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Retirement outlook for 20-somethings

People of this generation enjoy few of the advantages that enabled their grandparents to build worry-free golden years.

By MSN Money Partner Jun 11, 2012 11:08AM

This post comes from Tim Sullivan at partner blog Get Rich Slowly.

Get Rich Slowly on MSN MoneyOver Memorial Day weekend, a few friends and I took an RV to Banff in Alberta, Canada. I'm from Chicago and have been in the Pacific Northwest for only a few short months. We Chicagoans are flatlanders and the splendor of the snow caps that now surround me is a source of a daily inspiration.

Image: RV © Grant Faint/PhotographerWhile we were heading through Glacier National Park, I sat at the coffee table playing cards with my girlfriend, contemplating the turquoise meltwater when Brian said from the front seat, "Take a good look, my friends. We're gazing into the future. Here's us in 40 years. This is what retirement looks like."

It led to an interesting discussion among a group of 20-somethings about how we picture our retirement. Visions of Florida, golf courses, cruises and RV trips didn't fit for any of us. We agreed that our generation, with its student debt, a terrible economy and little ability to trust in the solvency of Social Security, has to redefine its image of retirement.

Why 65-ish?
Right now, according to the website for Social Security, I'm set to retire in 2053, a year that seems positively scifiesque. My NRA (normal retirement age) is 67. Why 67?

According to the website, Social Security was set up as part of FDR's New Deal in the 1930s. The retirement age was set at 65 to pay older workers to leave the workforce, making room for younger workers. Keep in mind that the average life expectancy for men in the 1930s was just under 60. In other words, the government would give you money to stay at home only if you made it to the modern-day equivalent of 89 years of age.

My great-grandparents would have benefited from Social Security if they could've lived another 10 years. My grandparents and their contemporaries cashed in, propagating the image of retirement as golf pants and yacht shoes. Since then, the retirement age has gradually been increased.

Post continues below.

Life expectancy on the rise
With the rise in life expectancy and population growth has come an increase in how many people are getting Social Security benefits. I found these numbers on the SS website:


Number of recipients

Dollars spent





























I agree that spending mere millions to usher older workers to a more relaxed lifestyle, making way for the young blood ready to throw their hats in the ring, was a great idea. What's harder to chew is the now 50 million-plus living well past 65 and the $615 billion going to them each year. I'm not here to debate the ethics of it; just the reality that, with the baby boomers readying themselves for retirement, I'm not banking on much coming my way when 2053 rolls around.

Baby boomers' parents
My parents' parents were able to make out like bandits for the exact opposite economic freakishness that my generation is struggling with today.

  • They had no reason to doubt the strength of Social Security.
  • They graduated college with little or no debt and could start saving immediately. (The GI Bill covered college for many of them.)
  • Half of them had pensions, which is far from reality today.
  • When they were ready to sell their homes and move to sunnier pastures, the baby boomers were coming of age, quickly filling any vacancies and driving up housing costs.

Gen Y-ers do not enjoy any of these advantages. Even if my dream was to be behind the wheel of a golf cart for the rest of my days, the odds are against me.

Meaningful retirement
As we got closer to Lake Louise, we all attached ourselves to the idea of a meaningful retirement rather than a leisurely one. Two of my RV companions work for big corporations, involving a lot of desk time -- jobs they like fine but probably wouldn't want to do for the rest of their days. The list of things they could see themselves doing in their golden years includes:

  • Group exercise instructor.
  • Tour guide.
  • Museum docent.
  • Farmers market worker.
  • Secret shopper.

These options are geared to their specific passions. They will generate some income and take some time and energy. This isn't a list of full-time jobs, but activities to keep them young and not wholly reliant on savings. From there, I spouted off some of the tenets of Get Rich Slowly, which I plan on following in retirement:

  • Money is more about the mind than the math. Knowing the numbers is secondary to playing the mental money game well. One thing the older folks around me seem to have is wisdom. With another 40 or so years to figure out how to control my spending, I hope I'll have most of the mental aspects of money down.
  • Small amounts matter. I practice frugality now and will continue to in the future, whether I'm earning every dime or it comes from savings or Social Security.
  • Large amounts matter, too. Yes, I'll be frugal, but there are a lot of smart decisions I can make before retirement to free up finances during retirement. Whether it's paying off my mortgage or making the right decision on a car, getting the bigger expenses out of the way will free up a lot of possibilities.
  • It's more important to be happy than to be rich. I don't want to worry about money in retirement but, even more so, I don't want to obsess about money in retirement. I want to continue to cultivate my joy in simplicity, and have that carry through indefinitely.
  • Do what works for you. There's no right way to save and there's no right way to retire. If you have your golf clubs picked out, good for you. If you're hoping to do your same job past 100, awesome. I like the idea of a physically active retirement. Maybe that means picking potatoes, maybe it means leading those super cool pool dance classes. Whatever you do in retirement, make it meaningful, not just leisurely.

I can't predict what my retirement will look like. I know the game has changed and that the image of the perfect retirement no longer exists. For now, I'm going to continue to save for whatever the future may hold and, when I can, enjoy a little taste of what my great-grandparents might have experienced in an RV, gazing wistfully out the window as the scenery flies past. Why wait, right?

Have you started thinking about your retirement options? For those of you closer to your NRA, what will retirement look like for your children?

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