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Millennials and Retirement: Things to consider when you start defining your retirement plan

Millennials and Retirement: Things to consider when you start defining your retirement plan

If you have hit your 20's and have not thought of retirement, well, it's probably time to start. Yes, it is still a long way off, and yes, it is easy to imagine that when the millennial generation reaches retirement age, we will all live in a sci-fi world where health care is less complicated and care more robots. But in the real world, getting the best of your golden age requires careful planning before you reach them.

And this planning requires a new urgency if we consider that the half-century retreat will almost certainly be different from the current retreat. Life expectancy is increasing, climate change is threatening many popular destinations for retirees, people are less likely to marry or have children, and more people are working over 65 to survive. These are the main things to consider when you start defining your retirement plan.

Social Security Will Continue To Exist, but That Will Not Be Enough

We believe that our confidence in social security will disappear by 2034. To put an alarming figure in its context, this does not mean that no money will be available when the millennial generation is entitled to receive it. It simply means that there will be no surplus of social security funds. The latest social insurance payments come from taxpayers and will remain valid in the future.

Future generations may receive much less money in their payments if things continue. This means that social security will certainly not be enough to sustain you and may not even be enough to be an essential factor in budget planning.

You Can Retreat To A Cool Place Despite Climate Change

Cold areas are getting hot, hot places are getting warmer, and sea level rises. The increasing threat of climate change means that many of the current coastal hotspots will be abused by extreme weather and rising waters, to achieve the same momentum in half a century.

The situation that comes to mind when we think of an ideal destination for retirees will not be precisely the same; many alternatives will fill the void. Notes that in 50 years, there will be about 100 million Americans over 65, more than double the current number. This means a large market for retirement-friendly communities, with more space in the competition for seniors to spend their money in retirement.

Everyone has their concept of "good life". If you are very sensitive to the heat or want to play chess or want to ski or if you like Chinese cooking, create different location options for the elderly.

Total Independence Will Come With Life Challenges

According to the US Census Bureau, More young people choose not to marry or have a partner, and a growing number of people choose not to have children, which could lead to an increase in the number of elder orphans, elderly without spouse, children or other close families.

For young people who suspect that they might someday become members, research suggests they are more eager to save on the additional costs of independence later in life: long term care insurance, elder care and other expenses that might otherwise be incurred shared by a partner or a small number of children performing part of the task. (On the other hand, not having children saves a lot of money, so invest as soon as possible.) You will also need to decide who will make the medical decisions for you if you cannot make them yourself, which will increase your willingness to live and the power of health and will establish a power of attorney for a trusted person. You manage your finances: everything they need to start thinking well before they are required.

Elderly Work Will Become More Common

Once, the general rule was to save 10% of each salary, but today we see two major problems based on this approach. First, it is likely that 10% is not enough to cover the cost of living in retirement, especially with the uncertain future of social security. The best way to calculate the amount you need to save is to use a custom retirement calculator, such as Fidelity or Bank rate, to get an idea of what you can easily manage and the type of calendar you have defined.

But the second problem is that there is a difference between what you need to save and what you can save. And with the increase in student debt and the cost of housing, it is more challenging to reduce an amount than it was before, a problem compounded by the fact that life expectancy will increase over the next few decades. Longer life means a longer pension, which means you'll need enough savings to stay longer than your current retirees.

Many Americans think they will have to continue working after retirement for financial reasons. According to the Bureau of Labor Statistics, most are already doing it. For the millennial generation, whose collective lack of retirement savings has been well documented, this model will likely continue. Participation in the entertainment economy may also become a more popular option for seniors who need additional funds (assuming they are still in 50 years and have not been replaced by self-driving vehicle or freelancers).

All of this sounds sad, but one way to save for retirement is to make sure that you will be paid for your current job and for the future roles you are interviewing. Negotiating a higher salary early in your career can cost you thousands of dollars in the long run, as long as you save or invest correctly. Find out what kind of salary you should earn and do not be afraid to mention it when the time comes: bargaining can be daunting, but the potential happiness of your golden years is a powerful motivator. We certainly do not know much about how the world will be over 50 years old. Here is at least something that you can check now.

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