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The Almighty Buck

Most Millennials Have an Unrealistic View of Their Retirement Prospects, Analysts Say (hsbc.com) 557

From a blog post on research firm HSBC: HSBC calls for millennials to wake up to living and working longer, as research finds only 1 in 10 expects to work past 65. Most millennials have an unrealistic view of their retirement prospects according to a new report from HSBC. The latest report in The Future of Retirement series, Shifting sands, finds that on average millennials expect to retire younger than other working age generations. Millennials expect to retire at 59, two years younger than the working age average of 61. The survey of over 18,000 people in 16 countries finds that only 10 percent of millennials expect to continue working after 65 -- even as their generation faces unprecedented financial pressures and state retirement ages continue to rise around the world. This is despite 59 percent of millennials agreeing they will live much longer and will need to support themselves for longer than previous generations.
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Most Millennials Have an Unrealistic View of Their Retirement Prospects, Analysts Say

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  • Opposite (Score:5, Insightful)

    by Anonymous Coward on Wednesday April 26, 2017 @04:02PM (#54307919)

    I was thinking that I won't be able to retire the way things are.

    • Ever see the reality show "Live Free or Die?"

      That's my retirement plan.

    • Re:Opposite (Score:5, Interesting)

      by Austerity Empowers ( 669817 ) on Wednesday April 26, 2017 @04:40PM (#54308279)

      I was thinking that I won't be able to retire the way things are.

      Nor I. But when I was 25 I thought I would retire at 55 (and actually all things remaining equal, my plan and habits would have enabled it). But all things do not remain equal. Unexpected, previously undesirable and sometimes unforeseeable things happen in life: wives, children, crashing economies, jobs constantly being shifted overseas, etc.

      I guess this aspect of millennial thinking isn't new or scary. As with all of us, life will grind away hopes and dreams, no action is required from us.

      • Re:Opposite (Score:5, Insightful)

        by Quirkz ( 1206400 ) <ross AT quirkz DOT com> on Wednesday April 26, 2017 @06:29PM (#54309161) Homepage

        I hear you. Fresh out of college, I figured I was smart and impressive enough to find a way to retire by 50. Preferably by becoming a world-famous novelist in the next few years, or a dot-com millionaire by the turn of the millennium. Basis: nothing but wishful thinking, and the belief that I sure as hell couldn't keep doing this work crud five days a week for half a century. (Oh yeah, I can also distinctly remember telling my brother, "I really think I'm meant to win the lottery. I know the odds are against it, but it should happen to me.")

        By 35, married, dual income, no kids, I had a plan, based on actual, mathematical evidence (if with some optimistic assumptions) that I could retire at 60, with a paid-off house and a decent retirement fund.

        In my mid-forties with kids and a spouse that stays home, past one really terrible financial mistake with a house, plus several minor financial setbacks at work, I'm now looking at 65, more likely. I still have my doubts about the sanity or feasibility of doing this work crud five days a week for a few decades, but at least I've now worked almost half of the mandatory time, so there's that.

    • Re:Opposite (Score:5, Interesting)

      by Rosco P. Coltrane ( 209368 ) on Wednesday April 26, 2017 @04:43PM (#54308309)

      Exactly.

      I'm a gen X'er and I *know* I won't have a pension. Even if I retire, the government or the pension providers will default on me - either through inflation, or just because the damn pension providers will flatly announce they just don't have anything left in their coffers. I know this because they've already done it to my dad, who was born in the silent generation. So it's nothing new, but it sure won't get no better.

      So, I'm not putting any money in a system that'll shaft me and I'm not saving anything for old age - most likely I'll be working until I die anyway.

      What I do instead is, I enjoy as much free time now while I'm still young: I found me one of the last "old-style" jobs still available that lets me work 36 hrs/week with unreasonably great pay, in a heavily unionized old company that does business in a market that doesn't know the word recession.

      In other words, I've maximized my salary/work ratio and I do as little work as possible to enjoy life the the fullest while I'm still in a condition to enjoy it. Time enough when I'm old and decrepit to kill myself at work for a living.

    • sounds about right, though im not a millenial even, and it still sound about right. work 7-8pm every day and some more on the weekend, til death, seems to be the norm atm.

    • Re:Opposite (Score:4, Funny)

      by OakDragon ( 885217 ) on Wednesday April 26, 2017 @05:28PM (#54308685) Journal
      Me? Working until the day I die. And on the date of the funeral, will probably have to put in a half day.
  • by Anonymous Coward on Wednesday April 26, 2017 @04:02PM (#54307925)

    They don't expect to live past 65, given the state of healthcare in this country.

    • jail / prison has better healthcare then the ER!

      • by ColdWetDog ( 752185 ) on Wednesday April 26, 2017 @04:23PM (#54308131) Homepage

        No, it doesn't. It's a popular meme around here but completely untrue. In jail, they will offer you some base level of care for serious problems but prison officials get to determine how serious it is and if it gets treated. Jail providers tend not to be on the right side of the bell curve, so even if you get to see the doc or midlevel, you may end wishing you hadn't.

        If you need to be treated for a psychiatric illness, your choice of medicine will be significantly limited since many of those drugs can make you feel good (and thus have a marketable value in jail and are heavily restricted. If you hurt, well, too fucking bad. You get a tylenol or, if you're very lucky a tylenol and an ibuprofen.

        The major downside of going to the ER for care is that the guy next to you might be strapped down to the gurney and being rather vocal about it. He's the one that got the bill from the last time he was in the ER.

    • by EvilSS ( 557649 )

      They don't expect to live past 65, given the state of healthcare in this country.

      "The survey of over 18,000 people in 16 countries ..."

  • by sinij ( 911942 ) on Wednesday April 26, 2017 @04:02PM (#54307927)
    This view is unrealistic because it fails to account getting &*#@ed by boomers both with national debt, student debt, globalization suppressing wages, and lack of opportunities due to boomers working past retirement.
    • by stdarg ( 456557 )

      Don't forget, what jobs we can't export we want to import cheap labor for. Because we're so smart.

    • by Altus ( 1034 )

      yeah but on the other hand by the time they reach 59 they probably wont be able to get a job anymore with the way the economy is going... thats a form of "retirement"

  • by bistromath007 ( 1253428 ) on Wednesday April 26, 2017 @04:04PM (#54307943)
    Millenials don't expect to work past 65 because they'd be surprised if they make it past 50 without committing suicide.
  • by Anonymous Coward on Wednesday April 26, 2017 @04:06PM (#54307967)

    I have never met someone below the age of 30 that thought they had a chance of retiring at all. The majority expects Social Security to be gone, they have never seen a job with a pension, and they just lived the prime of their lives through the economic recession shattering both 401k investments and realestate.

    Millenials are keenly aware of how screwed they are.

    • by __aaclcg7560 ( 824291 ) on Wednesday April 26, 2017 @04:30PM (#54308199)
      The average person will see major recessions and a depression in their lifetime. My late father, who was born in the middle of the Great Depression and seen more than a few recessions, regarded the Great Recession as the Second Great Depression. I've been through the Dot Com Bust and the Great Recession, and I'm preparing for the Trump Recession that will happen in the next few years. This is not as bad as the 19th century where a depression took place every 25 years.
    • by amiga3D ( 567632 ) on Wednesday April 26, 2017 @04:41PM (#54308287)

      I just retired at age 57. I bought my own home and even though I'm not rolling in dough I don't have to work to live. No house payment and if I make it to 62 I can expect around 2K more per month which will set me up pretty nice. I spent a lifetime working in avionics with a 60K yearly income at retirement. I still expect to work but no longer at a daily grind kind of pace. I look to do projects and temp work just to make play money. Not bad for a high school education.

    • and you've accurately described my world view.

    • by clodney ( 778910 )

      I have never met someone below the age of 30 that thought they had a chance of retiring at all. The majority expects Social Security to be gone..

      While the state of Social Security is not good, it is not nearly so dire as that. It is one of the most popular government programs around, and current projections are that in 203x when the trust funds are exhausted (and yes, the trust funds are nothing more than bonds that have to be paid by the Treasury, so in some senses don't really exist), ongoing payroll deductions at the current level would pay 71% of current benefits (inflation adjusted).

      So a haircut, not a death sentence. And the popularity of the

  • by Moof123 ( 1292134 ) on Wednesday April 26, 2017 @04:08PM (#54307979)

    Seriously, the math is not hard. Live a simple life that concentrates on happiness instead of stuff, and make saving a healthy percentage of your income. You will be financially independent and have the option to retire well before 50.

    Or you can choose to save 10% or less, inflate your lifestyle at every raise and work until you are 70+. More likely you will get laid off in your 50's and have to "retire" badly when all you can find is low wage jobs.

    • by Anonymous Coward on Wednesday April 26, 2017 @04:26PM (#54308151)

      Your simple plan is dependent on having above average salary, not getting sick and no close family member getting sick. Low salary forces you into simple life and you still wont save all that much. It is kinda hard when cheap rent in bad district eats all money you earn. It is hard to concentrate on happiness when you drive almost hour and half each day to get home after long hours.

      Math is easy, it is just that economy does not guarantee everyone well paid job you can easily save from.

      • by virtig01 ( 414328 ) on Wednesday April 26, 2017 @11:08PM (#54310517)

        Your simple plan is dependent on having above average salary, not getting sick and no close family member getting sick. Low salary forces you into simple life and you still wont save all that much. It is kinda hard when cheap rent in bad district eats all money you earn. It is hard to concentrate on happiness when you drive almost hour and half each day to get home after long hours.

        The plan you're criticizing depends upon saving a percentage of income. It doesn't require an above-average salary. If you save 10% of income, you're buying a year of spending every 9 years (assuming 0% inflation and 0% rate of return). If you save 25%, you're buying 1 year of spending every 3 years. Percentages don't care if you're bringing in $100k or $50k.

        Savings rate is the most important number. A lot of people chase the income number, not accounting for the cost of attaining that income. This includes commute time and stress, which translates into health cost.

        Most middle class people won't retire in their 50s not because it's impossible, but because their savings rate is out-of-whack. If you optimize for Problem A, don't expect a solution to Problem B.

    • by ColdWetDog ( 752185 ) on Wednesday April 26, 2017 @04:30PM (#54308197) Homepage

      Actually, it's hardly that simple. While you espouse a perfectly reasonable plan, there are lots of things that can get in your way. That job that concentrates on happiness (whatever that is) just laid you off. You run through your savings in 9 months looking for another job. Then your wife comes down with breast cancer.

      I see this stuff all of the time. It's not just American Hedonism that is going to screw the Millenials - it's hedonism, no safety net and an economy run by those nice people that brought you 2008. If you're of the Buddhist persuasion then you can sigh, work some more on your karma and hope next time you get reincarnated as a housefly. The rest of us just get depressed.

      • Re: (Score:3, Interesting)

        by Maxo-Texas ( 864189 )

        Granted those happen- but buying too much house, eating out too much, buying too much car, traveling too much, buying clothing that's too nice, drinking after work, starbucks, and many other activities enjoyed by the young do not help.

        I lived on half I made and saved the rest from 1987 onwards. I retired 16 years early.

    • by jeff4747 ( 256583 ) on Wednesday April 26, 2017 @04:32PM (#54308207)

      You forgot to include a few steps:

      -Be lucky enough to never face a serious health issue.
      -Be lucky enough to never be unemployed for an extended period of time due to forces beyond your control.
      -Have zero family or friends that failed the previous two steps. Or even better, zero family or friends.

      • Plus the most important one - never get divorced as that is the most common setback people will face. My advice to my kids is to only marry someone who makes as much or more than you.
        • by slew ( 2918 )

          Plus the most important one - never get divorced as that is the most common setback people will face. My advice to my kids is to only marry someone who makes as much or more than you.

          If we apply these rules across the board, basically internet match services will only need 2 criteria: sexual orientation, and monthly salary. They would then only need match those that had equal salary (within some tolerance) and compatible sexual orientation.

          I had a similar discussion with a relative of mine the other day that insisted that her kids would need to "marry-up" or she would disown them. My response was how could that possibly work? Why wouldn't your future in-laws cut-off their kids for "mar

      • by Moof123 ( 1292134 ) on Wednesday April 26, 2017 @05:58PM (#54308967)

        Saving crap piles of money makes dealing with ALL of those issues much easier, they are not reasons to avoid savings. Money in the bank gives you options if you get sick, or family has a disaster. Living paycheck to paycheck makes minor medical or job problems an instant emergency. Not being able to keep your job because you get sick without large savings can be quickly ruinous.

        Becoming financially independent and retiring early gives you more time to cook healthy food and exercise more, not to mention huge reductions health destroying stress. Chances of major illnesses can be reduced greatly as a result.

        I've already been through a year long unemployment episode, and never want to be at the whim of an employer for my livelihood again.

        • That sound is the point sailing over your head.

          Your advice requires having a lot of good luck so that you actually have the money to save.

    • by MagicM ( 85041 )

      Work from 20 to 50, save 30%, and expect to live from 50 to 90 off those savings? I can do the math on my fingers to see that's not going to work.

      Even if someone saved 100% for 30 years, inflation will ensure they can't live off that for 40 years afterwards.

      • Work from 20 to 50, save 30%, and expect to live from 50 to 90 off those savings? I can do the math on my fingers to see that's not going to work.

        Even if someone saved 100% for 30 years, inflation will ensure they can't live off that for 40 years afterwards.

        I think by "save" he meant "invest."

      • by DogDude ( 805747 )
        Work from 20 to 50, save 30%, and expect to live from 50 to 90 off those savings? I can do the math on my fingers to see that's not going to work.

        You can't calculate compound interest on your fingers, is the problem.

        Even if someone saved 100% for 30 years, inflation will ensure they can't live off that for 40 years afterwards.

        I don't think that most people save by holding onto cash, as you're suggesting.
    • by Zocalo ( 252965 )
      No, the math's not hard, but achieving it is getting tougher all the time. Save 30%? Starting when exactly, given that the generation in question is almost certainly going to be stuck with either low paying jobs or having to pay off student loan debts before they can even think about sorting out a place of their own? Maybe one of the fortunate few that gets a big break with a successful startup or has the connections/skills/talent to reach the upper levels of their chosen career can still pull it off, bu
  • For the overwhelming majority of people in this country, retirement plans will be best summarized as "hope to die at work". Few people are making enough money beyond their needs to be able to save money towards retirement.
  • by imgod2u ( 812837 ) on Wednesday April 26, 2017 @04:08PM (#54307985) Homepage

    In other news, I hear a bunch of buggy makers expect to be able to pass their trade down to their grandson.

    Or coal miners expecting a boom in coal consumption.

    Or unskilled laborers expecting those pesky computers and robots to disappear someday.

    Or Americans expecting to work less, produce less but get paid more than the other 80% of humanity forever and ever.

  • by turkeydance ( 1266624 ) on Wednesday April 26, 2017 @04:09PM (#54307989)
    if i die before next week
  • by rhazz ( 2853871 ) on Wednesday April 26, 2017 @04:11PM (#54308009)

    Millennials expect to retire at 59, two years younger than the working age average of 61

    So they're only slightly more optimistic than actual stats would play out? I bet that's par for the course for any generation when they were still 20 years out from retirement.

  • by __aaclcg7560 ( 824291 ) on Wednesday April 26, 2017 @04:22PM (#54308119)

    The Wall Street Journal had a recent article about people who are least concerned about outliving their retirement savings are most likely to be a financial risk. The days of retiring at 65 and dropping dead at 70, which was the reality when Social Security got set up in the 1930's, are long gone..

    https://blogs.wsj.com/experts/2017/02/17/the-people-least-concerned-about-outliving-their-savings-may-be-most-at-risk-financially/ [wsj.com]

    • by jeff4747 ( 256583 ) on Wednesday April 26, 2017 @04:37PM (#54308255)

      The days of retiring at 65 and dropping dead at 70, which was the reality when Social Security got set up in the 1930's, are long gone..

      Actually, they dropped dead much earlier than that.

      Only 53.9% of men and 60.6% of women made it to 65. https://www.ssa.gov/history/li... [ssa.gov]

      • by bidule ( 173941 )

        Actually, they dropped dead much earlier than that.

        Only 53.9% of men and 60.6% of women made it to 65. https://www.ssa.gov/history/li... [ssa.gov]

        Well duh, they dropped dead before reaching their 20s.

        Straight quote from your link: "Life expectancy at birth in 1930 was indeed only 58 for men and 62 for women, and the retirement age was 65. But life expectancy at birth in the early decades of the 20th century was low due mainly to high infant mortality, and someone who died as a child would never have worked and paid into Social Security. A more appropriate measure is probably life expectancy after attainment of adulthood."

        And then they show of all the

  • by voislav98 ( 1004117 ) on Wednesday April 26, 2017 @04:22PM (#54308125)
    The "research" comes from the bank that would like you to be more "responsible" with your money, like giving it to them. This is a bank that has paid billions of dollars in fines over the last five years for money laundering and interest rate rigging. The key statement form the report: "Despite the apparent ‘reality gap’ in Millennials’ retirement expectations, most (68%) have started saving for retirement, at an average age of 26. Millennials are also more likely than other generations to take investment risks to boost their retirement saving..."

    So it's not that the millennials are unrealistic, they are saving a plenty, it's that the Fed and other national banks are keeping the interest rates artificially low to boost asset prices and prop up failing mega-banks including HSBC. So please HSBC, tell me more about how I need to "save" more for the retirement so that the government can bail you and your ilk out again when you blow up the economy with asset bubbles.
    • by swell ( 195815 )

      My search for 'hsbc ripoff' resulted in 36,000 results. This is one of the nastiest financial institutions on earth. The Wiki will explain some of the controversies around this London/Hongkong monstrosity but there is no easy way to grasp the financial pain that they have inflicted on ordinary individuals. Avoid at all cost!

    • If you want to save for retirement, I think the best option is gold. Physical gold.
      Prices don't rise much on a day-by-day basis, but every few decades there's a fairly huge jump.
      Fat chance that before you retire you'll experience such a jump in value. There's your gain.
  • Because robots.
  • by Hognoxious ( 631665 ) on Wednesday April 26, 2017 @04:26PM (#54308153) Homepage Journal

    Is there anything they *do* have a realistic view about?

    Not designing UIs, that's for sure.

  • Otherwise they might not be as accepting of their next 60 years of shit pay for shit jobs.

  • OTOH, since robots will have all the jobs, they won't have anything to retire from.

  • I'm in my 40s, so I've started thinking about it. You know what? I can't see myself retiring, and it's not about money.

    I just wouldn't know what to do with myself other than become a couch potato. I've already travelled the world as much as I care to (and have a bit more travelling to do to keep the spouse happy).

    I'm not rich enough to just do 'whatever', but have more than I need to get by. Unless I win the lottery so I can fiddle around on a large scale, I'll keep working just for something useful to

    • by DogDude ( 805747 )
      To me, retirement means not having to do anything I don't want to do. I'll work until I die, I'm sure, but I'll be doing stuff that I want to do, not stuff that I'm doing because I need the money.
  • I think not!
  • Millennials are starting to work later than previous generations, so they plan to make up for it by retiring earlier.

  • What kind of responses can you expect but kid's responses?
  • As a millennial, I always assume that retirement is permanently out of reach myself. I can save all I want and it won't do me any good when a small jug of milk will cost $100 by the time I reach 65.
  • Social security will most likely be around in some form, and may have to be expanded at some point to cover the realities that no one is saving on their own. I'm not worried about the baby boomers or the generation after -- they all have pensions and will most likely die off quicker than future generations will. Just think of how many people smoked in the 50s compared to today, or drank themselves into oblivion after work every night, or spent the late 60s on drugs. Overall, they will have more health probl

  • by OffTheLip ( 636691 ) on Wednesday April 26, 2017 @05:00PM (#54308455)
    I hope I don't come off as sanctimonious since I once thought I would never be able to save enough to retire. I thought, knew actually, my parents generation had it much better with plenty of jobs and pensions for when they stopped working. I decided to do what I could fully expecting social security to be bankrupt when I needed it. I still am not sure how that will play out since I'm not collecting yet but I started saving earnestly some 30 years ago, weathered some tough market swings and still came out ahead. The stock market is really the only way to generate enough wealth to beat inflation unless you have an inheritance coming your way. There is plenty of useful, free advice to assist you on your journey. I recommend the Boglehead forum as a good place to start. As you close in on your retirement goal reduce risk and expect market volatility. So live below your means, save as much as you can, don't pay unnecessarily for financial advice and stay the course. Nobody knows the future. I mean this with great sincerity.
    • by Sebby ( 238625 )

      Good advice, but I fear it won't work these days, given the people getting voted into politics these days (not talking only about the US).

      Wages will continue to be suppressed, until there's basically a revolution (the protests of the 2008 financial crisis was really nothing more than two kittens having a hissy fit, and looking absolutely adorable while doing it).

  • Then when a quarter of you die while on the job, we can send those benefits to cover the people who live longer than average.

  • Most Millennials Have an Unrealistic View of Everything.
  • by Dunbal ( 464142 ) *
    We've been living in an economic climate that actually punishes savers for almost a generation now. This is to be expected. I honestly don't care because I will be dead soon. But those robots had better get good at making stuff extremely cheaply because hungry people are the surest way to tear a civilization apart.
  • .... about getting stagnation of wages under control within their lifetime.
  • Throw in stupid notions like "tiny houses" which rob naive millennials of asset appreciation vehicle "home ownership" that generates American's greatest wealth; and you've got a guaranteed work till death prospect.
  • by Kazoo the Clown ( 644526 ) on Wednesday April 26, 2017 @08:49PM (#54309975)
    The problem is, a "realistic view" is nearly impossible. You can't predict how long you are going to live, how much medical care you are going to need, and what might happen to social services such as Social Security and Medicare/Medicaid, and consequently, how much money is "enough."

One man's constant is another man's variable. -- A.J. Perlis

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