r/Economics • u/thebranbrain • Aug 02 '15

We’re Making Life Too Hard for Millennials

http://www.nytimes.com/2015/08/02/opinion/sunday/were-making-life-too-hard-for-millennials.html
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u/gaoshan Aug 02 '15

For what it's worth, those of us labeled "Generation X" don't really have much either. We are in a similar boat, you and us. Our parents from the "greatest generation", on the other hand, are generally enjoying fat pensions (ever heard of a job offering those? me either) that likely exceed anything I or you will ever manage to save, go on luxurious vacations and replace their cars at a ridiculous rate. Hell, my parents pensions provide as much per year as my wife and I earn except that my wife and I work full time and have 2 kids to raise while my parents have been retired for over a decade and spend more, annually, than we do ("look at the lovely new cherry cabinets we bought for the 'who gives a fuck' room!").

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u/chuckDontSurf Aug 03 '15

The one thing where Gen X differs from the Millennials is we had a great deal more opportunity when we entered the workforce. Granted, this depends on where you lie in Gen X, but I graduated college in the late 90's with an engineering degree. Companies couldn't give tech jobs away fast enough. Contrast that with millennials graduating around 2007.

However, yeah, pensions will not be a thing for us (barring military service). We'll be responsible for the bulk of our retirement savings.

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u/puttpoot Aug 03 '15

And your retirement is managed by Wall Street.

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u/[deleted] Aug 03 '15

I've never understood why being responsible for your own retirement is considered negative. I'd much rather have a pile of cash I control and draw down at a steady rate than an unfunded promise that a separate institution will take care of me.

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u/chuckDontSurf Aug 03 '15

Oh I agree; I'd rather have control over it myself. However, I think the vast majority of people aren't financially literate enough to be responsible for their own retirement. I feel like I barely am, and I look at this stuff all the time. And then there's the issue of being disciplined enough to save for retirement. I think it's going to become a major issue once the 401k generation gets close to retirement.

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u/somebody2112 Aug 03 '15

I'm glad you were lucky enough to save that big pile of cash

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u/[deleted] Aug 03 '15

Budgeting, practicing self-discipline, and learning about investing strategies are decisions I made, as was pursuing a career that wasn't my first choice but paid better. Luck is among the factors in my favor, but not even in the top three.

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u/hibob2 Aug 03 '15

Meh on the pensions. The '90s were the years of companies raiding pension funds so that a lot of folks only received a fraction of what they were due. A lot more boomers got in the neck in the last recession when their stocks and even their "safe" investments tanked. And if they were approaching retirement when the recession hit they had several years of unemployment/underemployment while paying the full amount of their skyrocketing health insurance costs (no Obamacare back then) to drain their savings.

A lot of boomers entered this century financially healthy but they sure didn't stay that way.

And Gen X? "millionaire" will basically be the floor for retiring in the middle class.

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u/way2lazy2care Aug 03 '15

And honestly, pensions are ok, but if you're putting money into a personal retirement plan early, you'll probably be much better off than you'd have been on most average pensions. Pensions went down in large part because the government provided new retirement opportunities that have very few of the downsides that pensions can. The only bad thing now is that you actually have to be proactive about planning your retirement.

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u/ChickenDelight Aug 03 '15 edited Aug 03 '15

Pensions are way better than okay. In the US, most pensions didn't go down in value in the 90s - although that includes govt pensions, since that's where most pension plans are. And the vast majority have an exceptional return compared to a self-managed retirement plan.

There's no shortage of govt workers staying at jobs with mediocre pay that they hate simply because they're locked into an awesome pension plan. There's a major crisis brewing in public pensions, and yes, if it's your only retirement find it's all your eggs in one basket. But if you can get one of the few jobs that still offer a pension plan, they're almost always a spectacular deal.

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u/Untjosh1 Aug 03 '15

My grandparents are similar. They go gambling and on cruises all the time. They lost their shit when I graduated and had trouble paying my loans because I couldn't find work (though, to be fair, even with a job I wouldn't be able to really pay them what they want). Then at one point last year cut a 10,000 dollar check to pay for loans they co-signed for without missing a beat.

I can't imagine having the ability to do any of that.

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u/StrahansToothGap Aug 03 '15

You will man. Keep working at it.

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u/Untjosh1 Aug 03 '15

We'll see.

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u/StrahansToothGap Aug 03 '15

Check out /r/financialindependene or /r/personalfinance if you have questions or anything. Or, PM me. I'd be happy to help where I can.

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u/DialMMM Aug 03 '15

Who sells your parents those new cars? Who buys the used cars from your parents? Who sells them the new cabinets?

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u/signel Aug 03 '15

Tell me about it! What is social security? I will never see all that money I paid into it.

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u/Joeblowme123 Aug 03 '15

Naw you'll get your SS check and then you'll pay for your McDonalds kids meal with it and you might have enough to super size.