Why Retirement Is Now A Myth For Young People
Retirement is becoming a myth for young people. The good news is there are solutions and options young people can utilize to plan for their future if they are willing to be creative.
Some older people ages 65-plus are returning to work. They were forced to do so because of inflation and because 40% of retirees relied upon one income source for retirement: Social Security. There are solutions. It has become easier to create multiple passive income streams due to the Internet. You have strategies you can choose to implement if you want to be cashflow positive.
Retirement is largely becoming a myth for many young people.
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64% Of Americans Will Retire Broke
Yahoo Finance reports that 64% of Americans will retire broke. This is because 45% of people are estimated to have no money for retirement, while only 19% said they could only retire with $10,000. Another major problem is that many Americans live paycheck-to-paycheck without having even $1,000 to cover an emergency.
This is a significant problem because you must have enough money saved and invested to retire. Over half of Americans have no expectations ever to retire. This is precisely why retirement is becoming a myth if it wasn’t already an illusion for many people.
5 Problems That Have Made Americans Broke
Five critical problems have led to the crucial problem of over 60% of Americans believing they will never be able to retire.
1. Never Taught Basics Of Personal Finance
The first major problem that that most young people are never taught the basics of personal finance. They do not know about the different types of savings and investment accounts. They are not taught about investing. They are then never taught how to make money, which is required to start investing.
Most only become aware of investing through what they may receive from an employer, but their investment options are limited to what the employer chooses to put into their 401(k) or pension. That is, if their employer even has that option.
The reality is that you cannot invest in planning for retirement if your financial house is not in order or if you don’t make enough money that allows you to invest. This is why the top 10% of income earners own 89% of all U.S. stocks. They have the disposable income to invest. You want to find ways to build up your net worth so you can also invest and plan for your future.
2. Debt
The second major problem is that many Americans go into debt at a young age. Many young Americans are told they must attend college to get a good job. This lie is indoctrinated into them from a young age. They then go to college, and most will take out student loans to get a college degree. This means they have been indebted since their twenties and have a negative net worth.
Society brainwashes people to think that college is a requirement to be successful when the most successful people do things differently. The Internet provides many opportunities to learn skills, including alternatives to the higher education system. Most often, the option will cost less than attending a college course or semester. The worst thing you can do is go into debt, especially for an overpriced piece of paper.
3. Do Not Make Enough To Save For Retirement
The third problem is that many do not make enough money to save for retirement. According to First Republic, the average American makes $54,132 a year. Add to the debt problem, many Americans, after breaking down the cost of living, don’t make enough to save after expenses. Many may end up in the negatives if an emergency arises, they have healthcare, or they pay for expensive insurance plans that reduce their ability to save and invest. That does not include the current problems with inflation.
4. Rising Cost Of Living
The fourth problem is the rising cost of living. The cost of rent and housing has continued to rise in the United States, and wages have not kept up with the cost of living. These rising costs cut into the money you could use to save or invest in planning for your future.
According to Redfin, the median rent in 2022 surpassed $2,000 a month. That is the monthly rent people need to come up with to keep a roof over their heads. That does not include the other necessities that go into the cost of living; the other essentials are food and energy. Those also rose in price. The average price of food rose nearly ten percent, more for specific items, and energy increased by over five percent.
As seen in the chart below. Wages have primarily remained stagnant except for the top-income earners. The consequence was wage stagnation for the majority of income earners. At the very least, their wages did not increase enough to beat inflation year-over-year.
The cost of living has continued to rise in the United States due to the dollar's devaluation.
5. Inflation And The Devaluation of the Dollar
The final problem is rising inflation and the devaluation of the dollar. Most people talk about inflation, but the devaluation of the dollar is the flip side of inflation. As your currency loses purchasing power, you cannot buy as much with it. This is usually called inflation, but it concerns your currency.
You can think of the devaluation of your dollar like a sponge. The more it is filled with water, the less value it has, which means it has less purchasing power. This is often called inflation, but it concerns devaluing your currency.
These two forces directly make your money worth less until the dollar becomes worthless.
Why Retirement Is Now A Myth For Younger People
Retirement has become a myth for younger people. The government programs like Social Security and Medicare that many people plan to count on for their retirement will not be there. The numbers certainly do not work out for them to be economically sustainable. The Federal Reserve could print dollars to fund the programs. That would only worsen the inflation problem for Americans as it expands the money supply. It would make the money that they receive from the government worthless.
The average American does not even have $1,000 for a rainy day fund. The average salary in the United States does not pay enough to cover the rising cost of living while being able to save, let alone invest. It is not looking good for most young people who do not make enough to save or invest. That is why retirement is a myth.
The good news is that with the Internet, you could decide to do something that many people will think is crazy but could make you money. It could also help you to build toward a stable financial future. But it does require risk.
Young People Must Find Ways To Increase Their Incomes
Young people must find ways to increase their incomes. The bad news is that your employer will likely find ways to cut your 401(k), pension, or healthcare plans. The good news is that you can find ways to raise your income. Some of the options include:
You could get a second or third job.
You could get a certification your employer may require to advance in a company.
You could start a side hustle.
You could learn how to make passive income streams.
You could start an online business.
Your employer likely won’t want to give you a big raise because you could be replaced by someone willing to work for less. It is ultimately up to you to be responsible for increasing your income.
What Younger People Can Do Who Want To Retire
For any younger people who may want to “retire” or decide to find ways to work less, you could consider finding a way to move to a less expensive country. With the ability to work online and create income streams using the Internet, you can make your money go further for you while enjoying a higher standard of living compared to most Western countries, particularly the United States.
You could then have the option to do the things that most people wait until retirement to do: focus on hobbies and retire. If you have something going online, you can still have income coming in so that you are not relying solely on your savings, Social Security check, and any investments you may have. You will be more financially diversified than most people, giving you more options.
You could also retire early but still work if you wanted to by living in a less expensive country. If you could cut your cost of living by a quarter, maybe even half, why wouldn’t you if you can?
For more entrepreneurial people, you can take advantage of the many ways to make money online. That will require you to learn about how to make products to sell to your customers and other skills. You can figure out how to sell anything from e-books to digital courses, along with finding affiliate programs that fit the needs of your audience.
Benefits Of Moving To A Less Expensive Country
It will require some work, but your money will go further. You can live better than in the United States and Western countries. Doing your work online or owning an online business will make funding the move more accessible because you won’t have to find a job overseas.
Another benefit is that you could avoid the rising inflation that many Americans would experience as the trillions of dollars and treasuries circulating in other countries’ economies return to the United States. When they return to the United States, inflation will worsen due to an increase in the money supply, which creates inflation. The world is slowly moving away from a unipolar world which means you may be able to eventually pay for a product or service, depending on your location, with another currency. The BRICS and the Yuan are currently the two challenging the dollar. The dollar could eventually become one of the multiple currencies that the world trades in rather than the world reserve currency.
The best strategy to do this is to make money online. It does take some time to figure out. But there are multiple ways that you can find ways to make money online if you are creative. Once you can make enough money to cover your cost of living in a less expensive country where you can enjoy a higher standard of living for less, you can move there. You could even get a second passport by getting a residency or becoming a citizen of that country. This is also a form of political and economic diversification.
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Summary
Retirement is not looking good for Baby Boomers (about 40% who solely rely on Social Security). This should be a wake-up call for young people that the system is not designed for their benefit or best interests. You must figure out the things that you can control. You must discover your strengths to know your skills, then find ways to increase your income by mastering your skills. If you can work entirely online and have consistent income flowing in, you could move to a less expensive country.
Retirement may be a myth for many young people, but you still have options. You must be creative and think for yourself to thrive today. You must adapt to the world of the 21st Century.
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Hours of time, effort, and research went into making this 10-minute read. If you found the article helpful, please help me by clicking the heart button and sharing this article.
Views expressed in this article are the author's opinions and do not necessarily reflect the views of Secure Single. It is intended for informational and educational purposes only. It is not investment, financial, or legal advice. Consult with a financial or legal professional before making investment or legal decisions. James Bollen is the author of Thriving Solo: How to Flourish and Live Your Perfect Life (Without A Soulmate). It is now available in paperback and for the Kindle on Amazon.
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