Millennial retirement saving is extremely hard. Even if millennials are doing everything right, the system seems to have been made to beat them up and their savings. And with odds stacked against them, it’s not surprising that the millennial retirement crisis is playing out before our eyes. In the last 40 years alone, the price of owning a home and student loans has skyrocketed.
Despite saving more, this group of people is having difficulty putting money aside for their future. It’s not a secret that millennials are just as capable of saving as people in other age brackets. They save to retire but are just behind the previous generations’ income and savings. And the sad thing is, they are not even to blame.
What do the numbers say?
Millennials seem to be the butt of the joke in news articles and other media content. Some people think they complain too much, and some people just straight up think they are not responsible for their finances. But the truth is that millennial retirement saving is harder than it looks. They encounter several problems in their journey to financial security.
Now, numbers show the world what we suspect: millennials are so overqualified yet so underpaid. A 2021 study by the Center for Retirement Research found that individuals between 28 and 38 got a lower net wealth to income ratio than other age brackets.
Angie Chen, the assistant director of the center, said that this age bracket has also recorded low in a lot of indicators. These factors include earnings, participation in the labor force, homeownership, and marital status.
Millennials are said to have entered the worst labor market in all age brackets. Since most of them graduated from college in the early 2000s and during the 2008 Great Recession, Chen says that this had a negative impact on fresh grads at the time. True enough, college graduates at the time had a hard time finding good jobs.
The numbers get grimmer as these people are some of the most educated age brackets in the world, yet they are also the most underpaid. This makes millennial retirement saving hard and almost impossible.
What can they do about it?
There are many reasons why people from ages 28 to 38 can’t save money, but it is not their fault at all. Most personal finance experts would like to disagree. Student loan debt, for instance, accounts for 40 percent of the income of millennials. Rising inflation has made it harder for everyone to afford fresh produce, gas, and other needs.
If anything, companies and changing policies are to blame. A 2014 survey from the National Institute of Retirement Security revealed that the shift from benefit plans to contribution plans is one reason why the age bracket can’t keep up.
A 2014 survey found that only 55 percent of millennials were eligible to participate in employer retirement plans. The number is much higher for the other brackets, specifically, 77 percent for Generation X and 80 percent for Baby Boomers. Thankfully, more and more companies are making it easier to open 401(k)s.
Millennials’ retirement numbers aren’t looking too good, and people are starting to notice. But it’s not right to place such a significant burden on one age bracket alone. Many officials are slowly pushing for better working conditions, so people from all sectors can help save money for the future. In short, it’s not just about the millennials but about the whole workplace dynamics, in general.
One thing is for sure, though. It’s that the millennial retirement saving crisis runs deep. And it’s not just because they’re spending their money on lattes.
