Thrivent, a financial services organization headquartered in Minneapolis, Minnesota, on April 5, 2022 published an article titled “Financial planning for millennials: How to set financial goals.” Millennials, a group variously described as from their mid-20’s to early 40’s seem rarely to be the subject of financial planning but, considering the fact they have the opportunity to start now and years to make mid-course corrections, they seem to be a natural subject.
One of the biggest issues and one of the biggest inhibitors has been student debt. Others include having lived through the Great Recession of 2008 and the “gig economy” where short term and free lance jobs can affect earning capacity. While it is true that some millennials have moved into high paying tech and similar positions their parents could only have dreamed about, others are still struggling with debt while spending more for today recognizing an uncertain future.
The Thrivent article has some interesting observations. It notes that “Compared to their parents or grandparents, millennials… have unique financial habits, goals and hurdles. Many have faced obstacles to balancing their long-term financial responsibilities and needs. Consider student loans: millennial borrowers carry an unprecedented amount of student loan debt—an average of $38,877 in 2020, according to Experian. Those who are having issues with Student Loans Settlement may consult a student loan lawyer for more info. Studies have also shown that those in this generation are less likely to purchase cars or own homes than previous generations…” I would add that Uber, Lyft and luxury apartment rentals seem to fill this space.
According to the article, millennials spent 64% more on vacations than the general population and a slightly higher percentage of their food budget on dining out. (It is unknown whether this figure was developed before or after the recent COVID pandemic.)
On the other side of the equation, the article notes “people in this age group are …more willing to improve their credit scores, invest, and say they’re working on money management goals…”
Taking all of this into consideration and incorporating the Thrivent observations and some of my own, here are some ideas that apply not only to millennials but others as well.
Here are ideas that are my own as well.
Find work that begins to build a record in the Social Security system. Social Security has often been discounted as a future source of income using the explanation that it is unlikely to be carried forward into the future. Social Security has actually outlasted many, if not most pension plans offered by private employers and is the primary source of regular monthly income for many seniors. Pensions generally are left with the public sector. There are two excellent reasons to closely consider what payments you are making into the Social Security system. First, for retirement. Social Security considers your best 35 years in the system. If you are not 35 years in the system Social Security enters any years less than this at 0. Once qualified for retirement benefits, it lasts for the rest of your life. Second, for disability. If you become totally disabled before your full retirement age and have worked and contributed into Social Security with the right number of quarters (dependent on age), Social Security can help both you and, in some cases your family to provide desperately needed income.
Esquire, Colliton Law Associates, P.C. Janet Colliton has practiced law for over 38 years, 37 of them in Chester County, Pennsylvania, a suburb of Philadelphia. Her practice, Colliton Law Associates, PC, is limited to elder law, Medicaid, including advice, applications and appeals, and other benefits planning including Veterans benefits, life care and special needs planning, guardianships, retirement, and estate planning and administration.