Most Millennials Will Never Be Financially Secure

As a member of the Millennial Generation (those born between 1980 and 1995), I know how fortunate I am to be gainfully employed. Graduating in 2009, I secured a fellowship and living stipend that launched me into Washington DC’s young professional scene. As a 25 year old, I have the opportunity to make responsible financial decisions, but the reality is that current employment does not address the long-term projected budget deficits. While I do not currently have undergraduate debt, I will when it comes to graduate school. That debt will increase if I buy a house and the budget constraints will get worse when I eventually have children. Who knows what college will cost when they’re ready to leave the nest and then how much I will amass in savings by the time I’m ready to retire? These questions belong to millions of young people who face a similar trajectory and will inherit the outcomes of whatever decisions policy-makers make today.

There are daunting statistics to back up what some might call anecdotal angst. Today, at over $1 trillion, student loans now comprise the largest debt in America, surpassing credit card debt; average debt for recent graduates is over $20,000. A college graduate is projected to earn at least half a million more than that of a high school graduate, but there are numerous variables that influence that general statistic. Unfortunately, student loan debt is rising, and so are the default rates, which create negative ripple effects for graduates as young adults. I respect that some believe debt is a good thing and that young people should pay for their own education. But, I also believe that innovation, entrepreneurship, and health flourish when debt does not handcuff people at a young age, dictating their decisions and priorities both personally and professionally.

The average starting salary for a college graduate is $42,000 a year, again with variations depending on sector and specialty. I make around this amount after a few years in the workforce, and my savings aren’t extensive. With student loan debt, there would be very little left to set aside for anything in my future. The market’s return on savings as investments is disgracefully low and so the question literally becomes: where do you get the most return on investment for your proverbial few bucks? In the next decade, I will most likely enter a new chapter, hopefully one with a home and a family. I want to be self-sufficient, successful, and have a house in a safe area where I can raise a family, but I don’t quite see the math adding up. At this point in my life, given professional uncertainties and the prospect of returning to school, the financial commitment of an expensive property is not an appealing prospect. On a practical level, how am I going to come up with the funds for a security deposit? I have not entirely discounted buying a home, but the knowledge that it might be a good investment has not convinced me.

Finally, I contend with my hope of retiring in dignity. There are various resources on the Internet that help you calculate what you will need to save for retirement and at 25, my inputs will change quite a bit in the next five years or so. Financial estimates recommend building a nest egg of just under $1 million to live on after retirement; a daunting figure to comprehend. To use a common reference, there are three legs of the retirement funding stool: Social Security, pensions, and savings. Contrary to some media propaganda, I know Social Security will exist in some form when I reach retirement age, by 2037 it is still expected to pay out over 75% of expected benefits with potential reforms ensuring an even more robust program in the years to come. My organization matches up to 5% of my salary after the first year of employment; I plan to max out my contribution. Not all jobs have this option. Pensions are quickly dwindling and suddenly savings are a crucial component of that three-legged stool. A key personal goal is to put money in an IRA each year and hope the markets continue to go upwards over time so the investment pays off because ultimately, our economy is still based on speculation. I still can’t imagine saving that much money.

I am not a proponent of big or small government, I want public policies that enable me to work towards my goals, or at the very least don’t stand in my way. My message to Republicans boils down to this: as someone who is interested in results and concerned with my future budget deficit, I’m not taken in by the endless political pandering to your fringe base. I look at President Obama’s record and budget priorities and I believe that my attempts to build a more stable life are more likely to be supported through public policy if he wins a second term. We need a responsible approach to the deficit that acknowledges a need to balance spending and cuts. My message to young people is that although President Obama cannot dictate the outcome for every legislative fight, four years is not long enough to judge the true impact of many of his first term policies. Change does not happen overnight and certainly not in three years. The following are legislative accomplishments that we too often underestimate or overlook: Lilly Ledbetter Fair Pay Act, the Student Aid and Fiscal Responsibility Act, Hire Act, Affordable Quality Health Care and the American Recovery and Reinvestment Act. My message for President Obama comes in the form of a question: beginning November 7, 2012, what’s next?