(Image courtesy of The Wall Street Journal)

Millennial Mayhem


Barry Armstrong

Founder and President, Armstrong Advisory Group


The American dream describes the idea that every American has an opportunity to become prosperous and successful because of their own hard work.  The idea and its associated outcomes are certainly not impossible to attain today.  However, the barriers to success have never been higher for our children and grandchildren.  Members of the millennial generation frequently receive disparaging descriptions, but the problems they face are deeper and more long-lasting than their short-term inability to cook or turn off the game console.


Lower Incomes and Higher Debt


One of the most serious problems faced by millennials also confronts members of every other generation: thanks to the Great Recession and a slow economic recovery, incomes remain stagnant.  According to a report from Business Insider, the median income for a millennial in Massachusetts is just $25,0001.  Of course, this statistic will vary depending on one’s level of education and area of expertise, but it is representative of the dire economic situation faced by New England’s millennial generation.  To make matters worse, members of the class of 2016 who financed their education became some of the most indebted graduates ever: each student graduated with an average of $37,193 in student loan obligations2.  Stagnant wages and extremely high debt loads is not a recipe for economic success.


Projected Insolvency of Entitlement Programs


The growing insolvency of our nation’s entitlement programs is also certain to have an outsized economic impact on millennials.  However, this problem is likely to hurt older generations of Americans too, including some baby boomers.  According to the most recent projections, the Medicare trust fund is going to reach the point of insolvency by 20283.  The Social Security trust fund may not survive much longer: by 2034, the program will only be able to pay 79% of the benefits promised to retirees4.  The Congressional Budget Office has published even less optimistic projections: insolvency issues may plague the Social Security trust fund within the next 10 years4.  While many members of previous generations may feel these effects, it should not come as a surprise if all millennials experience a time in which Medicare and Social Security are shells of their former selves.


Reduced Avenues to Retirement


Recent studies show that the number of Fortune 500 companies that offer pension plans has declined by a whopping 86%5.  This departure from traditional retirement plans and the fast-growing popularity of investment vehicles such as 401(k) plans requires millennials to begin saving for their own retirement as soon as they begin working.  According to USA Today, older millennials born at the dawn of the Reagan era will have to save upwards of $1.8 million in order to maintain their standard of living in retirement6.  Younger millennials born during the Clinton years will be required to save as much as $2.5 million in order to ever fully retire6.  At the end of their careers, millennials will not be able to count on the same level of retirement assistance afforded to members of previous generations.  Instead, the accumulation of approximately $2 million by the time they retire is their exclusive responsibility.




Thankfully, the news is not entirely awful.  As parents, we naturally worry about the financial wellbeing of our children and grandchildren.  However, there are steps we can take to ensure that millennials remain in pole position as they seek to turn their American dream into a reality.  First, we can encourage them to establish a budget while they are still young.  Good financial habits developed at a young age will make a positive difference in the long run.  Second, we ought to instruct them to avoid the excessive use of credit cards.  It is critical for millennials to live below their means.  Finally, we should teach our children to begin saving as soon as possible, even if it is a small weekly amount to start.  Success and prosperity may be more difficult to attain these days, but sound financial stewardship is the best way to make up for lost ground.


Barry Armstrong has over 30 years of experience in the financial industry.  He founded the Armstrong Advisory Group in 2004 and has been sharing his financial knowledge with New Englanders on a daily basis during his Boston-based radio broadcast for nearly 20 years.  Learn more about Barry and the Armstrong Advisory Group at www.armstrongadvisory.com.  Securities offered through Securities America, Inc.  Member FINRA/SIPC and Advisory Services offered through Securities America Advisors.  Barry Armstrong, Representative.  Representatives of Securities America do not offer tax advice.  Always seek the assistance of a tax professional familiar with the laws in your state.  Armstrong Advisory Group and Securities America are unaffiliated.  February 2017



1 http://www.businessinsider.com/millennial-median-wage-map-2015-12

2 http://www.cbsnews.com/news/congrats-class-of-2016-youre-the-most-indebted-yet/

3 https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/ReportsTrustFunds/Downloads/TR2016.pdf

4 http://money.cnn.com/2015/10/28/news/economy/social-security-chris-christie/

5 http://money.usnews.com/money/personal-finance/mutual-funds/articles/2015/07/20/pensions-are-taking-the-long-lonely-road-to-retirement

6 http://www.usatoday.com/story/money/columnist/powell/2016/03/29/millennials-new-retirement-number-18-million-more/81329246/