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What Will Retirement Look Like for Our Adult Children?

For decades, the three-legged stool was the metaphor for funding retirement: Social Security, pensions and savings/investments. Because of the recession and drop in pensions, the stool started to shake. That hasn’t escaped the notice of our adult children as they watch parents head into retirement.

Savings spelled out with game pieces

The upside of those watchful eyes is that many millennials have begun saving for their own retirement. At an unprecedented age of  22, some 70 percent of working millennials are socking money away, according to a survey by the Transamerica Center for Retirement Studies. By contrast, the average boomer began saving at age 35 and average Gen Xer at 27. Thanks to this early start, millennials have amassed an average $32,000 in their 401(k) accounts, contributing about 8 percent of their salary.

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The first millennials will retire in 2046 at age 67, and they look to the future knowing that they will have to fund their own retirements. “Millennials witnessed a very traumatic chapter in the history of the American workforce,” says Transamerica president Catherine Collinson. “They saw parents lose jobs, home value and [value on their] investments, and more than a quarter had difficultly finding a job.”

So what will retirement will look like for our children? Collinson shares a few key points:


  • Social Security. “Many millennials are concerned that Social Security will not be there for them, and they are not entirely irrational,” Collinson says. Unless the system is reformed, the Social Security trust fund will empty in 2033, more than a decade before they are eligible to retire.
  • Worries about parents. More than 40 percent expect to financially support aging parents or other family members. “Millennials witnessed firsthand the challenges and struggles faced by parents through recession and retirement preparation. Many of their grandparents are also financially struggling,” she says.
  • Working longer. More than 60 percent want to retire by 65. While that’s a great goal, Gen Y needs to recognize that they have pushed back the average age of getting married, starting families and buying houses, so those hefty lifestyle expenses may extend well into their 60s and beyond.


With these things in mind, what will replace that teetering stool for our adult children? Collinson predicts a “wobbly four-legged table” with Social Security, 401(k) and similar plans, investments and work. To prepare for that, she has two suggestions that we can pass along to our adult children.

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While many millennials are typically optimistic about continuing to work into their 70s and 80s to fund their retirement, Collinson advises we remind them about what can happen to the best laid plans. Not only may they change their minds as they journey through life, but working conditions, family and health can also impact them.

“Expectations are often changed by circumstances beyond our control,” she says. In case working forever doesn’t pan out, they need to maximize their investments. To become better informed about investments, she points to online retirement guides.

Boomers have witnessed the ground shift and disappear under entire industries. Collinson advises us to warn our adult children about careers ripe for disruption. “Urge them to look beyond their current job and see how they can translate skills and get additional education and training,” she says.

While they are off to a good start, she adds, our children have a long journey ahead. “Millennials are super savers but weak on planning other aspects of retirement."

Mary W. Quigley’s blog, Mothering21 ,  tackles parenting of emerging adults and beyond.

Photo: banarfilardhi/iStock

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