Rutgers recently surveyed hundreds of young adults who graduated from college between 2006 and 2011. Only half are working full-time and six-in-ten think they’ll end up less financially successful than their elders. Workers who graduated in 2009, 2010 and 2011 earned a median starting salary of $27,000, or $3,000 less than graduates of previous years. Meanwhile, most recent college graduates said their first jobs don’t help them advance along a career path and that most of the positions didn’t even require a four-year degree. (Los Angeles Times, 5/10/12)
With members of the class of 2012 graduating this week across the U.S., it’s interesting to note the challenging economic times they and their immediate predecessors face. While many have noted that the unemployment rate for *all* college graduates is about half that of the general unemployment rate, it is those in the youngest cohort of college graduates who face disproportionate economic difficulties. Even when accounting for education, the effects of the recent Great Recession have been uneven on different age groups.
According to an estimate by Fidelity Investments, a married couple retiring this year should expect their healthcare expenses throughout retirement to total $240,000. Currently, 42 percent of Boomers have less than $25,000 saved for retirement. (Boston Globe, 5/9/12; Esquire, 4/12)
With respect to that group of recent college graduates mentioned above, those young adults shouldn’t expect a wave of career advancement openings to emerge from the mass-retirement of Baby Boomers any time soon. Too many Boomers remain financially unprepared for retirement, especially considering that housing prices haven’t climbed for a decade. Boomers are likely to stay in their jobs longer than expected and remain the driving force of the U.S. economy.
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