Hey, European here. I often hear on social media and in the press people saying that they won’t be able to retire. Especially millennials and Gen-Z. Can someone explain me why? Don’t you have a retirement system in the US to prepare your old years?

38 comments

  1. We have social security payments, but they’re not enough to live in dignity

    You need to additionally save up money for retirement to be financially secure in your senior years. If you live your whole life paycheck-to-paycheck, you can’t do that.

  2. Social Security will only cover a portion of realistic living expenses. If you don’t own a house, have a traditional pension, and have a large amount of personal savings by retirement age it will be somewhat grim.

    Young people don’t see the wages or job security available for them to accumulate the personal wealth the way it was for their grandparents.

  3. Costs of living are so high many people are in debt. Wages haven’t kept up with the increased costs. It’s making it almost impossible for some to save money for retirement.

  4. Well, the boomers aren’t going to raise the taxes for it or cut benefits, so it’s going to be gone in a few decades. That’s the crux of it.

  5. Because they aren’t able to save enough money, or save money at all. Wages have not kept up with inflation and cost of living for quite some time, and the last 2 years especially exacerbated this issue.

  7. This isn’t just an American issue, it happens over your side of the Atlantic too. The British state pension is pretty poor (and I imagine other countries are similar), the days of good pensions from employers are essentially gone. Couple that with an increasing number of people who will never get on the property ladder meaning they’ll be renting for life (with rent getting ever more expensive and social/council housing dying off). Not to mention the pension age getting higher and higher; people may be living longer but that doesn’t necessariliy mean they’re fit and healthy for much longer.

  8. Inflation and cost of living has gone up significantly while salaries and wages have not gone up the same way, so a lot more people, especially young Americans, are living paycheck to paycheck. They can’t save up for retirement because the money that would be put towards retirement is being spent to pay the bills instead.

  9. Social Security, the “retirement fund” we all pay into over the course of our lives, is frequently the target of fiscal conservatism and is projected to ‘run dry’ in 2037. At that point dividends from it will be even more insufficient to live comfortably on than they already are.

    The amount of money a person needs to save over the course of their working life in order to retire comfortably goes up every year as inflation and cost of living increases against stagnant wages. We do have Medicare for the elderly and retirees, but it’s also the target of fiscally conservative measures and we have the shoulder the costs of our healthcare up until we qualify for it. That’s a substantial cost for a lot of us to factor into preparing for our retirement. I’m sure you’ve heard that plenty of Americans go bankrupt for unexpected medical emergencies—you can be a hard worker, a penny pincher your whole life, and one bad illness or serious car accident can derail everything.

    In short, homeownership and dignified retirement—two pillars of the “American Dream”—become more and more expensive to achieve every year, all while most of us don’t see comparable increases in wages. Throw in the constant, gradual degradation of what few social safety net programs we DO have, and that’s why it’s a grim prospect for our generations.

  10. There’s a, IMO purposefully driven, attitude that absolutely everything is terrible and that the guarantees given to the previous generations aren’t going to be around for us to benefit from. This fear is being harnessed since, as any tyrant and my brother who used to chase me down in Mario Bros on the Wii can tell you, fear is a great motivator. They don’t think they’ll be able to retire because they believe that earthing we have now will be torn down by then. There really aren’t any people seriously considering taking down Social Security, plenty who want it reformed though.

  11. Because people have no idea what’s coming.

    We’re going to see more exponential leaps in technological progress in the next 20-30 years than in all of human history. People don’t understand how much our lives will begin to change once we reach singularity between 2040 – 2050. When we reach a point where it becomes possible to reverse aging and immortality becomes attainable. And when AI surpasses us in terms of intelligence, who knows how they will remake human society. The world of the future is just impossible to predict with rapid advancements in technology

  12. Lack of savings, inadequate old age pensions (government), lack of private pensions altogether, etc.

  13. Mainly because things like the cost of housing and living in general are far higher compared to ~30 years ago, so it’s harder to save for retirement. Not to mention SS will probably have to cut payments within the next few decades.

  14. Our “retirement system” will not be able to cover much beyond the basic living expenses and may not even cover that.

    People rely on their savings and investments to get through retirement. Many millennials and Zoomers feel they simply won’t be able to do that. I can sympathize. I’m 27 years old, work 2 jobs and live within my means, I doubt I’ll ever be able to retire.

  15. It’s very easy at this age to say “never” when you really mean “a long time”. I’ll never pay off my mortgage, I’ll never pay off student debt, etc. because when you’re 24, 10-40 years of steady progress seems like an unrealistic eternity.

  18. Our social security system is fucked. They’ve already said that the majority of us that pay into the system (which isn’t optional) won’t ever be able to collect because of the way it’s become the government’s piggy bank and because of major population differences thru the decades.

  19. I’m 40. I bought my first home at 24 in 2008 after the bubble burst. I now have a much Karger paid off home. If I was trying to buy the house I own now, I couldn’t afford it. Property prices have gone crazy. Kids in their 20’s now have no chance of qualifying for a mortgage, even with good jobs. And it isn’t their fault. How are they supposed to build wealth when they’re spending 50% of their income on rent?

  20. Wages are down relative to cost of living, people can’t save and invest like they feel they should especially young when it does the most good. Social Security is nominally a public pension ish system but doesn’t pay enough to live decently off of. Private pensions from employers are mostly gone, replaced by matching contributions for tax-advantaged retirement accounts but if you’re having trouble getting by it can feel difficult to put in much of anything for them to match.

  21. There’s a few reasons.

    1. The retirement theory was built on a house of cards from the beginning. It’s only been a concept since about the mid 1900s, never throughout history would society allow majority of their aging population to retire and not work. People just worked until they died or were no longer capable.

    2. The pension plans that companies offered did not account for people living 30+ years after they retired. Most companies don’t offer them anymore because of this and we’ve switched to a 401k model that makes people responsible for saving for their retirement.

    3. Wages have not kept up with the cost of living, leaving most of the younger generations unable to adequately save for retirement. It’s advised you need to save around 12% of your annual salary for 35 years to retire comfortably. By the time you hit your late 30s if you don’t have 3x your annual salary in retirement it’s already too late, and the door is unfortunately closing for many.

    The WW2 generation had pension plans, and the boomers had no problem putting 12% annually into a 401k. Millennials and Gen z are being completely screwed and the covid stimulus has made it worse. The concept of retirement is beginning to show cracks as it eventually would.

  22. Im from Germany and I feel the exakt same thing.
    My lifestyle may very well kill me before seventy, the Job i work currently only has project to project contracts with very little pay and I feel like I’d rather have fun now than when I cannot walk anymore, I am yet to be convinced that our retirement System will survive another 2 generations.

    What I am saying is, to those who are struggling, this isnt merely a US question, it is indeed a class question.

    Personally, I am lucky enough that my family will kind of take care of that for me, but anyone in my situation that had less luck spawning will be fucked.

  23. While the social security system is having a rough time, it is inaccurate to say that it will go away completely. The 2035-2037 year that is thrown around is when the trust will dry up, resulting in not being to pay 100% of scheduled benefits. As long as there are still people working and paying social security tax, there will be income into the social security account, meaning there will be social security payments going out. The projection is that, without some reform, benefits will be about 80% of what they should be when the trust runs out in 2035-2037.

    I don’t see why we can’t just increase the tax by 1-2%. It’s really not that much extra tax money per person while reaping huge benefits.

  25. Too many people too proud to work a trade or get an appropriate education for a professional career. Unwillingness to put in the hard work needed to purchase and maintain a home. Basic poor economic decisions.

    If you work hard, learn a trade or profession and don’t waste your money and other resources on wants instead of needs, you’ll live a good life (if not the luxurious world traveling life you wanted) and retire with solid income from your own IRA/whatever supplemented by social security.

    If you’re mentally or physically disabled, there are disability and assistance programs available to help you live a decent life.

  26. It started out as a commentary on Boomers gobbling up Social Security funds, but nowadays it’s also inflation and the shrinking of the middle class. My company also phased out its pension plan in 2004, three years before I started there. I often trot out that last point whenever someone remarks that millennials and Gen Z don’t have company loyalty.

  27. Yes, we have a government retirement system that covers almost everyone.

    The average Social Security benefit is $19,884 and the maximum is $50,328 for the year 2022. The amount depends on the number of years worked, age at starting benefits, and amount of wages earned. The government also provides health insurance for those age 65 and up even though most of us don’t get government health insurance before then.

    Why would young people say they can’t retire? Here are some reasons:

    * Worry over Social Security benefit cuts. Broad, direct cut in benefits would be very unpopular. Cutting benefits and/or raising taxes for the highest earners only is more politically feasible. It is also possible to indirectly cut benefits by raising the retirement age, as was done in 1983 with bipartisan support.

    * Decreasing home ownership among young people. Living on Social Security benefits alone is difficult if you don’t own your home. House prices have increased dramatically, far outpacing wages in some cases. New houses built these days tend to be much larger than older houses, which partially explains the higher prices but is not good for young people looking for an affordable first house.

    * Demise of pensions. Some people complain that pensions (according to the American definition a pension specifically means a promised defined benefit amount from the employer) have mostly disappeared in the US. Note that the good old days of pensions weren’t all that good because pensions often required working at the same employer for a decade or more, tended to be offered only by large employers, and were at risk if the employer went bankrupt.

    * Lack of individual savings. Some commentators argue that people need large amounts of financial assets (sometimes a million or more) to retire comfortably, and most people don’t have that. Then again, most people didn’t have that in the past either. I think these amounts are often exaggerated, but it certainly wouldn’t hurt to have extra savings in case you want to (or are forced to) retire early, and due to the progressive Social Security benefit formula someone with a high income would need a lot of savings to replace their pre-retirement income.

    * Stock market declines. Some people specifically say they have lost their retirement after a stock market decline. Since most people have little savings total, most wouldn’t lose much, but someone with only a little could be the most worried over losing what little they have. This probably shouldn’t doom retirement since the stock market has always come back from crashes and gone even higher in the past, though there is no guarantee that will happen in the future and a later recovery won’t help people who sold all their stocks when they were down.

  28. I’m 36 years old and have worked since I was 15 and I have almost zero savings. I really don’t see any path towards a future where I can just sit there and not work for 20 or 30 years until I die.

    I have recovered from my young financial mistakes and I probably won’t be totally destitute or working fingers to the bone beyond 50 or 60 (my parents did a lot better than me and lived in a much easier financial time here so I’ll have some amount of inheritance to help out) but I don’t currently see any path towards sufficient passive income to actually ever quit making money.

    We do have a nationalized retirement/pension fund or whatever you wanna call it, we call it Social Security here. I pay into it on every paycheck as a matter of law. Tbh I don’t 100% understand the economics of it but as I understand that system has run at a deficit for ages and has been cut back several times in my life. Most people I talk to are of the opinion that it won’t even exist anymore by the time my generation is old enough to receive benefits from it and they’ve been saying that since I was a kid so it’s been pessimism from the start.

  29. I have a 401k that tanked in 2008 and is ranking now.

    I am 36 and only have a place to live because I live with roommates.

    The Republicans want to do away with Social Security and Medicare.

    May I will die before I am too old to work?

  30. Social security is bankrupt and cannot fund the ones who have paid into it and are now eligible to get that money back.

    Long gone are the days where you could work in one place for 20 years and earn a pension from your employer.

    And those who do have a pension, like my husband, it isn’t enough to live on. He still has a full time job just we can make ends meet.

  32. Most working Americans live paycheck-to-paycheck and our social security system does not pay enough to cover living costs. It doesn’t help that Republicans are also constantly trying to cut social security, medicare, and medicaid that many people rely on.

  33. Because people earn such low wages it barely covers their current expenses- let alone saving for future expenses, or for 50 years from now when they retire.

    Companies do not provide retirement programs- they are self-funded. And when you have no funds, you have no retirement programs.

    Also, the government Social Security programs we are forced to fund from our current salary, which is supposed to provide for us- will not actually provide for us. Alllll the baby boomers on retirement + govt ‘borrowing’ from the programs for decades, means there will be an imbalance of what we put in vs what we will receive at retirement.

  34. The average expected dollar value we’ll need to have saved to retire is $3 million. That’s over $100,000 a year in savings. I don’t make $1000,000 and likely never will. Most older adults I know don’t make $100,000 a year, let alone have $100,000 to put in their savings after expenses. Mix that with the fact that social security is running out and that it’s not enough to cover my cost of living as a retired adult in the first place (you need savings and a house for that, realistically, and even if I can save a fraction of that $3 mil number, my chances of buying a house are ridiculously slim – who the hell can afford that?), and my hope of ever retiring is six foot under. If I’m lucky, I’ll work ‘til I die with enough money to feed myself and pay my bills and leave my family with as little a burden to pay for my death as possible.

    And as a side note, that advice about “go be a doctor or a scientist or a lawyer and make money” is bull. I wanted to be a scientist, so I went to school for it on scholarship. The most anyone makes in my field is 60k. I’m involved in studying climate change and helping to save the planet, and the average salary is 35k a year. People in my field are always in demand but no one wants to pay us. Besides that, even the fancy lawyer and doctor salaries aren’t enough half the time, and that’s if you can even manage to do that after how expensive it is to do either of those things. Chances are, you only go on to work the high-paying jobs if you already came from a well-off family because the financial barriers to entry are so high.

  36. One thing to consider… when I was in my 20s there was no social media where I could complain or compare myself to what others were doing (even if all you see is other people’s highlight reels).

    But if you asked me about my chances of retiring when I was in my 20s I’d have painted a glum picture as well. I was working a very low paying job making about 16K per year with almost no savings.

    But as I got older, learned some skills, I was able to get a job that paid better, and I turned that job into another one that paid better.

    So the “I’ll never be able to retire” complaint *may* be legit (and almost certainly is for some young people)… but it also may be magnified because social media lets people express their frustration plus it lets people who are instigators stir up the pot a bit.

    There are young people coming to work at my company all the time who make way more than I did when I started out!

  37. u/maceman10006 above is the only one to touch upon a key demographic reason Americans say this, even if we’re not thinking about it. Our primary old-age entitlement program — Social Security (a government pension) — was created when people weren’t expected to live more than about ten years after they stopped working. It wasn’t created as a way to ensure retirement; “retirement” didn’t exist. It was created to keep people who couldn’t work from becoming indigent.

    It’s important to understand America has never had a debate about whether we should fund (through private or public pensions) twenty-year retirements. When a young person today says “I won’t be able to retire”, they’re saying “I won’t be able to spend the final 15-30 years of my life not working but also living with a minimum of comfort”. But America has never debated the question “Should all of us be able spend the final 15-30 years of our lives not working but also living with a minimum of comfort?” We just assumed the unique financial situation of the Boomer generation would be the norm.

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