Launching into adulthood, no matter how exciting, is not something to be taken lightly. Millennials really do have it rough, compared to other generations at least. The fallout that occurred from the great recession has caused a delayed start to what could have been full- fledged careers for so many.
This delayed start has impeded their ability to be able to plan for something like say retirement. Most young people are preoccupied trying to find decent employment to cover crushing expenses and student loan payments. For most in the generation Y saving is a luxury they cannot afford.
Saving consistently has always been the way to plan for retirement. Balances in retirement account have risen. But it is not all bad, fresh developments in the 401(k) have made it a lot easier for most people to be able to save and invest adequately, if not at epic proportions.
It is true that young people earn lower wages than the people who have longer tenures. Wages have been stagnant for college grads and high school students. But this is only part of the reason. Finding a good job is not exactly a cakewalk for young people, especially when you graduate school and are kicked out into a down economy. Labor market is not what it used to be, which makes its almost impossible to achieve standards set by older generations when it comes to saving for a house or retirement. Graduating into an economy with high unemployment rates translates into a 1.8 percent earnings loss for each year over ten years. Getting a job in a lucrative field may serve as a nice cushion, but fresh graduate seldom are offered more than the average income.
Saddled With Student Loans
Most people who dominate Generation Y are swimming in student debt. Sure older generations took and paid student loans all the time, the difference is that the percentage of the heads of a household holding education loans has increased by 15.6% since the beginning of the 21st century. Right now 42% of households with a family member under the age of 35 are trying to pay off student loans. With so many people struggling with loan repayment, their priority is not running out of cash before the next payroll comes in than working to save for retirement. Though education is important for everyone, unimaginable loans have set people back.
Younger people have always been a little slow when it comes to saving for anything, according to the chief of communications of ASPPA. This seems a likely explanation because someone who can only think and plan for the near future, would never worry or be bothered by something they would need decades from now. This situation, when faced with the need to spend on something in the present, would compel a person to spend than save.