My parents are now at a stage in their lives in which they are contemplating their retirement plan. I recently asked my mother what people actually do when they retire. She looked at me with slight uncertainty, as though this wasn’t a simple question to answer.
Understandably, my question was a very generalized, one as unspecific as “what is a lawyer’s favorite color?” or “what do French people eat for dinner?” However, I believe what perplexed my mother most was how her recollection of what her parents did upon retiring probably does not measure up to how she envisions spending her retirement. The world has changed since my mother grew up in the 60s. I would assert that there are many people of my mother’s generation who also struggle with the idea of retiring quietly.
Given this truth, it’s difficult to imagine what might be in store for my generation — a cohort that hasn’t yet invested much time and thought into retirement preparations.
For starters, Millennials are likely to face a lot of obstacles that previously did not exist. The future of social security benefits and employer 401(k) plans are uncertain and meanwhile, recent graduates face record-high levels student debt upon leaving college. With a job market that is still very restricted, it’s a very real concern whether or not the young adults of today will be able to look forward to a retirement of any kind.
A Nerd Wallet study estimates that college-educated Millennials are looking at an average age of 73 for retirement, compared to the current median age of 61. This news probably doesn’t come as a surprise, as many young adults already expect a tough road ahead when it comes to planning for retirement. Aegon Global Insurance sites that 59 percent of working adults between the ages of 20 and 29 years “expect to be worse off financially than their parents.”
Yet, it still doesn’t seem to bother us that much. And, only 29 percent of us have used a retirement calculator to estimate how much of our salary we should be saving away, according to Forbes. Could it be that the traditional idea of retirement just isn’t something with which we want to concern ourselves?
It certainly seems that way. With the likely reduction in services for seniors that our generation can expect to receive, the temptation to continue working later in life is increasing. The old workplace model itself is changing. A job is no longer for life and movement within the job market is more commonplace. The digital world of social media also makes the prospect of self-employment much more accessible.
According to Intuit, by 2020, more than 40 percent of the American workforce will be operated by freelancers, contractors and temp workers. Entrepreneurship is rising and will likely be something any aging Millennial will be keen to continue.
What about spending time with family, traveling the world or just leading a life of leisure, you ask? True, these are popular uses of time for current retirees, but how much appeal will these activities offer for Generation-Y when they face the prospect of retirement. I would hope that spending time with family will always be something with which we want to fill our free time, but Generation-Y has had better training and practice than any previous generation regarding how to balance a career and a family.
I don’t see us cramming to make up for lost time later in life in the way that are parents might feel the need to do. Meanwhile, by the time we are even able to retire, our grandchildren are likely to be in school, while their parents are working, which leaves us with nothing to do!
World travel is far more expedient than it has ever been. The ease and affordability of traveling to foreign countries means that we no longer have to wait until our older years to take those once-in-a-lifetime trips. In fact, many of us would rather embark on those now, while in good health. Lastly, a life of leisure is boring. Our generation grew up learning how to multitask and take on extra-curricular activities until the resume-building experiences bled out of our ears.
It seems like a lifetime away, and optimistically, it is. But, retirement nags in the back of our brains every so often. With the current societal changes that are forecast to take place, the prospect of retiring seems very problematic, but on second thought, how much will we even want to retire? It is likely that Generation-Y will rewrite the rulebook when it comes to this subject.
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