Publisher's Perspective

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Several years back a federal manager described to me how several of his young subordinates were complaining about their salaries. Their not so subtle message was that without a raise they would be forced to move on.

Not wanting to lose them, he promised them that he would figure out a way to give them a raise, even if it involved bending a few of the government’s not so flexible rules regarding salaries. But only if they promised to invest half of it in the TSP.


Both sides came through and as he told the story it was clear how happy he was about it.

That incident shows the kind of understanding about retirement that those within sight of it have—or should have—and the way they can use that understanding—or should use it—to help those for whom it is beyond the horizon. That applies not just in the work setting but also in your family.

Retirement prospects for younger workers—Millennials and late Gen Xers—are shaping up to be very different than those for older workers—early Gen Xers, Baby Boomers and those few of the Greatest Generation still in the workforce. Part of the reason is the well-established decline in defined benefit retirement programs just about everywhere but in government, and their replacement—if at all—with defined contribution programs that shift the responsibility from the employer to the employee.

Also at work, though, are differences in life experiences. The younger cadre is more likely to delay major life decisions to older ages, with an impact on their future finances. Here’s how a recent report from the Brookings Institution put it:

“Young adults currently have the lowest homeownership rate of any similarly aged generation since at least 1989. The average age of first marriage has increased from age 21 for women (24 for men) in 1975 to age 27 (29) in 2016. The age at which parents have their first child has increased over time as well, from 22 in 1975 to 26 in 2014.”

Another sign is that the “share of Millennials living with their parents is higher than the share of similarly aged people in prior generations. Among 25-34 year olds, 16 percent lived with their parents in 2016, compared to 11 percent in 1990 and 10 percent in 2000.”

“These trends, in turn, may delay the onset of retirement saving if people feel the need to “get settled” by purchasing a house and raising children before beginning to think about saving for retirement,” it said.


The impact is so significant, it added, that the term “emerging adulthood” has been coined to describe a stage of life between childhood and adulthood. Another term is “adulting.”

Before you begin a thought with “When I was that age . . .” remember that one main reason for those lifestyle trends is the high burden of student loan debt that generation is carrying. And they are less likely to spend their entire careers in the type of job that comes with benefits such as an employer-sponsored retirement program of any type, or health insurance with an employer contribution.

Does this sound like your “emerging adult” son or daughter today, or what one who is not yet that age will face? Do you see it in the younger people in your workplace? What does it mean to you?

For your own family members, note that they might seek more financial help, and for longer, from you than you received from your own parents. How you handle that is up to you. But remember, any money that you do provide will have to come from somewhere. As you get closer to retirement, the distinction between retirement money and other money breaks down and it essentially all becomes retirement money. You may have to continue working longer than you had planned to make up the difference.

If you’re just not going to be in a financial position to help, or you’re not inclined to, you can at least help them understand the importance of saving for retirement, even—especially—at their young age. That should include a reminder that on the far end of their careers, longer life expectancies mean that they may have to finance their retirement for more years.

The same goes for the young people in your workplace. You might not be able to swing a raise for them, but you can at least convey that message. After all, it’s the adult thing to do.