From the Washington Post another kicking for Millennials. A number of analysts are looking at lower returns for investments over the next 20 years than the last 20 years (I broadly agree). This implies Millennials will need to double their savings:
If average annual stock market returns fall by two percentage points over the next couple of decades, a 25-year-old saving for retirement would need to more than double how much she is saving to make up the shortfall, according to an analysis by the Employee Benefit Research Institute.
So, for any Australian Millennials listening:
- You are going to have to stump up world leading prices for Australian housing, so no more smashed avocado.
- You will need to pay extra taxes so that your parents and other baby boomers can retire in comfort without having to pay tax on investment profits. This probably includes the profits on the over-priced property they just sold you.
- You just paid (or are still paying) far more for your university education than your parents did. You are paying infinitely more than most of our politicians who had free university education. And your job/pay prospects are worse.
So, it shouldn’t be too much of an issue for you to double your savings rate so that you can retire without being a burden on society.
Just don’t run foul of Centerlink in the meantime.