Millennials approach retirement with different attitude
GREEN BAY (WLUK) -- The millennial generation is in the process of taking over jobs being vacated by retiring baby boomers. Like the generations before them, millennials come with a new approach to work and retirement.
Millennials are typically described as those born between 1982 and 2002. There are roughly 81 million of them.
They are the targeted consumer of those selling $5 coffees. No one is more 'connected' through social media and text.
Technologically savvy, ambitious, self-confident--they're planning to change the world. But when they're finished will they have saved enough money to retire?
Are they thinking about retirement?
“I think of it but probably not in the same sense as most folks and really, as an idea, it's not something I tend to pursue or do,” said Matt Bero, 26. “I don't intend on stopping at any point.”
That's right. Matt Bero, millennial, isn't planning to retire.
After five years in corporate America he left to start his own design business. He says he's investing in himself. He finds no real point to 'save' for retirement.
“I mean there's no plan to really stockpile anything away to kind of sit idle and not do stuff,” said Bero. “If you want to do a backpacking trip to Europe it doesn't make sense to do it when you're 60 and less able. Do it now to get that experience.”
Do you think this is a millennial attitude?
“I think it's maybe an evolved attitude,” said Bero.
Bero is not necessarily the norm for millennials. In fact, a recent national study found the average millennial begins saving for retirement at age 23. Four years before the average Generation Xer started. And 8 years sooner than Baby Boomers at age 31.
Marc Schaffer is an assistant professor of economics at Saint Nobert College.
“I think each generation has gotten a little progressively better because they're starting to learn from the previous generations,” said Schaffer.
At age 30, Jacob Bauman is among those millennials who began saving right away. After college he joined corporate America and started his 401(k) contribution.
Bauman is well aware of government statistics that show more than half of baby boomers 55 and older have no real retirement savings. And nearly a third of workers in that age group plan to work to at least age 70.
“In my case I'm definitely using that information to make financial decisions so it's one of the reasons I take advantage of everything I have available to me today,” said Bauman.
But as a millennial, investing in his retirement isn't just about saving. It's about that evolved attitude.
“So maybe this is one thing different with millennials is when I think of investing I want to make sure I'm doing it in a moral way, in a way I'm okay with,” said Bauman. “So it's investing in companies that are local, American made, that have good responsible practices that are going to be sustainable.”
Both Bauman and Bero question, with rising college debt for students, how they can be expected to save the 10 to 15 percent of their salaries recommended by financial planners.
“The conversation we have today may be very different than the conversation we have in 10 years when a lot of those debts are paid off,” said Bauman.
And neither are really counting on Social Security benefits to help them out. A recent Wells Fargo Millennial Study found nearly three-fourths of millennials are skeptical of Social Security's role in their retirement.
“There's no real guarantee that's going to be there so I can't really count on anyone besides myself,” said Bero.
Most millennials have another 30 years or so before they reach the typical age of retirement. And while they're aware of what's been done in the past, they're blazing a new trail with a new attitude.
“It's not that I'm not worried about it, it's that I view it differently and kind of prepare for it differently,” said Bero.