As a personal finance reporter at CNBC, when the stock market drops, as it has from the coronavirus outbreak, I write stories reminding our readers to remain focused on their long-term goals and to resist panic.
Beneath that advice, however, I usually have a nagging feeling – a wish that I was more worried by the latest drop in the Dow. The reality for me, and for many of my friends in their late 20s and early 30s, is that we don't have enough savings on the line to care all that much. I think of Bob Dylan's lyric from his song, "Like a Rolling Stone": When you ain't got nothing, you got nothing to lose.
Indeed, many of us have nothing invested. Fewer than a third of millennials, often considered those born between 1981 and 1996, are saving in a 401(k) retirement plan, according to Charles Schwab's 2019 Modern Wealth Survey. Not even 1 in 5 of us has an investment account. Overall, nearly half of Americans don't own a single stock.
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One of my friends, an adjunct English professor, said the recent stock market woes "means nothing to me." At 26 years old, she has no investments and just $2,000 saved. "I don't even know why or how a stock market crash would affect me waking up, going to work and living my life," she said. "It seems abstract."
How could it not when you don't have any money at stake?
"I don't know a whole lot of people that actually care or pay attention to the stock market, in our generation at least," said Katie McBeth, a copywriter at the software company Intuit in Boise, Idaho. She didn't start saving in the market until last year, at 28.
She has around $11,000 earmarked for retirement now, "more than I've ever had."
I'm also fortunate to be in the minority of people my age who is saving in a 401(k) plan at all. Still, I'm not putting away nearly as much as the experts recommend. They say I should save at least 15% of my income to secure a comfortable retirement; I'm saving just 7%.
I'm limited by the hundreds of dollars I need to direct each month to my student loan debt.
My circumstances are common. The typical college graduate without student debt will have nearly double the amount saved for retirement by the age of 30 (around $18,000) as those with the debt ($9,000), according to recent estimates by the Center for Retirement Research at Boston College. The average monthly student loan bill, after all, is nearing $400.
Wage stagnation is yet another factor working against us. Millennials earn 20% less than baby boomers did at a similar age, according to a recent report, "The Emerging Millennial Wealth Gap," from nonprofit, nonpartisan think tank New America. Just 60% of millennials in their 20s are considered middle-class today, compared with 70% of baby boomers at that age, the Organization for Economic Cooperation and Development found.
All of this means fewer young people are able to put their money into the stock market.
Around 20% of people under 40 are investing less than $100 a month, according to a recent survey by robo-advisor Betterment. And nearly 10% of them say they're not investing anything. A spokesman for Fidelity, meanwhile, told me the median 401(k) account balance for its millennial clients is just $11,600. Most experts say you'll need $1 million – or more – in retirement.
"This generation is one that is often more focused on immediate needs," Kelly Lannan, vice president of young investors at Fidelity, told me. "It's a lot harder to imagine buying in to something that they won't touch for decades."
I had around $12,000 saved in my 401(k) plan, and built up thousands in a brokerage account with Betterment, but then emptied out the latter to cover a credit card balance that was racking up interest. One in 3 millennials owes $5,000 or more in credit card debt, Betterment found.
Even if I'm making progress in my savings for retirement, I wonder when or if I'll ever be able to meet other goals, like buying a house, starting a family or just feeling more financially safe.
Young people do have one advantage: We're young. Even if most of us aren't able to save as much as we'd like to or need to, what we do put away now has the advantage of decades of compounding growth ahead of it.
For example, saving just $200 a month, starting at the age of 25, will leave you with more than $430,000 at 65, assuming a 6.5% annual return, retirement savings expert Ed Slott has calculated for me. If you waited until 37 to start this routine, at 65 you'd have just $180,000. And among millennials who have been saving in a 401(k) plan with the same employer for a decade straight, the average balance is closer to $150,000, the Fidelity spokesman told me.
"Time is the greatest money-making asset an individual can possess," Slott said.
In other words: Not being able to invest as much as you'd like to can't prevent you from investing what you can. Now.
If you're a millennial with a healthy investment account balance, the standard advice applies: Despite the recent large drops in the market, stocks have historically bounced back and prove fairly fruitful over the long-haul. A $50,000 investment in U.S. stocks in 1950 grew to more than $87 million by this year, according to data provided by Morningstar. And even stock-heavy portfolios took under four years to fully recover from the devastating 2007-2008 financial crisis.
"The biggest mistake one can make in this financial environment is attempting to react to or predict the market," said Lannan at Fidelity. Her advice: "Invest consistently and stick to a plan, even during the bad times."
That's what I plan to do, and hopefully one day the bad times will feel more, well, bad.