe it's a factor of where you came from/where you want to be? Did you guys come from affluent families and have plans to retire on yachts?

I'm planning on retiring by 60. I came from dirt poor, but think I'm doing pretty good at age 31. My spouse & I each have about 100% of our salaries in our 401k's, and have been knocking out debt at a good rate. Even with helping our 2 kids with college I expect to have a decent amount. Mortgage is far and away the biggest expense for the majority of people - how much do you really think you need each month without that payment?

I'm also not planning on living to 100 I guess.

 

[Cycl1]

Not sure why you all didn't just choose to be born to billionaire parents like I did. Slackers.

 

[Doc]

Not sure why you all didn't just choose to be born to billionaire parents like I did. Slackers.

Why are you back?

 

[Tailg8er]

Before I had kids my goal was $1m in 5% dividend-paying stocks which would give me $50k/year and I'd retire early. This would be in addition to retirement accounts. Then we had kids. We still save through work and through Roth IRA, but I'm nowhere near even sniffing that amount. Last year I made about $2500 in dividends. Ha.

Sure, that's all well and good, but my questions would be:

1) 5% seems low for average returns
2) The further you go in your career, the more you will make. So, at age 50 you'll be making (and likely saving) way more than at age 30.
3) Without a mortgage, $50k a year seems like a LOT of money. My spouse & I are currently doing quite well making that WITH a mortgage, and student loan payments, and 2 kids in the house.

 

[Rabbuk]

Sure, that's all well and good, but my questions would be:

1) 5% seems low for average returns
2) The further you go in your career, the more you will make. So, at age 50 you'll be making (and likely saving) way more than at age 30.
3) Without a mortgage, $50k a year seems like a LOT of money. My spouse & I are currently doing quite well making that WITH a mortgage, and student loan payments, and 2 kids in the house.

You both make that? Or 50 total?

 

[Tailg8er]

You both make that? Or 50 total?

We each do, sorry.

Even if we both don't at age 50 (with no kids & no mortgage), I'd still think we'd be doing more than fine.

 

[Sigmapolis]

I don't really get this thinking, maybe it's a factor of where you came from/where you want to be? Did you guys come from affluent families and have plans to retire on yachts?

I'm planning on retiring by 60. I came from dirt poor, but think I'm doing pretty good at age 31. My spouse & I each have about 100% of our salaries in our 401k's, and have been knocking out debt at a good rate. Even with helping our 2 kids with college I expect to have a decent amount. Mortgage is far and away the biggest expense for the majority of people - how much do you really think you need each month without that payment?

I'm also not planning on living to 100 I guess.

I grew up on a dirt patch in western Iowa. Neither of my parents went to college. Similarly 0/4 on my grandparents, though my mother's side achieved some modest success with a family business. Not complete salt of the Earth here, I had a good family and dependable upbringing, but nothing about it was rather fancy in any way, shape, or form.

My "plan" (or rather vague notion at this point) was based on three things...

(1.) My wife and I are both in white collar, professional jobs. Neither of us are likely to be physically broken by 60, and I quite enjoy working. I think it is good for the mind, body, and soul. So we will probably keep it rolling at that point on lifestyle alone.

(2.) Social Security and Medicare are likely to kick in much later than 67 by the 2050s or 2060s, as they should, so you are going to have to work until your late 60s or early 70s in order to be "covered" by those programs, unless we have lots before that.

(3.) Interest rates/the real returns on equities are probably likely to be lower in the future than in the past because of slower population growth and slower productivity growth. They will still grow, but probably not like they did the last century, so I factor that in.

One carrot, two sticks.

 

[Cyched]

I have two 401(k)s, a 403(b) for my wife, a mutual fund, multiple credits cards, a few more accounts, two cars, etc., every “adult” thing you can have in personal finances except a mortgage or my own business or something like that.

I have never once balanced a checkbook. Personal finances classes in high school would be fine (and I took one, and it had some good things in it like how to write a CV), but they do need to teach 2018 skills. I have a particular bone to pick with the checkbook balancing.

That thing I was told was crucial to know how to do?

Yeah, me neither.

 

[BCClone]

Couple things I've gleaned from my pushing late 40s.

1) Typically the more you make, the more you will spend. Even if you want to save, you will spend at least a portion of it.

2) Inflation and taxes will make you need to save way more than you could imagine you would need.

3) Health insurance makes most people work until they hit medicare (65 now)

4) When you retire, plan to have darn close to your last set of wages replaced by IRA (or whatever investment tool) payments. You think you won't need you need it, but you will hire repairs, some cleaning, and the house will just have aged. You also won't just sit around staring at each other. What keeps many people from spending money is work, you can't spend it when you are busy earning it.

5) You will have expenses that you didn't know you would have (I'm using my 87 year old mom as an example here), LTC insurance, extra meds, other things that I just can't think off my head.

6) Use 8% returns until 60 and then 6% thereafter, everyone gets safer when they near retirement and walk away from risk (nearly everyone). If you plan to live on this rate you should be fine. SS will be gravy, don't count on it. If you have a pension, start a Roth IRA.

 

[randomfan44]

Falling in that demographic with kids, student loans and a house, it is hard to save for retirement. Hell, it can be hard to saving in a savings account. I think that's what you have to force yourself to participate in any 401K related plans an employer offers. It's money you never even see.

Exactly; just move it out of your account and into an investment account of some kind right away before you have a chance to consider it available money. We move some money to our IRAs and a cash account with our broker right when I get paid and then when we see an opportunity to buy a good stock at a good price, we have it there to invest.