Author Topic: NYT: For Millennials, It's Never Too Early to Start Saving for Retirement  (Read 2619 times)

CloserToFree

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I hesitated about where to post this because the overall topic is good - saving earlier for retirement -- but settled on the Antimustachian Wall of Shame because the article reflects so much of what is wrong with conventional wisdom about retirement planning. http://nyti.ms/2jb5KVD

The good:
-discusses importance of starting saving early bc of benefits of compounding
-highlights stories of several millennials who probably are better off than most in terms of at least having started to save/think about retirement (although that's kind of a sad statement)
-questions common assumptions about millennials being entitled non-savers (but also confirms some of them - see Peter Ruger story)
-the Ginger Hamilton story, which shows a young couple living off of one income and saving the second

The bad:
-seems to promote the idea that savings 10% or less of your income is good enough (Alex: "He makes about $52,000 a year and contributes 4 percent of every paycheck to a 4039b) account...and he puts away a little from every paycheck"; Mollie: "she would be comfortable putting aside 5 to 10 percent of her $45,000 income on her own")
-likewise demonstrates how widespread the belief is that we need to work 30+ years in a career before retiring (the Cherita King example - "I hope to retire at some point - my expectation is, after 30 years of service")
-the suggestion by a financial adviser that Ginger Hamilton (the good example in my view) should consider buying life insurance - ugh, classic thing that financial advisers push but which doesn't make sense for most people

I don't mean to be overly negative but when high quality media outlets like the NYT put out articles like this it drives me crazy - I mean, some of the advice is decent and it's good that they're shedding some light on why even young people need to prioritize saving, but I wish they would also highlight more MMM-like stories and separate themselves from the mainstream financial advising industry.  I know they've done pieces here and there on the early retirement phenomenon, but they're usually shallow and read as more of a novelty show than a well-researched piece of journalism.  I feel like the millennials featured in this article could get infinitely better advice if they came to the forums and posted case studies.

What did others think?  Did folks see this article in a better light than I did?

Nothlit

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I read the article and felt about the same as you. Relatively weak examples overall, except for the couple living on one income. I actually groaned out loud when I got to the life insurance recommendation.

Oh, and the 24 year old NYC waitress/aspiring actress, who says she wants to prioritize family time and traveling "by her late 60s or early 70s"  uh, what now?! She has $7500 in savings and claims she just barely scrapes by when tourist season is over. And then the "expert" says, "Mollie sounds like she has it all together." Yeah...right...

Telecaster

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Compared to most people, Mollie really does have it together.   

Travis

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Here on MMM we scoff at the idea of only saving 10-15% for retirement; however, if the rest of the population actually did that it would be a vast improvement over the status quo.

CloserToFree

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I just wish our society as a whole wouldn't set the bar so low for what people can achieve, FI-wise.  Nothlit - I think I groaned out loud too at the life insurance rec!  Bleh.

gimp

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You don't convince people to uproot their way of life, you convince them to take baby steps.

The guy who spends it all can save 5%, he's not in the frame of mind to save 30% or 50% or 65% or ...

jinga nation

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-the suggestion by a financial adviser that Ginger Hamilton (the good example in my view) should consider buying life insurance - ugh, classic thing that financial advisers push but which doesn't make sense for most people
If whole life, universal life, variable whole-life policies, Eeyuck.
But 30-year term life, level premium, from term4sale or intelliquote or selectquote, that's fine.
Obligatory Nod: http://whitecoatinvestor.com/how-to-buy-life-insurance/

MrsPete

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It's a step in the right direction.  Tell the average person he should save 40-50% of his paycheck, and he'll balk, walk away saying you're asking the impossible.  Explain to that same person that he should save 5-10%, and he may listen.