The world of work and retirement is changing at a rapid rate. Current retirees usually had the experience of starting a job just out of university or after completing a trade, and staying there for the best part of 40 years. There may have been one move between employers, but anything more than that was considered dangerous and avoided at all costs. This is not so with the current millennial generation. Millennials, also known as Generation Y are born in or post the 80’s. The latter millennials have never know a world without technology.
The average millennial has an insatiable zest for life and stays put for no longer than 4 to 5 years in a job before moving on. Travel and life experience are far higher on the priority list than prudentially saving for retirement. The world is their oyster, work and travel opportunities abound. Social media has truly made the global village a place that can be enjoyed.
In addition to these temptations, there are other dynamics at play. Parents of these millennials are living longer, far longer than anticipated. This has the double whammy effect in that inheritances to millennials are delayed or often never happen, with the more common occurrence that Mom and Dad end up living in the cottage built for them at the bottom of the millennial’s property.
Finally, millennials must live in the reality that most of them, with the aid of medical science, will live to triple digits. This may sound like a blessing, but it comes at a cost! Funding this extended life span cannot happen within the traditional work career of about 40 years.
The million dollar question then is, what should millennials do? Some hope to win the lottery, others live in a state of denial pretending it will eventually all work out, and very few have a financial plan and strategy for their lives.
Here are a few pointers that millennials can take and consider:
- This is a new world of work that you are experiencing. Retirement plans and strategies that served your parents well, will in all probability not work for you. Get used to it and adapt.
- Have a plan and strategy that suits you, your circumstances and your lifestyle.
- Ensure that you are investing and saving in the most efficient and effective structures and plans. But most of all ensure that you are saving and putting away some of your income.
- Make sure you speak to a professional who is not only interested in selling you a policy and making money out of you, but has your best interests at heart. The financial planning professional should advise you on a plan that is flexible and meets your needs, not his!
- Review your plan, strategy and investment portfolio on a regular basis. Don’t just leave it there and hope for the best.
- Don’t make winning the lottery your only game. The overall odds of winning the jackpot prize in the South African PowerBall lottery competition are a staggering 1 in 24 million. This is not something you should be banking on.
- Have a balanced financial life. You are in all probability going to live a long life, so make sure that you enjoy all of it and lead a healthy financial balanced life.
Millennials may never be able to retire in the fashion that their parents did, but maybe they don’t want to? Spending a retirement of 40 plus years caring for the garden or playing golf, may not be every millennial’s 1st choice. Times, they are changing and whether we like it or not, all generations, and not only millennial’s had better get used to it. Contact Tony should you wish to consult with him about a financial plan and strategy that is best suited to you.