The "Big Boom Theory" For Retirement: Millennials, Pay Attention; You Are Next

Mom and Dad are lounging around their beach house, sipping Arnold Palmers(maybe with Arnold Palmer), deciding which golf club to use, which trip to take, and how to keep spoiling the grandkids… all this leisure and fun financed by the steady stream of guaranteed retirement income, which is, of course, coming from Social Security, pensions and investments. The family home is paid off, there is no debt… life is good. I see a picture painted with rainbows and dancing gnomes.

“Being out of debt and retiring financially secure represent the American Dream for a majority of Americans, and most are optimistic that they can achieve it, according to the 2014 Credit.com American Dream Survey. Retiring financially secure at age 65 represents the ultimate American Dream for 36% of those surveyed, while getting out of debt came in at a close second, with 25% of respondents choosing it as their definition of the ‘American Dream.’”

Here’s The Reality…

As Bob Carlson says in The New Rules of Retirement,  “…I’ve never seen a situation as dangerous as today’s. Investors, especially IRA owners, are facing unprecedented threats to their financial freedom. The trends are in place and gathering strength. Not only have people not saved enough, but the vehicles for saving may not be what we all expected.”

According to USA Today, “Almost a third of workers (28%) say they have less than $1,000 in savings and investments that could be used for retirement, not counting their primary residence or defined benefits plans such as traditional pensions.” Unfortunately, the picture gets darker, the rain has started, and the rainbow has disappeared. Employee Benefit Research Institute and Greenwald and Associates reported results from their telephone survey, in which 57% of their respondents indicate that “they have less than $25,000” in retirement savings. The lawn gnomes are looking for work.

The other reality is that Millennials are not saving for their retirement. I’m very aware that this generation has suffered from the Recession and they are trying hard to get on their feet. Bankrate recently reported, “Unsurprisingly, that late start in the working world may impede their ability to begin planning for the end of those careers. After all, many young people are still struggling to find meaningful employment to cover current expenses and crushing student loan payments. Saving for retirement is a luxury that many in the millennial generation…”  It’s not that this generation is just singing Kumbaya and is not aware of the eventuality of retirement. Bankrate also reported in a recent survey that, “the biggest retirement fear among 18-29 year olds is running out of money.”