Consumerist: Dear college seniors, if you’re planning on living out a long, comfortable retirement, you need to start saving now… or hope that medical science figures out how to extend life even further, because it looks like the average millennial will have a few years of retirement time before they kick off to a higher plane of existence.
According to some new analysis from the nerds at Nerd Wallet, increased student loan debt (a result of soaring tuition costs) along with high levels of unemployment among recent graduates puts the current crop of younger adults at a disadvantage when it comes to retiring at a reasonable age.
11 comments:
I don't think about retirement. I know others who don't think about retirement either. However, I also know a different subset of people who have been thinking about and saving for retirement ever since the day they were able. For some, a portion of job appeal comes from the knowledge that enough will have been saved for them to eventually move to Florida or Hawaii and play bridge all day. They overwork themselves just so they can eventually relax. Why are we as a culture taught that it is bad to relax now? Ideally, I will be doing something I enjoy, like going to work, and still allow myself to take time off. I strongly believe that there are ways to enjoy your life more without having to constantly consider retirement as some sort of reward. I also believe that if you've chosen to do what you want to be doing for work, you might not want to retire at all.
This is terrifying for me, especially because the example given in the article is a student graduating with $23,000 of debt, and I have about $180,000 in debt right now. The thought of having to work until I'm 73 (or older) because of this debt getting in the way of me being able to contribute to my retirement is sickening. I keep seeing statistics like this and they honestly make me scared for my future. Was this degree worth it? Did I make the right choice as a high school senior? At this point I have no clue, but I've already taken out the loans so I might as well focus on moving forward rather than dwelling on decisions I have made in the past. I am here, I'm getting my degree, and I'm going to go out and make the most out of it. I have to say, though, that all of this talk about debt and loans and retirement funding is making me lean more and more towards going into the corporate sector where I can make some decent money. Even if I wanted to, I honestly don't think I could afford going into a regional theatre career with this kind of debt behind me.
Work for fifty years and relax for ten, is that what jobs are about now? Even without thinking about student loan debt, having to save up your life's earnings in order to live a life without debt is ridiculous. And that's not even counting buying a house. I hope that everyone here will be receiving far beyond the average starting salary because of the financial investment in degrees, but I also recognize that this won't be the case for everyone. That really isn't okay, though. Our higher education system is really bad at preparing for the future, and this is a real problem that politics and law (among other things) make practically impossible to solve.
But is a lifetime of debt doing something you enjoy worth it? Is it any better than living a mediocre but comfortable life doing a job you wish you didn't have? I think that's up to the individual person. Sometimes people find jobs that pay well that they love to do, and that works out well for them. But for everyone else, I think you should determine your worst-case scenarios and evaluate what your best option should be. Even then though, it's a game of chance. But like Shannon said, once you've committed to it, you might as well make the most of it. However, I'd like to add that you should push for the life you want, not the averages of everyone else's.
This is sad. I really need to start a retirement fund, oh my goodness. I am with Shannon with this one, the example gives someone with only 23,000 dollars of debt and that amount grows significantly, and interest rates are pretty harsh during these times. Like Shannon, I am looking at quite a bit more than $23,000. The good thing about the fields we are going into and the school we are coming from is that we have a very good chance of being well employed and will, god willing, be able to pay off our loans and saving for retirement. Also, like the article states, there has been an increased number of student loans being taken out every year. So as deep of a whole I am in, I know there are many more like me. In that regard I know that Obama has been trying to take action on reducing student loans debt and interest rates.
This is a terrifying statistic for current seniors but it is even worse for people who still have more time left in school. As a sophomore I can only see student loans rising more and more in the following years leaving me more in debt than the current seniors, it seems as if they will retire at 73 and I would retire at 80. And just like Shannon we have loads more debt than other students. Working may no longer be a question of need but getting as many jobs as possible far beyond what is typical. I understand that working as a freelancer would mean need to take ever job that you can get but it seems as if I would need to actively have another job as well as designing, this statistic is truly a halloween nightmare.
To be fair, The age at which one born post-1960 can receive full Social Security benefits is already at 67, which is only seven years earlier than this. The magical age of 65 for retirement also came about in the 50's and 60's, when the average lifespan was only about 68 at the time. While balloning student debt puts our generation collectively at a disadvantage, let's not pretend that Gen X is that much more prepared for what has come to be the universally thought of as retirement: 20 or more years playing golf in Florida, waiting to die.
This article is only tangentially related, but the statistic that struck me most was that, according to Wells Fargo, "37 percent of middle-class respondents say, 'I'll never retire, but work until I'm too sick or die.' And 42 percent say they can't pay today's bills and save for retirement." If anything, I almost think our generation's debt, combined with our parents' collective paltry savings, could make us more savvy with regards to retirement.
This was nothing new to me and is why I am already starting to plan in a very broad sense how I will start to repay loan when I exit graduate school. My first goal will be a onslaught toward my debt and to beat it down to a pulp as quickly as I can. My personal money philosophy comes from a man named Dave Ramsey, and I love it. Well I will get out of debt ASAP.
Its pretty terrifying to know that the expected age for retirement is getting later and later. I some times wonder whether or not it is truly worth taking out a significant amount of student loans for college when you will just be spending a good portion of your life working it off. However, picking up on a different note, I will always hold the advice of my high school teacher dear. He said that the best way to save for retirement is to take 10%, I know it seems like too much, of each paycheck and place it in a separate savings account for your retirement fund. This seems like a more than easy way to save thousands if not millions of dollars in an easy, consistent way, for retirement.
Well this article is kind of terrifying... Like Shannon and others said, most of my friends have significantly more than 23K in student loan debt, and it's even higher for those of us who decided to go to graduate school. The scarier thing is that I think a lot of people my age haven't ever considered their retirement savings. Part of the problem also is that a lot of the jobs that people are getting out of school don't have 401K plans, unlike previous generations. My generation isn't settling into careers as soon, and this could dramatically affect how and when we can retire.
I know a lot of people find this article terrifying, but what I have to say is, look into some different plans from now. I know my dad made me open one two years ago, and right now it doesn't seem like much, but it definitely will be growing little by little. Additionally, I'm still of the opinion that CMU has so many talented people, that pretty much all of us will be pretty well off in the future. Although, it does take a little bit of planning sometimes. And yes, I do know that many might say I am just being really optimistic, but I hope that they are proven wrong and see that their degree definitely was worth it!
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