Now We’ll Have to Save Twice as Much for Retirement

If we’re Millennials.

Last week, we learned that the 401(k) hasn’t worked the way its initial founders predicted it would:

Bad News About Our Retirements

This week, we get the not-all-that-shocking information that Millennials will need to save twice as much for retirement as their parents did (assuming their parents were privileged enough to be able to save for retirement and that their retirement savings weren’t decimated in the 2008 crash).

Millennials may need to double how much they save for retirement

If those gloomier [stock market] outlooks hold true, workers saving for retirement today may not get as much from their portfolios in the long term as previous generations did. Advisers say that millennials, who are decades away from retirement, will need to save more — in some cases twice as much as they were saving before — to make up the difference.

“Realistically, most people who are reading this article probably should expect to work a little bit longer than their parents did,” said Tim Koller, a partner with the consulting firm McKinsey.

I love the use of the past-tense “did,” as if all Millennial adults’ parents had already retired and weren’t, say, still working because they can’t afford to quit yet. (Or because they love their work. There are a lot of reasons.)

So how much should Millennials be saving/investing for retirement?

Exactly how much millennials should be saving for retirement in light of these lower projections is up for debate. Many financial advisers recommend that workers aim to save between 10 and 15 percent of their pay. But other experts say millennials should save much more, up to nearly a quarter of their income, to avoid running out of money in old age if stock market returns fall.

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Enjoy doing that while you’re paying off your student loans or dealing with extraordinarily high rent, real estate, healthcare, and childcare costs.

While you’re at it, please remember that although wages have been stagnant for decades, in terms of education and productivity Millennials should be the highest-paid adults in American history.

Millennials Should Be Highest Paid Adults In American History

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