How the Class of 2020’s Retirement Plans Will Be Different
Each year the good folks at Beloit College produce a “Mindset List” providing a look at the cultural touchstones that shape the lives of students about to enter college. So, in what ways will their retirement plans differ from those of their parents?
In the most recent list (they’ve been doing it since 1998), the Beloit Mindset List notes that for the class of 2020:
- There has always been a digital swap meet called eBay.
- They never heard Harry Caray try to sing during the seventh inning at Wrigley Field.
- Vladimir Putin has always been calling the shots at the Kremlin.
- Elian Gonzalez, who would like to visit the U.S. again someday, has always been back in Cuba.
- The Ali/Frazier boxing match for their generation was between the daughters of Muhammad and Joe.
- NFL coaches have always had the opportunity to throw a red flag and question the ref.
- Snowboarding has always been an Olympic sport.
- John Elway and Wayne Gretzky have always been retired.
So, what about their retirement plans? Well, for the Class of 2020:
- There have always been 401(k)s.
- They’ve always had a Roth option available to them (401(k) or IRA).
- They’ve always worried that Social Security wouldn’t be available to pay benefits (in that, they’re much like their parents at their age).
- They’ve always had a call center to reach out to with questions about their retirement plan.
- They’ve never had to wait to be eligible to start saving in their 401(k) (their parents generally had to wait a year).
- They’ve never had to sign up for their 401(k) plan (their 401(k) automatically enrolls new hires).
- They’ve never had to make an investment choice in their 401(k) plan (their 401(k) has long had a QDIA default option).
- They’ve always had fee information available to them on their 401(k) statement (it remains to be seen if they’ll understand it any better than their parents).
- They’ve always known what their 401(k) balance would equal in monthly installment payments.
- They’ve always had an advisor available to answer their questions.
Most importantly, they’ll have the advantage of time, a full career to save and build, to save at higher rates, and to invest more efficiently and effectively.