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Current Grads Will Retire 12 Years Late, Thanks Student Loans

Oct 24 '13 47 Last Comment
LITS4FormZ
Oct 24, 13 9:28 pm

Thanks to student debt, study predicts new median retirement age of 73 instead of the supposed average of 61. With life expectancy at 84, that's only 11 years of official retirement. 

http://www.nerdwallet.com/blog/investing/2013/73-retirement-norm-millennials/

The numbers make sense, very few people I graduated with (2009/2012) are saving for retirement, homes, kid's college funds, etc. I tend to "over save" but I know I'm in the extreme minority. Also, with fewer companies offering 401k matches (mine doesn't) saving for retirement is that much harder.

 

Non Sequitur
Oct 25, 13 8:15 am

Retirement?

Ha, that's a nice idea.

bowling_ball
Oct 25, 13 10:09 am

Retirement?  After being laid off and taking even just a few months to land on my feet, what small savings I had are gone and it's paycheck to paycheck for me.  $45k in school loans will do that to a guy.

Retirement? Ha.

Non Sequitur
Oct 25, 13 10:25 am

Bowling Ball, only 45K?  lucky.

Miles JaffeMiles Jaffe
Oct 25, 13 11:00 am

The only "retirement" I'll ever see is the one that is colloquially referred to by hit men.

curtkram
Oct 25, 13 11:09 am

pfft.  i would consider myself lucky if i was retired by hitmen.  i expect fukishima fallout to kill me before they even get the chance.

Donna SinkDonna Sink
Oct 25, 13 11:11 am

In all seriousness: I can't imagine being able to retire, and I *do* have a retirement savings plan.  I just don't see the numbers working out in my favor in the next 20-30-40 years.

Volunteer
Oct 25, 13 11:23 am

Unless you work for yourself or are employed by an exceptional firm you will be out the door and on the street by age 62. And what may be an "exceptional firm" today may not be when you approach your sixties. If the OP's firm is not even making a 401k match I doubt they would have any qualms about giving him the heave-ho.

DeTwan
Oct 25, 13 12:58 pm

Sad... so sad =(

bowling_ball
Oct 25, 13 4:56 pm

Discussion today with some co-workers who are putting away $xxxx/ month, every month.  Turns out they live at home, without school debt (and mid-20's to early 30's).

Most likely I will work until I'm dead.  Maybe the reality is that retirement is just an antiquated idea and we need to move on?  Or maybe it's just not always been attainable for everybody, anyway... blue collar workers, even with 30 years experience by now, will be very fortunate to have any retirement savings after the meltdown of 2008.

curtkram
Oct 25, 13 5:19 pm

and what if you can't work until you're dead?  what if you get sick or macular degeneration or something? you should probably try to live a bit below your means and put some money away.  if you think it's tough being a poor underemployed architect, just think of the other half of america, like the underemployed waitresses, live.  i would bet it's even harder for them.

there are a lot of people who are healthy enough and able to work at 70 years old, but there are a lot who aren't.  usually, retirement isn't the sort of "choice" that can be antiquated.

quizzical
Oct 25, 13 6:15 pm

Retirement is a "concept" that one must embrace at a very early age or it will pass you by. Preparing for retirement takes a fair amount of time, a LOT of discipline, and a little luck to get to a place where one can afford to retire - it doesn't happen on autopilot.

I retired a couple of years back at age 63. But, I started planning for retirement while in my early 30s. I made it my business to learn about the stock market and other forms of investment. My wife and I lived modestly and worked hard at putting aside as much money as possible for retirement. Our nest egg grew steadily and we didn't panic every time the markets panicked - we stayed the course. The compounding effect of investing over 30+ years is awesome.

While far from "rich", we now can afford not to work. More importantly, we can afford to spend time doing those things that we put off for so long due to my career.

This is not rocket science - the information needed is readily available. What's required is an early start, unyielding discipline and strong motivation. I believe anybody can do it if they set their mind to it.

You can do it !

quizzical
Oct 25, 13 6:23 pm


Oh, and curtkram is right - lots of architects plan to work until they die. What they fail to consider is the debilitating effect of age and disease that may prevent continued work. It's fine to work as long as you can, but you must prepare your finances so unanticipated disease or the debilitating effects of aging don't leave you without adequate resources to live reasonably if you can't work. That's a really bad place to be. 


LITS4FormZ
Oct 25, 13 7:38 pm

"Retirement is a "concept" that one must embrace at a very early age or it will pass you by. Preparing for retirement takes a fair amount of time, a LOT of discipline, and a little luck to get to a place where one can afford to retire - it doesn't happen on autopilot.

....This is not rocket science - the information needed is readily available. What's required is an early start, unyielding discipline and strong motivation. I believe anybody can do it if they set their mind to it."

I would love to be able to work well into "retirement age" assuming I still enjoy what I'm doing and health allows for it. Quizzical, you are correct, it is not being rocket science by any means. Living within or below your means is something that we as a society seem to have forgotten about. I believe I'm making the right moves now to plan for the future. 

However, if I went to certain grad schools instead of taking scholarships then I'd be in a very difficult place financially. I never even considered "retirement savings" until after grad school. If more of us did then it would certainly impact a number of life decisions. At the same time you're not going to be able to convince all 18-year-olds that 100k in debt will effect you for life...well after the loans are even paid off.

there is no there
Oct 25, 13 10:08 pm

I started saving for retirement at 18 and hope to retire in my 50's. The effects of compounding interest is a miracle (when it works in your favor).

Jack Spelling
Oct 25, 13 11:37 pm

Who wants to retire? Being an architect is GREAT! 

DaveW .DaveW .
Nov 4, 13 11:45 am

The lifecycle cost & analysis of my journey thus far in Archiecture...

1.)  Tuition - $0

2.)  ARE Exams - $0

curtkram
Nov 4, 13 12:09 pm

why is that dave?

i went the route where i went to college, and since nobody else wanted to pay for it, the cost fell on my shoulders.  then i decided to go about getting a license.  my firm might have covered the cost of the exams, that was a long time ago, but i seem to recall paying quite a bit for study material and NCARB registrations throughout the IDP process.  i'll be paying off loans for another couple decades, but i was fortunate to graduate shorty before education costs really started getting out of hand, and the interest on my loans should actually be below inflation if we can get some decent growth in the economy.

DaveW .DaveW .
Feb 22, 14 3:39 pm

Very simple.  I joined the military and then received a scholarship in the form of a GI Bill (Chapter 30) + A State Veteran's Grant. 

I don't really have any sympathy for all of you who complain about your loans.  Technically speaking, you were given those loans, and probably some grants and scholarship with that because some general body of people believed in you and your intellectual talents.  The unfortunate thing about my scholarship is that technically, from day one, I was told that I was worthless and would never amount to anything (The Military) 

 

:) See the difference.  

Incidentally, Architecture is an entirely un-pragmatic degree to go into.  I was fortunate to come out of it debt free, but I'm also older because of my time in the military.  Something for something.   If I had to do it all over again, which I plan to:  I would have gone into engineering.  If I had a large and wealthy and supportive family, then I think architecture could maybe be a more reasonable profession to go into.  At this time in this period of history, from what I am seeing, the architect is rapidly being phased out.

won and done williams
Feb 22, 14 6:48 pm

Stop making student loans an excuse for not saving for retirement. If your SL interest rate is less than 4-5%, pay the minimum and put the remainder into a mutual fund rich retirement account. You're sure to see better than 4-5% rate of return in the long term and see the huge benefits of compounding.

Non Sequitur
Feb 24, 14 8:07 am

Retirement?

ha!

jarvvy
Feb 24, 14 2:52 pm

The older generations don't seem to understand the crazy increase in tuition in the past 10 years. You can't work part time and pay your way through school. For some the choice is to go into crushing debt from school loans or don't go back to school. Unfortunately that is just the cost of education now.

rob_c
Feb 25, 14 3:01 am

DaveW. I'm glad the tax payer financed your education and that you are debt free. you may need all of your earned income to cover future medical problems arising from your military service or some other unforeseen personal disaster. If not congrats, you won the rat race. Sounds great but killing people and supporting the war machine is not an option for me at least.

Also at quizzical. The next 30 years are going to be so much different from the last 30.

How people achieve their educational goals as well as their personal life goals such as having a family are financially different from when you started out in the late 1960's or early 70's.

There was no transnational economy with china, Brazil, the former Soviet Union nations, or India, no NAFTA or European Union. There was not a vast IT infrastructure to support complex financial transactions at instantaneous speeds. Fossil fuels and access to natural resources were more abundant and cheaper. All of these major changes have influenced the simple things we do in our daily lives. Which in the end effects our ability to accumulate the amount of personal wealth to live financially independent lives after an arbitrary age of 65.

bowling_ball
Feb 25, 14 3:41 am

It's a complex issue that jarvvy and rob_c have done a decent job of introducing. Previous generations really can't seem to grasp how difficult/ different our economic situation is these days, as folks just starting our careers, let's say 25 to 35.  The economy doesn't so directly impact your life when you've had a couple of decades to accumulate wealth during better economic times than the present.

The easiest way to sum it up is to learn a little about wage stagnation (google is your friend).  

will gallowaywill galloway
Feb 25, 14 5:47 am

it isn't anything as easy for us in our early 40's either.

I just finished paying my student loan, and it wasn't all that large. More than the amounts, the opportunities are not the same. My dad had 2 kids and 2 houses working as a carpenter in his early 20's. He got generous student loans and subsidies from the govt in the 1960's to make it happen, and went on to a pretty decent middle class career, in the end (he started out as a dirt farmer). That sort of thing was mostly vestigial when I went to Uni, and is completely gone now, far as I can tell. Education costs more and the ladder we all want to climb seems to be harder to get on just now than it has been for some time.

@daveW, I very nearly went the same route as you. Was a tough decision but in the end I decided I would do better on my own without the military. Much as I respect the armed forces (my brother in law is a vet of 2 conflicts overseas), I am certain I made the right choice. Architecture and the Army are coming from such different places. Or did you find it compatible?

quizzical
Feb 25, 14 1:28 pm

@rob_c: "The next 30 years are going to be so much different from the last 30."

You will get no argument from me on that score ... that's clearly a true statement. Nevertheless, a person's "future" still remains heavily dependent on the choices one makes today.

IMO, pursuing a traditional career in architecture will continue to be an uphill slog as far into the future as I can see. That's not to say some won't be successful, but widespread economic prosperity among our kind is unlikely to be the norm. So -- there are choices to be made.

Among many others, those choices include: a) going into a completely different line of work; b) pursuing non-traditional practice (such as developing your own projects); c) doing the best one can in traditional practice and living very modestly while paying off student loans and saving for retirement.

All three of those choices have viability. All three involve trade offs and compromise. And, there are other ways to go.

But, in the end, we all must live in the world as it is - not as we might wish it to be. So, the choices one makes should reflect, at least in part, that fact.

I am tremendously empathetic with the challenges young professionals face today. However, it also is disturbing that so many see themselves so profoundly as victims, not as intelligent, entrepreneurial spirits, determined to confront the future with clear eyed determination to overcome obstacles.

A wise man once told me that "the only thing in life over which we have total control is our own attitude". Determination, combined with a positive attitude, is a powerful force.

bowling_ball
Feb 25, 14 5:51 pm

You make  a good point, quizzical, about entrepreneurship. The caveat is that because of the instability we see in the market(s) today, going out on our own (in whatever business) is seen as extremely risky.  Meanwhile, we are looking for stability, which is hard to find when salaries are at a race to the bottom.  

Let me ask those who are, say, 40+ - was "unpaid internship" even a thing 15 or 20 years ago? I honestly don't know, but somehow I doubt that it was, regardless of the economic times. In some ways we've done it to ourselves, but what choice have we had? The lenders don't take apologies as payment, so we are mostly forced to accept whatever scraps we can get.

This isn't a pity party, just an assessment as I see it. Taking the risk of entrepreneurship is for the wealthy - or at least those who have the support to know that when/if they fall, they won't lose everything. Some of us aren't so fortunate.

Lee RobertLee Robert
Feb 25, 14 6:13 pm

Good thing our generation will live until we're 140 years old.

That's still like 70 years or retirement!

will gallowaywill galloway
Feb 25, 14 6:20 pm

Unpaid internship was totally the norm when i was younger. Nobody complained about it like they do now, though.

That whole entrepreneur question is an interesting one.  Don't think its for the wealthy alone.  So many of my uncles started companies and did well and they were barely high school trained, never mind university.  It is easier to do with good contacts, and quick scaling is probably the real benefit of having wealth to start with.  I think the challenge is to find a market that isn't biased and working your way in. Access to education and funding is also a lot tougher just now.

but risk was always free. Maybe it takes a bit more energy than it used to, to take that leap...?Or perhaps there is no where to leap?

Saint in the City
Feb 25, 14 9:19 pm

"IMO, pursuing a traditional career in architecture will continue to be an uphill slog as far into the future as I can see. That's not to say some won't be successful, but widespread economic prosperity among our kind is unlikely to be the norm. So -- there are choices to be made."

I could not agree more, and there is much denial on this forum and elsewhere.

The field has changed.  Of course, great building require great architects.  However, within a huge segment of the built environment, most stake holders view architects as nuisances -- buildings legally require stamps, so architects are a "necessary evil" at best.  Not exactly mission statement material.  

Time for some new ideas / venues.

bowling_ball
Feb 25, 14 9:49 pm

Thanks for the perspective, Will. Something to think about. My fiancee is starting her own business and I'm kinda jealous, truth be told :)

On the fence
Feb 27, 14 11:19 am

Retirement is a very new phenomina. And one that does not exist in a lot of the world.

11 years of it doesn't sound all that bad, when put into perspective.

On the fence
Feb 27, 14 11:25 am

Davew wrote

"I  don't really have any sympathy for all of you who complain about your loans.  Technically speaking, you were given those loans, and probably some grants and scholarship with that because some general body of people believed in you and your intellectual talents.  The unfortunate thing about my scholarship is that technically, from day one, I was told that I was worthless and would never amount to anything (The Military) "

Exactly what does that mean?

I was in the military as well and I was never told I would be worthless.  If anything, the opposite is true.

I also had the GI bill and lived in a state where if I went to a state school it was basically paid for.  I could have gone to a much better school, but then I would also still be paying off student loans.  Probably not, as I am fiscally responsible, but.....

On the fence
Feb 27, 14 11:28 am

jarvvy wrote

"The older generations don't seem to understand the crazy increase in tuition in the past 10 years. You can't work part time and pay your way through school. For some the choice is to go into crushing debt from school loans or don't go back to school. Unfortunately that is just the cost of education now."

You don't have to go to premier schools nor get a graduate degree to work in architecture. State schools don't cost as much.  On this site I see so many posts about getting into one of those top ten architecture schools.  We all know what the outcome will be for them.

Just saying.

won and done williams
Feb 27, 14 11:57 am

On this site I see so many posts about getting into one of those top ten architecture schools.  We all know what the outcome will be for them.

It is funny how when you are 22 where you go to school seems like the most important question in life and 10 years later no one really cares.

curtkram
Feb 27, 14 12:01 pm

^-- kind of like some of the 'what laptop should i get' threads

On the fence
Feb 27, 14 12:08 pm

"It is funny how when you are 22 where you go to school seems like the most important question in life and 10 years later no one really cares"

There is absolutely a disconnect there someplace.  People (parents, friends, counselors etc) are not making kids aware of all the alternatives as well as the real outcomes of their career choices.  There is nothing wrong with the top tier schools, if you can get in and if you can afford it either through parents, grants and even a little bit of loans, but I cringe when I see someone talking about how they will be needing $150,000 or more in student loans these days.  Insane.

Xenakis
Feb 27, 14 12:20 pm

Volunteer

Unless you work for yourself or are employed by an exceptional firm you will be out the door and on the street by age 62.

Really? This is interesting.

jarvvy
Feb 27, 14 12:25 pm

On the fence, you're right you don't have to go to a top ten school or get a graduate degree. I actually think an expensive program is just a poor investment.

In my case I didn't decide to study architecture until after undergraduate so I went to a graduate program. My school was on the cheaper side, on par with state school tuition. Tuition is one thing but if you're program is full time for 3 years, the living expenses add up quick. I don't think I could have handled working full time while in school. I did some part time stuff and worked during the summers though. I even moved home afterwards for several years to get a handle on finances.

I'm still faced with an uncomfortable amount of school debt.

Xenakis
Feb 27, 14 12:43 pm

by staying healthy and making that a priority in your twenties and forever by:

1. no smoking - that includes bud

2. not exceeding 1400 cal/day

3. lots of exercise - start your day running, biking walking 10,000 steps/day - 6 days/week

4. start and end your day in meditation

this is what I have been doing for the last 30 years and it does work and it's why I am still working. - e.g., the longer you work, the better - Phillip Johnson worked until he was 2 weeks shy of 100. 

the problem is that we are programmed to retire - our society expects it - I have rebelled against it. so far so good - 

DaveW .DaveW .
Apr 5, 14 1:32 pm

rob_c  "Sounds great but killing people and supporting the war machine is not an option for me at least. "

The ingenuousness here reminds me of something fantastically architectural and flamboyant.  It assumes that the architecture profession-at-large is not as guilty of being a machine or ruining people's lives.  At any rate, some truth exists in what you say.  The U.S. did derail itself over the past twenty-five years by attempting to export democracy to fringe countries.  But we are not discussing foreign affairs, I can assure you that judging by your comment, you don't fully understand this world.  Enough with prevaricating the topic at hand.  

JOINING THE MILITARY.  It's a personal matter why you choose not to join.  Personally, I wouldn't recommend enlisting to anyone, unless they are in a situation of poverty and need fast upward mobility.  The pre-requisites to this are poverty in the home, poverty in access to education, and poverty in access to a gainful economy - all of which I didn't have due to various factors associated with displacement and inter-generational shock passed down from the holocaust.  

The military can be a worthwhile profession as a commissioned officer.   I know individuals with an architecture background who are commissioned officers.  I know many  more with an engineer background who are licensed PEs.  It basically comes down to whether you are interested in that type of profession as an officer.

DaveW
Apr 5, 14 1:34 pm

quizzical  "However, it also is disturbing that so many see themselves so profoundly as victims, not as intelligent, entrepreneurial spirits, determined to confront the future with clear eyed determination to overcome obstacles."

excellent comment.

DaveW
Apr 5, 14 1:38 pm

rob_c I'm glad the tax payer financed your education and that you are debt free. 

Poor form in this comment.  I earned it in the form of hard labor.  Rhetorical question:  Would you prefer we not have a military?

 

rob_c you may need all of your earned income to cover future medical problems arising from your military service or some other unforeseen personal disaster. If not congrats, you won the rat race. 

Poor assumptions.  The largest being that you assume there is no Veteran's Administration.

DaveW
Apr 5, 14 1:40 pm

 Saint in the City However, within a huge segment of the built environment, most stake holders view architects as nuisances -- 

Very true.  

DaveW
Apr 5, 14 1:47 pm

DaveW "I  don't really have any sympathy for all of you who complain about your loans.  Technically speaking, you were given those loans, and probably some grants and scholarship with that because some general body of people believed in you and your intellectual talents.  The unfortunate thing about my scholarship is that technically, from day one, I was told that I was worthless and would never amount to anything (The Military) "

On the fence Exactly what does that mean?

Fence?  Surely you remember Basic Training - Day 1.  And what about the slowly decreasing gradient of mental abuse thereafter?  :)

You have to see my humor in what was intended to be a war-story joke.  Lighten up man.  Do you really think this guy believed in our intellectual talents???  See below.

http://media.npr.org/assets/img/2013/07/12/002_2-hoepker---drill-sergeant-eb11d60c292a6ca6eb7825182c605d5fac9a373f-s6-c30.jpg

DaveW
Apr 5, 14 2:00 pm

will galloway @daveW, ....Architecture and the Army are coming from such different places. Or did you find it compatible?

It can work.  It depends on how you go about it.  I wouldn't recommend an enlistment after completing architecture school.  I recommend an enlistment prior to architecture school in cases where you might be coming out of some bad environment.  

If you are post school, and you need to pay off some heavy loans, then I highly recommend a commission.  You can usually negotiate a payoff with an officer's recruiter.  If you are good on loans, and don't need the  military, then you can apply as a civilian.  Civilian work is kind of rare fruit for architects though.  This is a major reason why I am working on going engineering route now.

Quan Nyen Tran
Apr 5, 14 8:04 pm

Damn Trader!!!
 

If you are my engineer, I will throw you some Gehry or Hadid building forms for fun..!!!

p.s. I hate you student loans

grneggandsam
Apr 6, 14 2:02 pm

All the talk about student loans makes me have a little more respect for my home state.  As backward as Oklahoma is in some ways - a degree at OSU with in-state tuition will be around 8k a year.  rent will be around $250 a month, and food/beer is pretty cheap.  $40,000 a year in Washington DC is equivalent to $25,000 a year in Oklahoma City.  Starting out you will probably make $35k-$43k a year in Oklahoma, $42k-47k a year in Washington DC.  If you want to pay off student loans, move to somewhere with terrible weather, expansive land and lots of oil money.  It will go much quicker there.

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