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Buckle up college kids of today, you won’t get to retire until 75

If today’s college kids don’t have it rough enough with student debt, the new retirement age for them will be 75. Yikes.


Bad news, college friends

If you’re fresh out of college, you’ve got a long road ahead of you; maybe even longer and bumpier than you previously expected. According to the official nerds over at NerdWallet, the college graduates of 2015 won’t be retiring until 75, well past the standard age of 65 we all have been counting on for decades now.

Young adults fresh out of college and in their early 20s have a number of financial roadblocks up against them. First off, there are student loans to deal with. The average student loan is approximately $35,000 at graduation, and NerdWallet extrapolates that payments on this debt over 50 years comes out to $680,000.

That’s more than $680,000 that could have been put in savings or invested toward retirement.

Student loans and rents are cause for concern

Causing more concern for new graduates are increasingly high rents. NerdWallet claims that rent prices have increased 11% nationwide since 2012, meaning that young adults with entry level jobs, who are paying off student loans, can barely afford rental living, and certainly don’t have anything left over for savings.

Unfortunately, this also means they’re not going to become homeowners soon, which is how they can build equity and tangible wealth.

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Children of the crash are hesitant to invest

Another issue which is adding years onto the retirement age? The current generation is gun shy about investing after seeing the market crash while they were in high school.

But before you stash more cash under your mattress, read the following statistics from NerdWallet (and remember that you don’t want to work until you’re 75):

  • A 23-year-old who begins saving 10% today can shave five years off retirement age, amassing enough to leave work at 70. Saving 4% more per year amounts to $2,000 on a $50,000 salary; that’s about $165 a month.
  • If a 23-year-old can save 15%, it will pay off with a 10-year difference, bringing retirement age down to 65.
  • Someone who hits it out of the park and saves 20% or more could retire as early as age 62, today’s average retirement age.

While these numbers are based on a $50,000 salary, the concept still applies to any income level.

How to avoid working into your 70s

NerdWallet offers several suggestions to those coming straight out of college and struggling with the idea working for the next 50 years.

First, invest aggressively. Contribute enough to your 401(k) to then maximize your employer’s matching dollars, then direct contributions to a Roth or traditional IRA.

Second, live at home with family for as long as possible. Saving money on rent from 22 to 25 can cut five years off the end of your work career.

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Third, obtain a financial advisor who can help you set up a retirement plan. If you can’t afford one, or if it sounds fun to handle on your own, manage your own portfolio.

Put all three of these into action, and hopefully they will help you retire well before the ripe old age of 75; especially because your current life expectancy is 84.


Staff Writer, Abigail White is a wordsmith who hails from the Deep South, having graduated with a degree in Journalism from Auburn University. She is usually reading three books at once, loves history, sarcasm, and arguing over the Oxford comma.

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  1. Pingback: For the first time, U.S. kids won't outearn parents - but does it really matter? - The American Genius

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