The Class of 2025

Each generation experiences life through the prism of its own experiences—creating a unique frame of reference that can itself be a language barrier in communication. 

Indeed, I have for years enjoyed checking out what was once called the Beloit College Mindset List (a couple of years back rebranded as the Marist Mindset List). The focus of the list (and it dated back to 1998) was to provide some perspective on the shifting generational perspectives—the mindset, if you will—of individuals just entering college (it was, after all, launched to help college faculty be aware of dated references). 

Sadly, this year’s list isn’t quite as much “fun” as previous lists have been (at least not to this Boomer). I’ll concede that much of the fun is the “can you believe it?” aspect to some of these lists—like those who have never actually seen a floppy disk (which, ironically, lives on in that “save” icon in Microsoft applications), who have perhaps always wondered what “cc” actually stands for in their email, because they have never actually had to deal with a “carbon copy,” for whom a rotary dial phone, the need to manually change channels on a TV (and that between only a handful of options)—and most notably of late, weren’t alive on 9/11. 

On the other hand, many, perhaps most, of those in today’s workplace, have never lived in a world without the World Wide Web or email, much less wireless access to the Internet. For them, these ubiquitous tools are no more a novelty than flipping on a light switch was for their elders.

That said, this new college class—the Class of 2025—will come to the issue of retirement (or should we say “financial freedom”) planning with perspectives of “normal” things that, for some of us, are still relative new innovations. 

Just think, for the Class of 2025 (once they graduate):

• There have always been 401(k)s.
• There has always been a Roth option available to them, whether 401(k), 403(b) or IRA.
• There have always been plenty of free online calculators that allow them to figure out how much they need to save for a financially secure retirement/financial freedom (though they may not be any more inclined to do so than their parents).
• They’ve probably always had that savings account rebalanced on a regular basis by experts—since they’ve always had access to target-date funds, managed accounts or a similar vehicle that automatically allocates (and, more significantly, reallocates) their retirement investments.
• They’ve always been able to view and transfer their balances online and on a daily basis (and so, of course, they mostly won’t).
• 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.)

And then, there are the things they’ve (likely) never had to deal with—things like:

• They’ve (likely) never had to sign up for their 401(k) plan (since, particularly among larger employers, their 401(k) automatically enrolls new hires).
• They may never have to make an investment choice in their 401(k) plan. (Their 401(k) has long had a QDIA default option to go with that auto-enroll feature.)
• Many have never had to wait to be eligible to start saving in their 401(k). (Their parents typically had to wait a full year to be eligible.)

But perhaps 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.