College Students Need To Choose Majors Wisely To Retire By Age 65

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4664159

Abstract
College graduates are taking on exorbitant levels of debt to attend college. Their debt burden lingers on for long time periods and threatens to stunt their retirement nest-egg development. The authors compute the impact of debt on millennial nest-eggs and determine the starting salary boost needed to restore the nest-eggs for different debt levels. Additionally, individual majors are analyzed for their potential to reach an adequate retirement level of wealth as are non-college career fields.

It was reported that Millennials, as a couple, will need to have, at the very least, saved $290k by age 65 to retire comfortably. And I'm thinking that's not including interest compounded over time on those savings. Surely by the time they retire, the cost of living will be so much that $290k by todays standards will barely support them for a few years at most. I haven't taken the time to read the full article yet but thought others may find it of some interest.

 

Zoomers? What are we? Googlers?

 

Nah. TEKMAN - you'd be a Millennial I think. That's 28-43. Chart here: https://www.beresfordresearch.com/age-range-by-generation/

I think I'm a pet rock.... I look forward to being "Generation F" (fossils) soon

 

I get your joke. And according to the Pew Research report, yes. But honestly, Steve - have you ever known me to be silent?

 

Well this went off the rails quickly. For what it's worth, the paper has some interesting comparisons amongst different majors, college vs. skilled trades, et al.

So by all means click the link. Even if you're not a millennial. You might get something out of it.

And I guess I'll resume herding cats. It's much easier.

 

There's more to college than a degree and job skills (says the guy who didn't go to college to get his degree.....).

 

The $290,000 figure for everyone doesn't mean anything to me. A person needs to know at least:

(1) How much are they likely to be getting from the government in pensions etc. when they retire.
(2) How much might they be getting from other sources - work pension, investments they have etc.
(3) How much will they need, if any, on top of sources (1) and (2) per year. That amount is the shortfall.

Pessimistic approach:
They need this nest egg: The shortfall, adjusted for inflation x the number of years they expect to live after retirement. When it's gone, it's gone.

Optimistic approach:
They need a nest egg large enough to be invested to generate the shortfall, every year. When the die, they can leave that pretty large amount to family. If they can get 5% return, they need 20 times the shortfall. If 10%, they need 10 times the shortfall. Actually, they need more. Add for taxes, according to your bracket.

And remember to recalculate the shortfall a few times - to account for inflation during retirement years. It's not rocket science. A pocket calculator is sufficient. One with financial functions will speed things up - but ONLY if you've used one and are familiar.

 

I'm guessing a lot of people who calculate it all out will find themselves looking for a $500K, $600K or even a million-dollar nest-egg.
It ain't easy. Look for ways to save. But you still gotta live. Not all fun stuff costs a lot of money.

 

My 10-year-old daughter promises to take care of me when I am old. So, I don't need to save anything just invest into the kids' education, health, shelter, etc.

 

AOLer is here.

One thing that helped me along the way was membership in a professional organization, participating in events and networking, getting the latest trends and fields to expand to.
Hobbies that add meaning, and obviously family and kids, pets etc.
This is rare today, but some of my friends fresh out of school worked all their lives for the same employers. Some completed their education while working.
My good friend Larry recently retired at age 66, he still very active as he always played in orchestra in addition to working FT in high-tech industry.
Now he just mostly plays and enjjoys fly-fishing

 

I'm leery about exact numbers. I'm much more interested in answering this question: Can I (we) afford to be who I (we) want to be? For some, a million in the back won't be enough. For others, that's a ridiculous amount filled with disappointment and failure.

Envision. Then work backwards. Then work forward. Then be. (And enjoy the journey there.)

 

She's 10. What if she changes her mind? ,,,

Seriously, it's nice when your kids say that. And I'm aware that a lot of adult children do help elderly parents. Mine do - they're a great help - but thankfully, money isn't involved. I can do that part just fine, thank goodness. And TEKMAN, I'm pretty sure you'll do OK, if you have at least half the fun in your old age as I do.

And likely, you'll have a lot of that fun with your kids and grandkids - and then you can tease your daughter about what she said when she was 10.

 

Most Asian children take care of their elder parents. Since my kids are only half Asian, so I have to cross my fingers for that. Currently, I have over $1M net worth, plus social security (if it will be there), so I will be fine. Besides, Nikki Haley said she wants to raise retirement ages...I could still be working in 30 or even 40 more years. I could always use my Ph.D. and MBA to teach to make some money. My professor, Dr. Charles Baker at Southern Methodist University was teaching until he died. I might follow his footsteps.

 

Yeah, I was obviously right. You'll be OK, TEKMAN - and I don't think you'll have to work in your old age -- but certainly, do it if you really want to.

The only old-age advice I'm gonna offer: Make sure you get to do what you want.

 

What a great chart - thanks for posting that.

 

I am SO going to regret saying this, in this life if not the next...for people with the right interests and skills who are willing to work for the government, the cheapest possible J.D. might be a good deal.

 

As a retired GS-15, I'm going to second that emotion. We hired a LOT attorneys, many of whom when to night school at run-of-the-mill schools, yet were GS-14s, -15s, and members of the SES. I suspect ABA accreditation was necessary, but passing the bar--depending on what you were going to do--was not. My last supervisor was a graduate of Western State University School of law. He passed the bar, worked as an immigration attorney for awhile, but joined the government to work the other side. He did quite well for his career.