When the hashtag #MillennialRetirementPlans went viral a couple months ago, the visions were predictably dystopian from a generation that has faced serious financial headwinds: retiring to a van down by the river, sleeping in your mom’s hospital room closet, and working until you drop dead in a meeting that could have been an email.
It’s true that millennials, the generation born between approximately 1981 and 1996, have had it rougher than their most recent predecessors. Student loan debt and stagnating wages have caused young people to delay milestones like marriage and homeownership. The average 401(k) balance for millennials is a paltry $29,400, according to Fidelity. That probably won't grow into enough to sustain them for the long haul, even if the stock market goes gangbusters for another 10 years straight (and no one is predicting that).
But are things really going to be that bad in 50 years, when the 20-and-30 somethings retire? Doesn’t all the gloom and doom reflect a projection of the status quo? In reality, the future will look different. We can’t imagine exactly how — after all, who in 1969 envisioned the Internet and how it would give birth to instant knowledge, global connectedness, and...social media stars?
There will be new methods for earning money, new places to live, and new ways to be old in the world. And there will be challenges too, like the ever-accelerating climate crisis. While the details remain murky, we asked leaders across various industries to take out their crystal balls and make some predictions. Interviews have been lightly edited for clarity and space.
Here’s how they envision the future of retirement:
Everybody Will Know Their Genetic Makeup
Dr. Toren Finkel, director of the Aging Institute of UPMC Senior Services and the University of Pittsburgh
I think in the future everybody will know their genetic makeup. The cost for that is coming down. The first DNA sequence of a human being cost several billion dollars, and now it's probably about $1,000 for a person. Right now, that information is just there to either comfort or scare people, but once you have the ability to intervene and do something about it, I think it will become much more reasonable to have that information.
If you look at the genetic signature of people who live extremely long lives, what is different about them than the rest of us? In general, I think those people don't have a single gene that makes them live longer. They lack lots of the negative genes that make you get heart disease early or Alzheimer's disease early. So a long, healthy life may not be because you have a superhuman gene, but because you've just won the lottery for not getting anything bad, basically.
I think it's very likely with gene editing techniques that we'll be able to intervene on the genetic predisposition of people, so that if you're at high risk for certain things like Alzheimer's and cardiovascular disease, we'll be able to probably modify the DNA of those individuals to reduce people's risk for those conditions. So you can go in there and correct these, sort of reverting them back to the better type of gene and taking away that risk for the disease, making more people win the lottery genetically.
Every 50 years, you'd expect another 15 years of lifespan if we continue past progress. We're at about 78 years old now and I would think another 50 years years would put us at 90-plus. It's exciting times. I just hope I'm around in 50 years to see if I'm right or not.
Smarter Algorithms Will Plan For You
Jerry Patterson, senior vice president, retirement and income solutions, Principal Financial
Unless something radically changes, the retirement journey from a financial standpoint is going to be less linear. So as a result of that, you’re going to have more jobs and more money in more places, which makes it really hard to bring it all together and have a plan that takes into consideration everything you have. Imagine if everything you owned, every insurance product, every savings product, were in one place where you could plan using common data: it would probably make your planning more precise.
Think about total transparency, everything you’re doing in one place, and now think about big data making a lot of that just happen automatically, and then planning algorithms based on science and data that’s almost unimaginable in today’s moment.
Retirement is all about predicting your future financial needs. So if tools can pull from way more data, way more history, and apply algorithms that get smarter through artificial intelligence on your situation, and couple that with a health care roadmap that science gives you, the amount of precision around what you need and want, it has to go up by a factor of 100-fold.
Imagine something as simple as, when should I buy life insurance and when should I get rid of my life insurance policy? Today, the only thing we know is, if you wait too long and something happens, it gets really expensive. But what if you know from your genetic profile? There’s all sorts of interesting ethics issues and privacy issues that are going to come out of this.
Retirement Will Be a Luxury
Julien and Kiersten Saunders, co-creators of the "rich & REGULAR" blog
Right now, we’re experiencing this phenomenon of always being on, and a lot of this is just mobile technology. We see that continuing. As technology starts to get faster, it will start to impact every aspect of our lives, and we think that will impact the way that people earn.
Earning will become easier. There will be more people earning in more ways than just through the exchange of labor. You see those things happening now — when people come home, they’re taking surveys, they’re playing a game or doing user testing on an app. That will continue to happen, and it will be beneficial for older people who are looking to make a little bit of supplemental income, because those opportunities will be more available to them.
Another observation was really around language. Language will evolve. It’s connected to technology. Words. Slang. We don’t even know what that language is yet. “LOL” didn’t exist until 10 years ago. And the word "pension" — it's a word people in our generation [millennials] are aware of and we’ve heard of it, but we don’t really use it and it doesn’t really exist in our world at large.
We actually see the word "retirement" suffering the same fate. Right now, it’s a very specific term. We don’t think it will resonate as much, because we’ll always be on, we'll always be working. So in a sense, if we’re going to maintain its truest definition, then retirement will be a luxury term. It will be something for only those who can truly afford to not earn anymore, whereas other people are always earning and still doing things. By and large, in the traditional sense or definition of the word, we don’t think it will exist anymore.
Life-Long Learning Will Be Key
Farnoosh Torabi, personal finance expert
We’re going to need more money, and the standard advice of putting 10% in the 401(k) is probably not going to get you there. I see retirement as being more like multi-stages, millennials at that age — that stage — will probably keep working to some extent, more on their own terms, dedicated to being connected and traveling. Frankly, they’re going to be working a lot longer through retirement. I don’t think there’s going to be a hard and fast start to retirement. I think it’s going to be a little bit more fluid.
Employers do see the benefit of retaining older employees. My father is 67 and he just started a job a couple of years ago at Amazon. Until then he was experiencing some ageism from employers. For employers, it wasn't worth the investment if employees are going to leave in five years, but that’s just what everyone does now. No one stays for 15 years. So whether you’re 65 or 25, your average length at a job is probably the same.
You have to keep working. And I think that’s going to also change college. I’m on the advisory board at my college at Penn State. We’ve recently had a big conversation around how life-long learning is really important to the school now. Because college was supposed to be these four years to prepare us for the next 40 or the next 50 years. Now it’s going to prepare us for the next 100? That doesn’t really seem efficient. Why would I go to a four year program to figure out the next century? I should probably have life-long learning.
So there may not be all of this investment up front, going to get a degree. Maybe it’ll be, I’m going to get a training or a certificate so that the next 10 years I can do this, but then I’m going to pivot and do that. That’s how I would go about it. Smaller investments in my advancement and education throughout my life. Because life changes, I change. There’s no sense in putting all my eggs in the college basket if I’m going to be living for a century. And of course, what I learned won’t be applicable anymore because I learned it 60 years ago and I’m still working.
Will There Be Enough Money?
Rachel Freeman, director of RISE investor services at Robasciotti & Philipson
Most of my clients, the question they're asking is "Will I have enough money?" It seems like a math question — you could just write it out and see some projections. But I think the question is a lot larger: if I invest in all these companies, are they still going to be around?
I think a lot of really radical folks in the investment space will say, let's return to a more regenerative economy, let's take bold action and just avoid the stock market altogether. And one of the things we focus on at RISE is really leveraging publicly traded companies to make the greatest impact, because I think that's where we can make the most impact for social good and social justice.
We're working to divest from "sin stocks" and invest in companies that are neutral to more on the philanthropic side, kind of finding that messy middle where we're working to encourage corporations to do the right thing by people and the planet — to address the current climate crisis and keep the carbon in the ground; really work in an intersectional way to address gender equity, LGBTQ values, racial justice, climate change.
For example, when Google went 100% renewable, it was the equivalent of taking one million cars off the road per year. So that's where I see the stock market 50 years from now. Really radical and bold action from enormous tech giants like Google, those publicly traded companies, is going to impact the future of where we're going.
And ultimately, to sound like a super millennial, if we don't do that, I think then there is no stock market, because there's a climate crisis and 2040 is a very much closer time frame than 2069.
[Editor's note: a report released last year by the Intergovernmental Panel on Climate Change predicted a climate crisis by 2040 unless immediate, large-scale actions are taken.]