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Subscribe to RSSWho would have thought the I-want-it-now generation would be concerned about the future?
When it comes to retirement savings, Gen Yers are out-investing 30 and ups, according to a survey titled Retirement & Long-Term Savings Habits of Working Americans conducted by TD Ameritrade released this week.
While 85 percent of employees of all ages have savings vehicles such as IRAs or 401(k)s, only 16 percent of Baby Boomers say they are doing all they can to save for retirement by funding such accounts, compared to 25 percent among Millennials. Gen Xers are also doing better than Boomers at 23 percent.
Tough economic times for many working parents during the Great Recession may have spooked younger workers. “They learned some tough financial lessons from their parents over the past few years and as a result have taken matters into their own hands and are doing what they can to be better prepared,” said Carrie Braxdale, managing director of investor services for TD Ameritrade.
Wealth has been a preoccupation for younger workers. One Gen Y survey by Pew Research found, “eight-in-ten say people in their generation think getting rich is either the most important, or second most important, goal in their lives.”
Their parents may be fostering such ideas by not pushing them to stand on their own feet, and in the end Gen Yers could end up better off financially when they retire than their moms and dads.
Twenty-somethings “are returning home to live with parents post-college in record numbers,” pointed out Doreen Dodgen-Magee, a licensed psychologist and Gen Y expert. “In many ways this alone provides them with greater amounts of income to put toward retirement than others who went before them; paying off mortgages, covering rent, buying food, etc.”
Braxdale also believes an emphasis on financial planning and the availability of so much about investing online has contributed to making the younger generation more money savvy.
But given historically low tax rates, are Gen Y workers being smart by putting so much money in tax-deferred investment vehicles?
“I think it’s always better to save in a tax-free environment,” Braxdale stressed.
So how did saving work out for older workers? According to the survey, Baby Boomers aren’t feeling great about the future:
• 47 percent are somewhat confident they will reach their savings goals in time.
• 27 percent of Boomers are less confident or not confident at all that they will reach their savings goal by the time they are ready to retire.
• 23 percent of Boomers are completely confident they will reach their savings goals in time.
Since parents have a lot of influence on their kids, this reality may be making everyone nervous about the future.
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Part of this "boomers saving less" meme needs to include that fact that some boomers, particularly early wave boomers, have actual pensions making additional savings not as urgent as those relying solely on 401Ks / 403Bs and IRAs (regular and/or Roth.) Our generation straddles the old pension system and new. In addition, we have all been competing for the same jobs our whole lives and because employers had such a huge number of us to choose from, could (and often did) offer lower wages to begin with.
Our children have grown up seeing us saving like crazy, even with some pension income, AND living below our means all their lives (again, contrary to one of the many blanket myths about boomers.) Now in their 20s, they have adopted our "save for a rainy day" and "you'll have to rely on yourself" attitudes. So we have been more of a positive role model instead of the cautionary tale some of our demographic cohorts have become.
thats supposed to be shocking somehow? boomers repeatedly support destroying the environment, putting us into new wars, and eliminating the social safety net they had available to them.
hell, they even want to destroy the unions they relied on for better working conditions, benefits and wages for the rest of us.
the next 20 years cannot come soon enough.
We have to if we want anything at all when we retire. The boomers are going to suck social security dry and will never let the younger generations opt out of it ("cause we paid into it dagnabbit!"), so we have to save for our own retirement while subsidizing theirs.
Sorry corrupt politicians spent your social security, but I don't see why I should have to pay the price for what some old men in D.C. did before I was old enough to vote.
Wahhhh.....Wahhhhhh. Just like us you'll pay....you'll pay....or you will go to jail. It's that simple!
SS is a ponzi scheme - to quote Rick Perry. It cannot be sustained. Gen Yers (probably Republicans) are simply adjusting to reality. Sadly only a tiny minority I'm sure.
Texas, you should know better than to quote your governor for 'facts.' It would be like me trying to pass off my governor (Chris Christie) as some kind of wise man. It just doesn't work.
That said -- Remydon, the attitude you are copping is precisely the attitude the folks who want to ruin America want you to have. They prey on those of us caught in conditions that make us worry about our own future, and encourage us to be callous toward others.
The fact is, we are all in this together. The only folks who are going to get a bigger piece of the pie if the corporatists take over are -- the corporatists. And sorry, you and I won't qualify.
So take a little time and rethink your attitude. Social Security is there for a reason. It has worked, and it will continue to work unless we allow ourselves to be brainwashed by the yammering of the far right. It can be tweaked and forged so that it will be there, strong and helpful, for you and your heirs.
As Ben Franklin said, "We must all hang together -- or indeed, we shall all hang separately."
Social security worked fine until 30 years of republican efforts to destroy it have started to take their toll.
Perry, being the second highest recipient of Federal Stimulus moneys, thus funding the "Texas Miracle" on 2-1 Public vs. Private sector jobs, would know a bit about so-called ponzi-schemes. Your entire state economy is built on nothing but smoke and mirrors.
oh...poor, poor Remy: only you should get social security, not the folks who paid into it their entire working lives?? What a whiner... (The fund is solvent until 2037 by the way even if nothing at all is done).
Morrigan,
Maybe, maybe not. I'd rather have the choice to participate or not, and deal with the consequences myself. If Social Security can be a self sufficient, viable program, then you don't need my contribution to keep it running so why not let me opt out? If this is not the case, and you DO need my contribution to keep the system going, then it is a ponzi scheme. It can't be both ways.
AP, you suck at reading. I DONT WANT TO BE PART OF IT. You can keep the 25,000 I've put in over the past 3 years since graduation. I just don't want to be part of the program. By the way, I'll be 52 in 2037 so that doesn't help me one bit. It just means I'll have thrown away several hundred thousand instead 25,000 when it finally does go belly up.
Here is a question for you, what do you expect to happen when you opt out and end up losing everything at 60, can't work anymore, and have no relatives?
I'm all for letting you opt out if you're all for sitting your selfish ass out on the curb and starving to death when the time comes. Social security was created for exactly this type of scenario and the biggest problem with people like you is you fully expect to go take your stash and invest it, then come crying back to everyone else when it doesn't pan out.
The Boomers did pay but they were stupid enough to allow the politicians to siphon the money away for other things like bailing out financial companies and sending people to fight failed wars and cut taxes on the top 1% so they could take the money and speculate the country into an economic hole instead of doing the hard work of upgrading/maintaining our infrastructure, training the next generation to compete globally and creating domestic jobs.
Basically, I will have to pay MORE (they raised the FICA rates in 1984, remember?) for the current generation of losers who blew up the country while I still have to fund my own retirement completely out of my own pocket in the midst of a post-crash, slow growth Japan-style economy that I had no part in creating because I actually behaved responsibly for all of these years.
Yes, boo-hoo indeed!
@ Knight: "Republican Efforts" are you kidding me? You mean workers who contributed started retiring in droves? I think you have confused "republican efforts" with "life". Besides if it had not been for Reagan there would be no SS now. Also, your last comment about investing on one's own and losing everything and winding up destitute was fundamentally flawed based on the fact that the vast majority of people who save a portion of their earnings to invest on their own......wait for it.....don't wind up destitute and poor because they save. I mean such an idea must be anathema to a liberal such as yourself when it is just much easier to take one's retirement income out of someone else's check right?
"The statesman, who should attempt to direct private people in what manner they ought to employ their capitals, would not only load himself with a most unnecessary attention, but would assume an authority which could not safely be trusted, not only to no single person, but to no council or senate whatever, and which could nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it." -- Adam Smith
First bit was stupid, every republican president or candidate in the last 30 years has tried to undermine, underfund, and try some other way to give away the SS nest egg to wall street.
Yeah right, they will end up giving it all to wall street and watch it gain half of inflation over the next 30 years.
Knight,
First of, how the hell am I the selfish one when you expect ME to subsidize the retirement of accounts of current boomers while not expecting to see anything in return when I retire? Secondly, the rate of return for an SS right now is 2.5% according to their website. My student loan interest is 6%. Mortgage rates are 3.5%. For those who can't do math (majority of people in favor of S.S.) that means that I would make far more headway towards having a finacially secure retirement if I could use the money being put into S.S. to stay out of debt over for the next 40 years, let alone invest it.
And you seem to forget your own words, S.S. is slated to be insolvent in 2037, so it looks like I'm gonna be homeless on the streets either way. So why not let me do it my way?
Really? So ronald reagan raising payroll taxes to keep Social Security solvent in the early 80's is counted by your logic to be "underfunding"? And Obama's Social Security "tax cut" is by your logic keeping it funded? Please explain how raising the taxes that feed SS keep it underfunded, while cutting the taxes that feed SS keep it funded. You sir are a paragon of liberal logic. Also, I have invested my 401k since the age of 20 (about 10 years) and with careful investing have seen my nest egg grow at double the rate of inflation. It's not hard really, and I saw some hard times along the way, but the fact is your over generalization about possible RoR's is typical of the liberal sheep think that americans can't do a thing for themselves and are totally reliant on a nanny state.
morrigan-1568233
SS cannot be sustained. The annual federal deficit is 1.4 trillion dollars which occurred on Obama’s watch and that number is post TARP and stimulus. What the hell is going on? Politics aside; The budget will have to be cut and taxes raised to save our asses.
Whatever, I'm all for letting you exempt out, I just don't want to have you back on board when wall street collapses your fund and you walk away with half what you put in - I really don't care either way but if you really think for profit investment won't con you and leave you and millions of other narcissists out in the cold you have another thing coming. There are definitely changes that need to be made to keep SS solvent but all the right wing wants to do is gut them entirely and take us back to the middle ages with most of our elderly rotting out in the streets.
@Knight
We will deal with wall street once that happens to our funds. What you are failing to see is that my generation, the newest generation, has the self reliance your generation never had. We do not trust the government like you boomers do. Fact of the matter is it will not be solvent very long, and i can make a ton more money playing the markets instead of a 2.5% return. ( my generation is very tech savvy - remember?) You don't trust wall street because you have no idea how it works. Its ok, its natural to be scared of what you do not understand.
brendan;
None of these fools understand what is about to happen. A 1.4 trillion dollar annual budget deficit the goverment is running doesnt seem to bother them. Idiots.
Brendan, you said "I can make a ton more money playing the markets instead of a 2.5% return."
That's where the problem lies. The market is a rigged game. "Playing" is the right word. Unfortunately, unless you are already in the 1% you are not likely to win that game. At least, not win big.
You -- and Texas -- seem not to have much of a historical perspective. The deficit can cause problems, of course. But despite what the spin doctors want you to believe, running a country is totally different from running a family.
With attention and a bit of tweaking, Social Security will be there past 2037 (as long as people keep paying in -- which could be a problem if people don't have jobs!). And our country had larger deficits after World War II.
Something that could help is returning to the post World War II tax rates until the deficit is reduced. Some of the 1% would scream bloody murder, and they would make every effort to do some nasty things on Wall Street by manipulating the numbers; but if we figured out how to do it right, we could probably pay off the deficit pretty quickly.
Ayn Rand, one of the best-known purveyors of this line of thinking, opposed government sponsored 'safety net' programs while supporting 'corporate welfare.' However, she took government assistance when she developed cancer -- her Medicare and Social Security payments kept her from financial ruin.
I'll not call you fools. Or idiots. But don't think you can outplay the big guys at their game. If you want to know what they are up to, read Naomi Klein's book, The Shock Doctrine. She is not a member of your generation -- she just turned 41 this year -- but she tells it graphically and clearly. The big guys are playing for big stakes -- they have been for decades -- and they are dead serious.
Remydon-
And that kind of reasoning is exactly why you'll need social security.
At age 64 you can be debt free and still not able to pay your utilities, let alone put food on the table or buy medicine.
I know because a version of that happened to me at a younger age due to health issues. My house was paid for, property taxes low, car paid for, no credit card debt, but I still couldn't pay my utilities or put food on the table, let alone buy medicine, because I was too sick to work.
I did all the careful and prudent stuff, yet ended up having to decide whether to sell the roof over my head in order to survive.
Social Security is not a retirement fund. It's to help cover the basic necessities when life happens and you're too old to bounce back.
That will be the case for you one day too, dearie.
Well duh! When you move in with your parents, of course you have more money to save. Live rent free, food been paid for, clean laundry...... must be nice.
Jerri,
Not likely. I'm a nuclear engineer, the unemployment rate for that profession has never been much higher than 0% and the pay is fantastic. I'll be fine for my retirement regardless. I was just pointing out that the rate of return on S.S. is lower than the interest rate on most mortgages, so economically it does not make sense to invest anything into S.S. until you are completely out of debt. Even then Roth IRAs and several other government programs are far better investments than S.S. if you don't feel comfortable with the stock market.
@ Morrigan
the market is not a rigged game. Again, you fear what you do not understand. Its ok, the majority of americans have no idea how markets work and why stock prices fall, so its only normal that you fear the markets. Im a licensed financial adviser. What does the 1% have to do with making money in the markets? Nothing at all. Funny thing about markets is they do not discriminate, people do.
Increasing taxes on the 1% does not solve anyone's problems, if we really want to solve our problems with deficits we need to seriously re-examine the role of government in our lives. ( Hence why i support Ron paul , as do so many in my generation)
I agree running a country is not like running a family, but Keynesian economics have failed, always running a deficit does not work.
want to save social security? remove the cap. problem solved. you are welcome.
Brendan, read The Shock Doctrine.
It is the Chicago Boys [University of Chicago - Milton Friedman] who are failing and need to be held accountable for the mess we are in. Historically, Keynesian economics were working -- however the corporatists weren't happy about their share of the pie, so they figured out a way to get more.
Argentina. Chile. Indonesia. China. Poland. South Africa.... the list goes on. And now us. They have some Americans convinced that their way works. It does not.
What the Friedman approach does do is create a greater disparity between the rich and the poor. It slashes safety nets. It creates unemployment. It smashes unions and makes a living wage close to impossible for most people. And it enriches the folks on top.
So far, there has not been one country in which the people have not suffered greatly at the hands of the kind of free market economy that they espouse. Sensible people see what a disaster-in-the-making it is, and oppose it, so the shock doctors can only push it through when there is some kind of crisis.
It is inhumane. Despite what the Supreme Court says, corporations are not people. If they were, many of them would need to be called to task for the pain and suffering they have directly or indirectly inflicted on people all over the world. But since they're not, they have very little legal responsibility to consider their effects on the people around them. And they know it.
Ron Paul is a Libertarian. If he is being up-front about that, he probably would not want the corporatists running our lives any more than he would want government running our lives.
The problem is that if the public sector is handed over to the private sector, that is exactly what will happen. Today if we don't like the government, we can elect different people. If we let the corporatists take over, we will have absolutely no power to change things.
If people your age like that idea (and I suspect most of them do not) then they had better think hard about it. I'll be dead and gone. You are the ones who will have to live with a future that looks like the Hunger Games (Suzanne Collins' trilogy).
Wall street would love to get their greedy hands on SS, it would be a great boon for them. Hard to say how much they would skim off the top !!
You wouldn't get to invest money anywhere you wanted either. Remember Bush was talking about 4 or 5 funds to get into. Really ?? and only USA funds.
I retired 4 years ago. Perfect timing as most all of my 401 is gone now.
I always get a kick out of the market mavens stating, "stay the course, you cannot time the market", of course while they are saying that, they are using computer models to sell, sell, sell.......
An older gentleman st my place of employment used to say, "you will just lose your money in the stock market, you have to take it slow and buy bonds"
boy, how I wished I would have listened to his advice...
if it weren't for SS, I would have nothing, after 40 years of working...
Remydon-2325813
- poor dear, your mortgage is 3.5%??? Our mortgage in 1981 was 13.5% - yes that's THIRTEEN AND A HALF percent for a 3 year adjustable rate mortgage. There were no 30 year mortgages.
I graduated in 1974 and it took a year to find a part-time job. Fortunately my student loan, singular, was paid off in a year, what with me working 3 jobs one summer, not counting work/study campus employment during the school year, plus a scholarship for graduate school that covered tuition. 6% sounds doable.
Congrats on the nuclear engineering - Navy? My son-in-law is 3 years into his nuclear sub enlistment (MM), plans on putting in his 20.
One big problem with boomers trying to save is that we are still supporting our kids to a great extent. I know my kids still get a lot of help from me.
Question. Will your kids end up supporting you because you spent your money on them? I prefer my kids to be independent now so I will not be dependent on them when I'm older.
well church: aren't you superior with that tough love? Harold said "from time to time". Lucky your kids you wont even do that. Let's hope they know what your definition of "family" includes.
I'm a retired Boomer,you need to have good savings and investing habits which I believe starts early thru your parents.It's better to be a saver then a spender if you want to retire early . Poor planning is solely depending on Social Security.
Absolutely local train! Absolutely...
Most people don't plan to fail...they fail to plan.
One big issue I see is that so many Millennials are out there looking for jobs!
I know a number of young people who graduated from college then could not find a job. Several went to grad school, are out, and they still have not found a full time position.
You can hardly look at savings -- or think about retirement -- if you don't have a job in the first place!
@ Morrigan
There are plenty of jobs out there for skilled labor, non union even. Just having a college degree or a masters degree does not guarantee you a white collar job.
I'm scared that so many in my generation will only settle for a white collar job because that is what they were told growing up is the only way to be successful and that is what they would be guaranteed with a college degree.
Brendan, you are right.
So many kids today have been handed the line that they must have a college degree -- and that skilled labor is for 'someone else.' Yet former students of mine have done well in the trades -- one of them keeps the plumbing working at a major ivy league university.
Thing is, most college grads are unskilled labor. Unless they get some additional training, they cannot build a house or put in wiring or repair an engine or even fix telephone wires. The best they can manage is retail sales or fast food or being a receptionist somewhere.
Maybe that will change. I hope so, because we need smart people who have the ability to fix everything from drains to refrigerators to cars!
Remydon --
Jerri has a good point.
You said -- "Not likely. I'm a nuclear engineer, the unemployment rate for that profession has never been much higher than 0% and the pay is fantastic. I'll be fine for my retirement regardless."
Nuclear power is a train wreck waiting to happen. Unless you have safe nuclear energy up your sleeve, you may not have quite the future you set out for yourself. After Fukushima, people are again thinking about the ramifications of a nuclear meltdown.
Things can happen. The social safety net is there for all of us. And it needs to be. My guess is that you are not old enough to remember the early 1960's, but even with Social Security -- which at that time had not kept up with inflation -- there were older people who were living in sheds and eating cat food.
Think about things in human terms. This "I take care of me and I don't care about anyone else" attitude is not healthy for individuals or for the society.
pfft! they can invest till the cows come home, wont make a bit of difference- they will end up losing it all anyway when the fed prints so much money that dollars will be as valuable as toilet paper.
Not true at all. WalMart, Apple, Google, McDonald's, and Bank of America will still be profitable as they march their way deeper into China, Latin America, and Europe.
A lot of Boomers have already retired and have no reason to invest further - they're using their savings/investments as income.
A lot of GenXr's are increasing savings as they look forward to retirement in about 25-30 years, but still have kids and mortgages, so are limited to what they can invest.
A lot of GenY are assuming there will be no social security, so are compensating by saving now before they establish families and their associated financial obligations.
Hate to tell you but a lot of us boomers are still working and not planning on retiring any time soon (we also assumed having watched and helped support the generation ahead, that the last thing you want to do is be dependent on social security, even if it is there when you retire.)
They were raised under the propaganda of the financial overlords we all suffer under, of course they buy in to that system. It will let them down as it has let everyone but the wealthy down.
I can't watch a football game without an hour of commercial programming selling me the life on a golf course if I only hand over my money to the banks so they can invest it in junk and leave me holding the bag as a tax payer. Of course young people buy into this myth. I've seen my 401k halved too many times to be enthusiastic about any retirement through investment. But hey, since I was born more Gen-Yers have been born every minute...
As a Boomer, about to retire, I remember over 30 years ago starting to set up serious savings for retirement. I got news for you, first words out of financial planners mouths? "Don't count on SS, it won't be there when you retire." So the Boomers I speak to really felt the way the X & Y Gens. Save -- it is all you can do. Every dollar you put away is going to be worth something at the end of the journey!
That is so true...and as a Gen Y Financial Planner I can tell you the same is being said today...with a little variation of the verbiage...
"Don't count on SS, a pension, 401(k), or IRA as your means of funding your retirement. With inflation, the devaluation of the dollar, the rising cost necessities, and healthcare, those funds might last you the first five years of retirement; if that."
I am reminded of a story that ran in a year or two ago. An elderly woman had passed away. She was living a rather modest lifestyle but did leave what assets she had to a local college. It turns out that as a very young woman she was working for a company called Abbott Laboratories just before WWII started. She invested $180 in 3 shares of their stock. Upon her death that $180 investment was worth over $7 million.
The moral of the story is this, the next time Apple introduces a new version of their iPhone or iPad, don't rush to the store to buy a new toy, buy a share of Apple stock instead. That is the way to grow your wealth, buying assets that appreciate in value.
This paragraph says it all:
Twenty-somethings “are returning home to live with parents post-college in record numbers,” pointed out Doreen Dodgen-Magee, a licensed psychologist and Gen Y expert. “In many ways this alone provides them with greater amounts of income to put toward retirement than others who went before them; paying off mortgages, covering rent, buying food, etc.”
Mom & Dad-kick them to the curb and you will be able to put money in YOUR retirement account rather than them sucking you dry!
I also see a lot of parents and grandparents continuing to support their children in various ways, and "Kick them to the curb" is one of my favorite expressions!
well good for you both...what a charitable take on family being there when you most need them.
AP-Excellent parenting doesn't mean paying your children's bills after they've become adults, it mean's being a responsible example. Funding a fully capable adult child slow's their progress. In short, the only lesson they learn is it's okay to get in financial trouble because mom & dad will bail me out. The animal kingdom has much to teach us all.
These adult children moving home are actually doing something right, and you would put a stop to it? It doesn't cost that much more to have an extra person in your house. Would you instead encourage your child to get a mortgage that they can't afford? Waste money renting an apartment?
In most of the world it is normal for single adults to live with their parents because it is cost effective for all involved. When I briefly moved back home a few years ago, I did the grocery shopping and cooked dinner most nights. I also enjoyed my parents' company far more than I ever did as a teenager.
For single parents especially (due to divorce or death), it can be lonely living alone. My mother was sad when I moved away again.
I think we're talking about two different things.
It's one thing to have family members sharing the same home, but another thing to have parents supporting an adult child who could support himself.
I am a Boomer. The Boom started about 1945. Some Boomers have already retired. Duh. Of course they aren't investing anymore.
Ten, twenty years ago we had no idea the economy would turn out the way it did and we did not save and invest according to today's necessity. Now it is too late for some of us to invest in large amounts. I barely make enough to live on much less invest much because I made life choices, including employment, during the good years. The cost of insurance (I spend $11,000 a year) is eating up my small income leaving little money to invest. I do the best I can, a few hundred a year. Beyond that, I simply have to hope for the best.
We were raised by the Greatest Generation who remember the Great Depression and the World War II years. That generation knew saving to be important, but we, the Boomers, were born into a good economy, and we were encouraged to let the good times roll, and boy did we let that happen. We were the product of our environment just as Gen Y is a product of their environment now that times have changed.
Comparing Generaion Y to Boomers is ridiculous. Gen Ys are better educated than a lot of us Boomers are and expect to make a great deal more money in their lifetimes. No generation is stupid. Gen Ys have the advantage of learning from history and from our mistakes. It is clear to them that the good times won't be rolling again in the near or even the foreseeable future. They read how we are struggling facing retirement. They know how health care costs keep rising and they know the increasing cost of health insurance. They read about and even experience seeing their elderly not being able to afford medicare and long term care. These discussions did not even exist when we were younger.
We were led to believe that Social Security would be there for us, even sufficient by itself. Younger people can fault us for that thinking, but they weren't there. Later we thought we were saving enough to supplement social security, and then a lot of us lost a healthy chunk of our investments. Our house values tanked. We lost our jobs. It's hard for over fifties to find employment, especially making as much as they did before.
I do have a healthy chunk of money that is not invested. It is socked away in my safety deposit box where no one can see it. It wouldn't be making any decent money anyway. I watch my "guaranteed fund" go up and down (mostly down, remaining stagnantly down). I'm certainly not going to put any more money into that.
What was your guaranteed fund? I am interested in hearing about that churchmouse3.
"Gen Ys are better educated than a lot of us Boomers are and expect to make a great deal more money in their lifetimes." That is not true at all. Better educated doesn't mean better jobs...I know of a Harvard graduate with their MBA who is earning commissions selling Toyotas (just above the national poverty line at $49,500). I know of a person with their Bachelors degree in Construction Management working at Target as a security guard for $10/hr.
Boomers enjoyed interest rates of nearly 13% in banks, 9% on government bonds, more job opportunities than there were legal, able bodies, relatively low inflation and for the most part low unemployment levels.
I am sorry your investment advice wasn't solid but there have been companies like Philip Morris who in the 1950's until the 1990's had a solid dividend return of great than 10% for over 40 years. So did Altria Group, GE, Coca-Cola, and others during that time period. If you had invested in those companies over the years and stuck by them you would be earning around $22,000 a year in dividends with a $1,000 investment back then (not to mention the stock being worth roughly around $3.5 Million today).
Here is the kicker and you said it best..."We were raised by the Greatest Generation who remember the Great Depression and the World War II years. That generation knew saving to be important, but we, the Boomers, were born into a good economy, and we were encouraged to let the good times roll, and boy did we let that happen." As you stated, your parents knew that saving was important. The fact of the matter is...there are two choices here...I) either your parents didn't teach you these things or 2) you didn't listen to your parents when they told you the stories about how they lived through the great depression and through WWI and WWII, how they saved, and how they had invested. So, you either 1)chose not to listen because the economy was good and you thought Social Security was going to be there as well as nice fat pensions, or 2)You chose not to listen because the economy was good you were encouraged and influenced by your friends, ads in the paper, on the black and white tv, and on the radio to let the good times roll.
Either way, history has been always repeating itself. Why doesn't America have jobs? Well, the answer is simple. 39% of the American workforce is retiring, since 2005, over the next twenty years. With Gen Y and some early Gen X already working we don't have the population growth to sustain that kind of massive job exodus. Therefore, companies had to start looking elsewhere to other markets where people were able to work. Asia, Latin America, India, as well as China's population was the need that filled the void.
This country's population is declining...6% are boomer parents, 39% of the countries population are Boomers, 14% is Gen Y and 21% is Gen X, 20% are under 14 years of age...as a result, as are the job opportunities. Unless you change the child labor laws again....
Why do you think there is an overwhelming demand for people in the nursing and insurance profession???? It is of no suprise...
Not bloody likely. If current trends continue (and they will because we elect morons to run the country) they are going to have no Social Security and they'll be paying ridiculously high taxes because at some point the morons they elect will finally have no choice but to pay down some debt.
There's only one Gen Y-er that I care about--my daughter--and I'm starting to think one of the best things I could leave her would be Canadian citizenship.
You'd thing that GenY would be smarter... investment banking is a sure way to lose everything as it truly is a Ponzi scheme! Hasn't the past decade proven that to be true?
It's only a ponzi scheme when the person doesn't invest your money, gives you a dividend that never existed, and a fake quarterly report.
I took out a $5,000 loan at 19.99% to purchase 250,000 shares of stock in a supermarket company in the US when it was $0.02 a share. I paid the loan off in two years and it is now worth $2,280,000.
If that is a scam....I'll take two please.
The study compares many Boomers who've already saved enough for retirement or are helping out kids and parents who were hurt in this Great Recession with Gen Y's who are often still living at their parents home and have nowhere near the same responsibilities. Consequently, it's absolutely ridiculous to imply that Gen Y's are more concerned with saving for retirement - especially when the Boomers see it staring them in the face! Also, what's the point of writing that "Wealth has been a preoccupation for younger workers." Virtually EVERYONE who's under 30 wants to end up wealthy! But do you think that someone with four years left in the workforce is now going to decide he plans to become wealthy? When I was under 30, I sure hoped I'd be very rich at my current age, 61. I'm not, though I'm pleased with the level of comfort I have after retiring early at age 56.
Add in the cost of student loans, housing, cars, etc and there simply are no jobs Gen Y (or Gen X in most cases) can get that will cover these plus retirement costs....
30 years out things are going to get ugly, if not sooner.
Gen Y is still young. Just as we Boomers were when we started out, and just as GenX was when they started out.
I can tell you that I grew up in the 'good times' -- with parents who had been young during the Depression and World War II. I agree that their ethics were passed along to us -- "We can't afford it" was the answer to most of my wants as a kid. My dad's life goal was to earn $10,000 a year. He never got there.
Some of the kids in GenX grew up with Boomer parents. Some of the Millennials also grew up with Boomer parents. As teens and young adults, GenX kids were often seen as 'slackers.' They focused on designer jeans and the latest 'toys.'
There was an oil crisis, the economy was stagnant, and it was another one of those times where good jobs simply weren't there. That changed, of course -- although GenX'ers are still caught in an economic mess, most of them have figured out how to manage. As a group they are quite savvy.
Millennials grew up in much more affluent times. Their parents did indeed give them a lot -- and are still supporting many of them. As a group they tend to be more conservative, more team-oriented and more rule-following. (Although there are notable exceptions -- I am impressed by the Occupy movement and by the Millennials I know who value life balance over becoming rich.)
It does not surprise me that they are interested in investing. They will soon realize that they will probably not make tons of money investing -- only the very rich do. Unless we can get corporate and banking reform, the Millennials will take the brunt of that gamble just as the rest of us did.
Yeah Millennials are nothing more than Post-Modern Eco-hipsters that majored in Hispanic Tras-Gender studies, move in back with their parents, sponging and thinking that texting on an iPhone is a valuable skill set. You wonder how we ended up with a president like Bammy!
BTW Millennials, there is a good reason why all these social media companies (that you worship) stocks are tanking after their IPO and it takes more than Bartista school to figure it out.
uncle: you might want to tone down that "back in the day" old fool lecture just a wee bit. That generation you deride is probably going to be providing your medical and other needs for quite some time to come (unless of course they share your vocabulary and your disdain for anyone who doesn't agree with you and all wealth generation...then, sure, they probably are kind of stuck longer term in that Barrista school--)
I'm between X and Y and with parents on the cusp of retirement age. People my age are seeing parents who have saved for retirement having to wait longer before they can retire and work a few more years. Some of us are seeing parents who didn't save and are now starting to rely on US to support them. And then some of us have grandparents who are at the point where they can't take care of themselves and this impacts the whole family. How my peers and I react? By not spending beyond our means, by focusing on making money instead of making a family, and by saving and investing wisely. My peers who are married or dating are buying homes while the rates are low and the single ones are often living with their parents so they can save more, even though they have tons of money. The ones who are married and have houses are still not having kids yet. Who wants to bring kids into the world amid financial uncertainty?
I prefer to invest and save and totally ignore SS. If it there in 30 years for me, great. If not, then I will not be dependent on it to survive.
You needs jobs to fund Social Security. No jobs, low paying service sectors jobs, will eventually be the end of SS. When it becomes insolvent, and it will, large reductions in benefits will hit us worse than the PIGS of Europe austerity. If Corporate America and the Government do not bring the manufacturing jobs back, Social Security is doomed.
SS was never intended to be the only income people have in retirement. With the fact that Medicare must be sinificantly restructured raising costs for everyone, young people must face the fact that they need to save throughout their working career to provide some kind of decent lifestyle when they do retire.
Which is great if the cost of living wasn't well over the wages most people make at the moment and will probably make most of their working careers.
The "Generation Y" youngsters will have their turn in a few decades. Welcome to the wild and crazy world of investing, spin the wheel of inflated expectations, send monies to crooks in brooks brothers suits, get blued,screwed and tattooed. If, getting rich is the most important thing in your life, get ready to be had.
I guess when you live in your mother's basement you have money left over to invest.
This is all just opinion and not hard #s. Let's see the real #s, Gen Y may think that $50 a month is doing "all they can" for all we know lol. Fluff article.
As a baby boomer, I saved my entire life and still work and continue to do so. What has happened is Wall Street greed and bankers stole the value of my assets and greedy corporations eliminated pensions along the way. I also remember very vividly being 18 and as all members of my generation believing there would be NO social security left by the time boomers got there. So far, that still seems to be where we're headed. There's no difference between generations as far as any of this goes. Boomers were the hardest working generation in the history of this country and both genders made it so. Let's hope the younger generations come through at the end with more savings than the boomers but I highly doubt that will happen seeing as how money seems to be really spinning the world these days. You also have to remember that when boomers were kids we saw our parents able to save money and it was still worth the same thing when they retired (gold standard). Unfortunately, that was stolen from us in 1972 by Nixon and his ilk and has NOTHING to do with boomers and everything to do with the greed that is running this country.
Nancy, I am a Boomer too -- and I agree with almost everything you say here. Dreregulation combined with greed has really messed up retirement savings for so many of us.
What I do not agree with is your statement that we are the hardest working generation in the history of this country.
Yes, we do work hard. You are still working. I spent 40 years working at my job, and would probably still be there if it had been a choice. But my mother's generation worked hard too -- whatever jobs they could find during the Depression, and fighting in World War II or doing jobs that supported the war effort. My grandmother's generation survived by working in sweatshops, and then raising their families on part time jobs if they were lucky during the Depression. My grandmother's parents (immigrants) had a corner grocery in Brooklyn and she quit school after grade 6 to work there.
(That was just my family -- I've said nothing about the farmers and the sailors and the tradesmen across history.)
I would say that almost every generation of Americans has a claim to be the hardest working generation. We can't claim that laurel all to ourselves!
Morrigan, I still stick to what I said. The boomers were the first (and last generation from what I'm reading) that both males and females went outside the home for full-time jobs all the WHILE still maintaining the household tasks on the side. My mother did that part for her full-time job. She had a LOT more luxury time than my generation ever did.
There is no money pot or locked box . SS is a tax nothing more . It ain't going nowhere either, it would be political suicide . Bush 43 wanted to let you have your social security to do with as you wish, same goes for newt.
But most Americans seem to want to let politicians take care of it because they feel there too stupid to make there own choices.
Which sucks for me because unlike most Americans i would rather invest mine somewhere where i could get it just a little sooner instead of waiting till i am almost dead to touch it . like there doing now by raising the age limit again and again.
The SS Trust Fund is alive and well, currently around $2.5 trillion. It is accounted for in that part of the national debt called "Intragovernmental Holdings". Instead of using the sale of U.S. Treasuries for the borrowed money, special-issue Treasuries cover the debt and interest is paid. By using the Intragovernment Holdings portion of the debt lawmakers, the CBO and other government agencies do not have to account for the loans in their budget projections. That has been done for many years by both parties to hide the real size of annual federal budget deficits. Check it out on the U.S. Treasury website if you want. It makes for interesting reading.