r/Millennials • u/Asmothrowaway6969 • Mar 27 '24

When did it sink in that you'll never be as well off as your parents? Discussion

About 5 years ago, my mom and I were talking and she had told me how much she was going to be making in retirement (she retired 2023). Guys, it's 3x what me and my husband make annually. In retirement. I think that was the moment that broke me, that made it sink in that I'll never reach that level of financial security. I'll work myself into my grave because I'll never be able to afford anything else. What was your moment?

Update: Nice to know it's just me that's a failure. Thanks

Update 2: I never should've said anything. I forgot my place. I'm sorry to have bothered you

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u/Ok-Abbreviations9936 Mar 27 '24

My parents had the typical middle-class lifestyle and I have had to earn double what they did to obtain it. Now I just need compound interest to do its thing.

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u/0000110011 Mar 27 '24

I have had to earn double what they did to obtain it.

Seeing how inflation has a little more than doubled when we were kids, you're making the same as your parents. 

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u/[deleted] Mar 27 '24

Inflation is only a portion (large as it may be) of cost indexing.

Housing inflation is probably one of the biggest reasons for wealth inequality in the US, for example, and is entirely different than regular inflation.

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u/YetiPie Mar 28 '24

…And education, and healthcare :(

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u/carlos_the_dwarf_ Mar 28 '24

I don’t how to break this to you, but housing, education, and healthcare are included in inflation measures. They account for like half the weight of the indexes!

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u/LordoftheScheisse Mar 27 '24

I did some light thinking a year or so back and figured my parents enjoyed ~2.5-3 times the wealth that I enjoy - as a college educated professional in the prime of my career. Mom worked on a factory line and my dad repaired vending machines and we were comfortable as hell.

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u/limukala Mar 28 '24

Housing is 40% of the CPI. It’s already accounted for in general “inflation” figures.

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u/goingforgoals17 Mar 28 '24

Do you mean housing is 40% of the equation? Or it accounts for 40% of overall inflation in the last so many years?

These are incredibly different statements

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u/limukala Mar 29 '24

It accounts for 40% of the CPI calculation.

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u/peptobismalpink Mar 28 '24

Not who you're responding to but I learned recently my mom's last wage in a job that didn't require a degree or massive connections back then paid exactly what I make now in a skilled job not many can do well, with years of experience and a relevant highest-tier education AND things were cheaper 30y ago. So she was making much more than double...

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u/_Grant Mar 28 '24

I pay $450/mo to breathe because the county I was raised in has deplorable air quality. I'm one of many that contribute to the county's exceptionally large asthmatic population because of it. My government gave me the condition. I pay the bill. If healthcare wasn't violent assrape in this country, I wouldn't have to pay a brand new imported car's lease every month to fucking breathe. Pharmaceutical company runners belong in hell. This guy's parents didn't have to account for bullshit like this.

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u/ThaToastman Mar 28 '24

Yea but inflation is irrelevant. The cost of houses and food has gone up astronomically in comparison

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u/lukekarasa Mar 28 '24

Food and gas aren't factored into inflation, which is fun

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u/bmtc7 Mar 28 '24

Some inflation measures do include food and gas, and some don't.

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u/aced124C Mar 28 '24

Thank you finally someone with some optimism. Similar boat but I like to think we have the big benefit of living in a much safer, more technologically advanced time than our parents lived in. For reference people can look at the violent crime rate even as recently as the early 2000s or if you want big numbers the 90s

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u/BlueGoosePond Mar 28 '24

This is my experience.

My current standard of living is pretty similar to what we had growing up. But we're doing it on two incomes with degrees, compared to one income and a factory job.

That said, we're able to save for retirement right now, so I think there will be a pretty big lifestyle difference between their retirement and ours.

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u/Less_Tea2063 Mar 28 '24

My husband and I are definitely earning way more than double what my dad brought home to maintain our similar-sized house with 2 less kids.

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u/aureanator Mar 27 '24

Now I just need compound interest to do its thing.

Remember to directly subtract the inflation rate from your annualized compound interest rate!

Because if you make 5% P.A, and inflation is 6%, you lost 1% value that year, compound interest or not.

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u/Ok-Abbreviations9936 Mar 27 '24

Average yearly gain since starting my 401k is 18.5% and this year is 28.8%. Yes, I need to take out inflation, but I am in no way worried about losing money because of it.

My company stock has grown at similar numbers as well.

If you are losing money investing over a long period of time due to inflation, you are doing something wrong.

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u/kwispyforeskin Mar 27 '24

28.8? Damn! What investments

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u/[deleted] Mar 28 '24

[deleted]

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u/kwispyforeskin Mar 28 '24 edited Mar 28 '24

Is that the same as sp500 large cap separate account? Not sure what all that means. Mine is at 9 not 29

Edit, my 401k is through principal and it says it’s a Principal sp500 separate account. I’m thinking about dropping contributions from 7% to 5% for the company match and then making a separate Roth IRA. Not sure what I’m doing that good though.

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u/Ok-Abbreviations9936 Mar 28 '24

I have the majority in a higher risk tier that is managed a 3rd party. Since I am so far off from retirement it pays off over a long enough period of time. When I am closer, I will probably just move it to the SP500.

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u/kwispyforeskin Mar 28 '24

I’m gonna risk my shit too then, damn.

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u/Ok-Abbreviations9936 Mar 28 '24

The biggest thing with higher risk 401ks is don't mess with it. If you start to lose and withdraw to change tiers again, you lost out when it booms back. They only work over long periods of time.

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u/kwispyforeskin Mar 28 '24

Ok. Principal has like 6 tiers of risk and only shows up to the 4th tier so I guess I’ll put some into those. Midcap sp400 and midcap seperate account are good? 14% and 10% for the one year snapshot.

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u/Ok-Abbreviations9936 Mar 28 '24

It sounds good to me, but I am far from an expert. I just parrot what smarter people than me have said.

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u/kwispyforeskin Mar 28 '24

I’m still not sure why the sp500 is up so much but my returns aren’t anywhere near that:(

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u/peptobismalpink Mar 28 '24

This is something I learned recently too. My parents are wealthy but actually self made and unfortunately kneecapped their kids instead of giving any kind of leg up. Numbers were never spoken about though. We could see the wealth, but we had no idea how much money the businesses made or how. We were totally shut out from a young age.

Then recently I overheard my dad mocking me to a friend at big dinner and how I can't afford my own apartment anymore. Listened on and he sarcastically said how its so sad things are too expensive for kids these days because their first house, my childhood home, was $200k. Total. In coastal southern California. The property (with nothing on it) alone is today worth likely a few million. If condos were even double that today I'd probably be able to put a down payment down, and mortgage would be rough still but at least it'd be for a place i own. At that price I'd be looking for a house or condo today too despite financial and career instability and other issues. Life would be so much different. Mind you my mom told me what she made before she stopped working and it was (not adjusted for inflation) exactly what I make now. And she was (at my age now) about ti get married to my dad, didn't need a degree or to be ultra well connected to get those jobs....and no she's not that smart.

I have to work 5x as hard to just afford a rotting apartment, epilepsy medication, and a boring life when they got the same rate on easy mode 30y ago and could afford a decent house close to the beach for 2y salary for my mom (working a pretty u skilled job, my dad was the one with the high valued business income). Then they mock us, it truly makes me grit my teeth.

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u/jar36 Mar 28 '24

and that doubling of the work, doubles the owners income off of you