Young Americans Still Think They’ll Retire at 60
Even though no one really does that anymore
Twenty years ago, the average age of retirement in the U.S. was 57. Now that number has climbed to 61—and it doesn’t look like it will fall anytime soon, thanks to the recession, which crushed many Americans’ savings and overall wealth.
A good chunk of Americans are pretty realistic about how this turn of events will impact their plans to enjoy a post-career life of leisure. As indicated by a Gallup poll from May 2013, more than a third of Americans say they expect to retire after 65—probably a decent estimation given the way the data has been trending.
Ironically, though, it seems that many younger Americans—the generation raised at exactly the time when retirement became less and less viable—have a far more Pollyannaish view. A recent study by the Federal Reserve found that only 14.6 percent of people over the age of 60 believe they will stop working entirely after their official retirement—versus a whopping 34.6 percent of 18- to 29-year-olds who expect they’ll retire completely at 60.
In fact, more than a quarter of Americans over 60 plan to work as long as they can. Only 15.8 percent of 18- to 29-year-olds say the same. Clearly, the older people get, the more they realize retiring isn’t as easy as it sounds.
Furthermore, a lot of 20-somethings who are convinced they’ll enjoy a permanent vacation haven’t even begun planning for it. Of those surveyed under age 30, 40.7 percent say they haven’t given any thought to financial planning for their retirement. The same study found that 49 percent of this age demographic rent rather than own their homes because they can’t afford the down payment. A separate study by Harvard University found that more than 2 in 5 18- to 29-year-olds either carry student loan debt of their own or live with someone else who does.
Given the clear evidence that retirement is a long shot for a lot of these 18- to 29-year-olds, it’s hard to unpack exactly why they haven’t come to the terms with the facts, even as they watch their weary grandparents continue to punch the clock. Perhaps we could chalk it up to the boundless optimism of youth. Perhaps it’s a sign of the positive and considerate mindset of Generation Y. Alternately, it could be because they’re too busy worrying about more immediate hurdles in life—you know, like not owning their homes and their crushing college debt. Actually, given all the stats we’ve just seen and the changing economic climate around us, this state of denial is probably just a coping mechanism.