Why 30-year olds are screwed?
In his recent newsletter, financial planner Kurt Rosentreter explains why 30-year old Canadians are, financially speaking, screwed. One reason for the dismal outlook is simply the way things are today what with traditional pensions disappearing and home prices as high as they are. But the main reason, according to Mr. Rosentreter, is the way today’s 30-year olds are playing the hand they are dealt: being totally clueless when it comes to spending, taking on monster debt loads at today’s low, low interest rates and saving little or nothing despite not having a pension.
Today’s 50 year old will make it – they are the last generation to get in before the big mortgages hit and they may still get inheritances from their financially responsible, recession era parents who will die in the next 20 years, providing money for their retirement thankfully. It’s today’s 30 year olds who will be 50 in twenty years that are screwed. With little hope of being debt free in 20 years, with a bad attitude towards savings and debt elimination, with rising costs of children’s education, no pensions coming, frequent career change, wild stock markets, record low interest rates and longer and longer life with rising health care costs, today’s 30 year olds need to win the lotto to have a hope of achieving their financial retirement as culturally expected in Canada. Working to age 70, albeit part time, may become the norm for many in the next twenty years.
I would add one more point to Mr. Rosentreter’s list on why 30-year olds are screwed. The effect of retiring Baby Boomers on public finances is going to be akin to a swarm of locusts moving through a field of crops. Today’s retirees can count on receiving benefits from Old Age Security and Canada Pension Plan. 30-year olds have no such assurance and may find that they are left to fend for themselves.