Saving money is not fun, especially these days and especially for young people. In addition to forcing you to deny yourself all those amazing new things you need to have, largely stagnant wages means you likely have less disposable income now than ever. Millennial essentials such as rent, student loans and brunch have all seemingly skyrocketed.
Putting even a little money in a Roth IRA plan or company sponsored 401(k) at 21 vs. 31 offers 10 additional years of savings and growth. Investment income from a brokerage account is reinvested into your principal and a 10-year head start can come with enormous consequences when you’re 70. It doesn’t mean you can’t start saving at 30, it just means you’ll need to make a lot more over the course of your lifetime to make up the difference. Some employers actually match 401(k) contributions, and so anything less than putting away the maximum amount is nothing short of walking away from free money.
None of this is that hard. Millennials are not as stupid as smug GenXer’s would have you believe, and yet we are not saving enough. Unfortunately, my generation has not been served well by those they turn to for news.
In 2015, the website Elite Daily ran a horrifically irresponsible article headlined, If You Have Savings In Your 20s, You’re Doing Something Wrong. (I am not linking to it because I don’t want to give Elite Daily the clicks.) The thrust of the essay was essentially that all income earned should be immediately put out the window toward expensive nights out, “networking” events and living the life you were born to lead.
“People who are saving in their 20s are people who don’t set their sights high. They’ve already dropped out of the game and settled for the minor leagues,” writes author Lauren Martin. “When you care about your 401(k), your life is just ‘k’.”
This breathtaking stupidity is unfortunately not just limited to glossy millennial blogs. Even as venerable an institution as The New York Times saw fit to publish an ode by Lee Siegel on the virtue of defaulting on college loans and how he shouldn’t feel pressure to accept any occupation less than his dream job as a writer.
“I chose life,” said Siegel. “That is to say, I defaulted on my student loans.”
He also chose a life of poor credit and garnished wages. Minor details.
We live in miraculous times. In the United States today, the average man can expect to live well into his late 70s, for a woman, it’s past 80. With the blessings of modern medicine, millennials will likely be stomping around well into their 80s and 90s. This may sound great, but it will also likely be adding years of non-income-generating time to your existence.
Traditional government safety nets like Medicare and Social Security are already failing today’s seniors and will likely not offer much to succeeding generations. The only true security will come with what you put in your own wallet by your own hand.
You have a lifetime — but it goes fast.
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