06/22/2018
The "statistic" floating around about needing to have twice your annual salary saved by age 35 is incredibly false, and completely disregards hurdles that Millennials have to overcome just to begin saving in the first place.
We have to go to school for several more years than our parents did just to be afforded the same job opportunities. Many of us had to get a master's degree just to be in the same starting position as our parents; many of whom could begin stellar careers with no more than an associate's degree. This leads people to enter the workforce between two and four years later than previous generations. It also tends to come with crippling student loan debt, which, in turn, causes serious cash flow compression that was never commonplace before the last decade.
Job opportunities were also scarce for many of us, as the Great Recession took a toll on the job market for several years, which left many of us unemployed, or forced to accept jobs that paid little by comparison.
An intelligent 35-year-old in today's working landscape should not fear benchmarks made by people without knowledge of their personal financial situation.
After all, even a 35-year-old (or household) making the average annual household income in the U.S. ($59,039), with no savings, who begins to defer just 10% of their salary into their 401(K) with the standard 3% match could have an inflation-adjusted savings in the neighborhood of over $900,000. When combined with Social Security, that total equates to a higher standard of living in retirement than when they were actually working. Granted, that's using historical averages, which are not necessarily indicative of future returns.
TL;DR Anyone setting ludicrous savings targets based on age is ignorant of the economic landscape, personal financial situations, and basic math; particularly regarding compound interest.
