Why Are Millennials At Risk of Working Into Their 70s?
Retirement can technically begin at the age of 62. This is the earliest age that people can begin to collect their social security benefits, although they will not be able to withdraw the full amount until the age of 67. (Currently, full benefits are available at age 66 years and 2 months, but this will gradually increase to the age of 67 by the time millennials are ready to retire.)
Even with full benefits available at the age of 67, a large number of millennials are at risk of working into their 70s. While this may not sound that bad, it could pose a few serious problems.
The Issues With Extended Working Years
The first issue is that for some, their health won’t allow them to work into their 70s. This could cause a serious increase in poverty ratings for senior citizens when it comes time for the millennial generation to retire. This not only effects an individual’s quality of life on a small scale, but could end up harming the economy on a grander scale.
The second issue has to do with the workforce, and how larger numbers of senior citizen workers might effect the overall balance, thus resulting in a domino effect that harms the prospects of the generation just then entering the work force. The way it is supposed to work is that older workers leave the workforce so that younger workers can enter it. Traditionally, these older workers were taken care of with their retirement savings, social security, and (often) their children or grandchildren’s assistance. If the older workers aren’t leaving the workforce, then those jobs don’t become free.
But why are millennials at risk of working into their 70s? It’s a multitude of different reasons that all come together for this specific generation – and potentially the next one or two which follow.
The millennials generation literally started their adult lives in debt. The astounding amounts of student loan debts affecting this generation and those that follow keeps them in debt into their 30s – and possibly, their 40s. When this is paired with higher costs of living that aren’t balanced out with increased wages, you have a financial crisis.
This crisis means that a large portion of millennials are currently living from paycheck to paycheck, and are unable to save anything for retirement. Even those who are saving something are far behind the expert guidelines of a year’s salary by age 30.
Although the financial issues affecting the millennials generation are primary to blame, there are two other major factors in play. One is the uncertain future of social security. The decrease in funding for social security benefits could cause there to be less available for the millennial generation – and this means that they will have to work longer to save more.
When you pair all these other issues with an extended expected life span, you have disaster. People living in the US in 1960 had an average life span of around 69 years. The average modernly is just shy of 79 years.